In accounting, budget forecasting is a valuable tool that can help you better manage your cash flow through accurate predictions. But what if we told you that you can apply a similar approach to your marketing strategy, too?
This is what marketing forecasting is all about. Whether you’re launching a mobile app or the latest collaboration tool for remote teams, with marketing forecasting by your side, you’ll likely smash it.
Want to hear more on this topic? Our comprehensive guide right here has all the tips you need to make forecasting future sales an essential part of your business.
Before we move forward, it’s important to clarify what marketing forecasting entails exactly. As the expression suggests, marketing forecasting is a quantitative method of conducting data, market, and customer analysis to help you spot future trends and tap into them in a planned, structured, and meaningful way.
While it's a data-driven process, teams might complement it with a qualitative method like consumer surveys or focus groups.
Through accurate forecasting, you can make predictions on anything from customer behavior, to lead numbers, to conversion rates. Once you have all the relevant insights, you can neatly place them in your marketing forecast document and present them as a single report that’s easy to share and digest across all the relevant stakeholders.
Remember that it’s also vital to establish a clear and consistent project review process for your market forecasting process. Assign specific tasks to the right people, whether it be trend analysis, market research, or customer engagement, and appoint one person to approve and sign off the document.
So what does marketing forecasting practically consist of? Let’s break it down into three main pillars: your data, your audience, and your market.
Data analytics is the heart and soul of marketing forecasting. After all, a marketing forecast is, in itself, a collection of data.
That’s, however, easier said than done, because not all data was created equal. What you’ll need, if you want to build accurate forecasts, is fresh, current, and structured data.
Think about, for example, information coming from reputable sources such as Google Analytics, but remember to also look into market, industry, and country trends.
And if conducting all this analysis feels like a daunting prospect, fear not. You can always bring in freelance analysts to help you out. With a remote desktop manager tool, they can work in your system as if they’re sitting in the office with you and the team.
Your audience’s interests are another crucial part of your marketing forecasting strategy. Before selling your product or service to real-life customers, you’ll need to craft a customer persona – your ideal buyer.
This, in turn, will guide you toward another essential step: customer segmentation. Once you have identified, say, three different customer personas, you’ll be able to pull out three separate customer categories (“segments”) towards which you’ll focus your targeted marketing efforts.
Lastly, you’ll need to consider your target market. More specifically, what you’re interested in is the so-called total addressable market (TAM). This expression refers to the total number of customers that you expect could be interested in buying your product or service.
Getting your TAM is easy. Simply take your total number of (potential) customers and multiply it by your product’s price. By undertaking this exercise, you’ll be able to work out whether there are, in fact, enough real-life customers who are willing to spend their hard-earned money on your new offering.
Because TAM can vary quite a lot depending on the location that you’re looking to address, it can help to set up specific regional domains. Each of these will enable you to better gauge local preferences, make considerations about pricing and market shares, and, eventually, personalize your marketing to different segments of your TAM.
Now that you know what marketing forecasting involves and how you should structure your strategy, it’s time to unveil some of the most exciting benefits that this approach can enable you to achieve.
The most obvious benefit that comes with a solid marketing forecasting strategy is the ability to foresee any relevant industry trends that you may want to jump on before they become mainstream.
By cross-analyzing customer and market data, you’ll be able to see how your target audience currently responds to market trends and fine-tune your predictions for how they will behave with you in the near future.
For instance, if you’re already planning a new product launch just in time for the Christmas festivities, you may want to work out how best to market it to your audience. Look at how customers are interacting with Christmas-related content, brands, and products online, and you’ll be able to spot what’s working and what’s not.
Then, once you have singled out a few big trends, try to incorporate them into your own strategy. This will enable you to craft more effective marketing campaigns that truly hit the spot.
As we briefly touched on earlier, one of the greatest advantages of accurate marketing forecasting is the ability to fine-tune your stock and inventory levels. Think about it: you don’t want to end up with extra stock that’s been costing you a fortune to produce in the first place, and that will cost you some more to dispose of.
Similarly – and even more frustrating – no business owner wishes to find themselves in the position of not having enough stock of their best-selling product.
