Pulling this one lever can turn around your business: Increasing forecast cadence

In today's fast-paced business environment, staying ahead often boils down to one strategic tweak. One powerful lever to pull is increasing your forecast cadence. Even basic revenue forecasting and sales forecasting models, when applied more frequently, can outperform the best models used less often.

Here’s why:

The Power of Frequency

Imagine your business forecast were as accurate as scoring on basketball free throw. Would you rather have an NBA player take one free throw or a high school player take four plus?

The Scenario

• NBA Player: Has an accuracy of 75%, so will fail to score 25% of the time.
• High School Player: Is 50% accurate initially, but with four attempts, their accuracy quickly increases.

After four attempts, the high school player’s probability of success increases to approximately 94%, and with more attempts, it converges towards 100%. This is the power of increasing frequency.

How It Works

• Initial Attempts: Your early forecasts might not be perfect.
• Increased Frequency: With each subsequent forecast, your accuracy improves, just like the player’s success rate after multiple attempts.
• Rapid Feedback: More frequent forecasts provide quicker feedback, allowing for timely adjustments and better decision-making.

FREE FORECASTING TEMPLATE: Large Deals Forecast Model

Model best-case and worst-case scenarios based on winning or losing your biggest deals. Use this to stress test your sales and revenue forecasts. Make strategic decisions and take control of their destiny, rather than just relying on vague pipeline numbers.

Real-World Application

Businesses that increase their forecast cadence can swiftly adapt to changing conditions, correct course, and ultimately, achieve greater accuracy in their revenue forecasting and sales forecasting. This improved accuracy translates to better resource allocation, more precise planning, and a significant competitive edge in board reporting.

Conclusion

If you want to turn your business around, consider pulling the lever of increased forecast cadence. It’s a simple yet powerful strategy that can lead to remarkable improvements in your forecasting accuracy and overall business performance. Use this insight to your advantage and watch your business thrive.

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