Why would you want to create marketing campaigns around products that nobody wants or needs right now? Or, even worse, what would be the consequences of running a huge campaign on one of your bestsellers when it’s completely sold out and you have no idea when it will be available again?
That’s where marketing forecasting can come to the rescue. By predicting stock level fluctuations for specific items, an accurate marketing forecast can support your inventory processes and help you direct your marketing efforts towards products that you have in stock and that your customer really wants.
If you’re an ecommerce brand selling home accessories and products, for example, you’ll notice that garden and outdoor items sell a lot more and a lot faster in the summer months, as opposed to items such as indoor plants, fairy lights, and festive decorations that see a regular spike in winter.
These findings will enable you to craft effective marketing campaigns that highlight the features and benefits of the right products, at the right time.
Planning an effective marketing campaign is all about being proactive. All too often, in fact, reactive planning fails to deliver the outcome you expected, because you’re basically putting something in place that, by the time it hits the consumer, is already obsolete.
With proactive planning, on the other hand, you can anticipate both market and customer needs, which allows you to craft ad-hoc campaigns and launches that have a much better likelihood of hitting the mark.
This is particularly crucial in today’s competitive industry where trends are constantly changing. Whether you’re launching a SaaS product like a small business cloud phone system, a food delivery app, or a 3D health supplement, you need to consider the longevity of your product or service.
To begin with, it’s useful to think about a few potential scenarios that your business might face in the future. Consider both positive ones, such as one of your pieces of content going viral, as well as negative ones, like your product selling out and you being unable to fulfill orders for weeks.
Next, consolidate your information into easy-to-access, digestible, and user-friendly documents, perhaps by using Zapier templates that seamlessly integrate with many other digital tools. Finally, share your proactive marketing plans with the relevant people within your team, and say goodbye to scrambling for a solution to problems at the last minute.
We’ve already seen that marketing forecasting relies on getting to know your customers better. But did you know that it can also help you to predict how customers will behave throughout your sales funnel, and what type of content will best resonate with them? Should you consolidate all your content on one site, or should you head to OnlyDomains and set up some more tailored, regional sites?
This, in turn, allows you to craft marketing messages that feel authentic, relevant, and personalized, and that your target customer is much more likely to react positively to, whether through well-placed display advertising or other tailored content strategies.
Additionally, marketing forecasting, enriched by user monitoring, allows you to predict how customers will behave throughout your sales funnel and tailor content strategies accordingly, ensuring authentic and relevant messaging that resonates with your target audience.
Another amazing benefit of marketing forecasting done right is a boost in customer retention. The reasons behind this are simple. If you have crafted attractive marketing campaigns, nailed the timings of your new launch, and have a great product on hand, your customers can only sing your praises.
At this point, you’ll be seen as a real leader in your industry – someone who knows its customers so well that they can predict any future needs. It doesn’t matter, then, if you’re launching a DTC consumer product or B2B auto dialing software: marketing forecasting can help you retain customers across the most disparate range of sectors.
Last but certainly not least — according to the accounts team anyways — forecasting can help you save money and allocate your spending effectively. It provides valuable insights into how your different marketing channels and campaigns are performing. Then, you can identify which channels bring the highest ROI (return on investment) and allocate your marketing budget more efficiently.
For example, looking at the LTV (Lifetime Value) of ad campaigns can help you allocate your funds better than standard metrics such as ROI. Calculating the ROI of an up-and-running campaign can be difficult, and miscalculations can result in heavy losses if campaigns are left to run too long or target the wrong customers.
A predictive approach helps your marketing team identify campaigns that may become unprofitable over time. Once the model signals that a particular campaign is likely to yield diminishing returns or become financially unsustainable, you can proactively redirect resources. This approach allows you to focus your resources on effective strategies, getting the most out of your marketing spending.
Try our free LTV prediction calculator to estimate return on ad spend.
If you want to take your business to the next level, you should consider implementing a marketing forecasting approach. As we’ve seen in this guide, marketing forecasting can bring many benefits – from better customer retention to more personalized content, from proactive planning to optimized inventory processes.
By following a forecasting-focused strategy, you’ll soon soar above your competitors, dominate your market, and attract more customers than ever.
