Sales Forecasts, Marketing Metrics & Marketing Budgets

Instructor: Beth Hendricks

Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career.

Various tools in the marketing world can be useful for projecting and tracking plans and goals. In this lesson, you'll learn more about sales forecasts, marketing metrics, and marketing budgets.

The Right Tools for the Job

Whatever job you hold or career path you've chosen, there are tools that are appropriate and useful in helping you get things done. For carpenters, this could be a hammer. For teachers, textbooks and a whiteboard.

Forecasting and examining marketing efforts can lead to a stronger overall plan.
Forecasting and examining marketing efforts can lead to a stronger overall plan.

A marketer's toolkit includes a marketing plan, metrics, budgets, and sales forecasts. While each can work on its own, the integration of the three can result in a more thoughtful and effective approach to your business's marketing strategies and objectives.

Let's examine each tool and what it brings to the marketing table.

Sales Forecasts

Sales forecasts project future sales revenue and are based on prior years' sales data, along with current market surveys and trends. Sales forecasts help form the foundation of a business plan because of revenue's impact on myriad areas of business.

Many people think sales forecasting does not belong in the marketing discipline, but that is not true! Sales forecasts can become, or influence, your marketing goals and plans for the year. Forecasting sales should be thoughtful and realistic, and requires some degree of educated guesswork. After all, no sales forecast will be a perfect creation.

Sales forecasts generally show sales by month for the coming year, as well as annually for the next few years. A simple sales forecast can be developed using the following steps:

  • Begin by projecting unit sales (total number of units sold) per month.
  • Look for historical data. Take the past two years of sales, noting trends, and make future projections based on this information.
  • Consider similar products. Here is where you'll have to make some educated guesses about the future performance of a product based on similar products you may already be selling.
  • Be aware of external factors such as holidays, major events in your industry, and what your competitors are doing that might impact your sales.
  • Determine internal factors that need to be considered, such as new products or target audiences, marketing tactics, and promotions.
  • Refine and retool your forecast based on internal and external influences.

Once you have taken these steps, you can build a realistic sales forecast for the next year.

Selecting Marketing Metrics

Marketing metrics are a group of tools and statistical measurements used to assess the effectiveness of your marketing campaign. There are literally dozens of marketing metrics that can be tracked and assessed.

The best marketing metrics are chosen based on the goals or objectives that have been set for a specific marketing campaign. Overall, metrics should be useful, regularly available, and actionable, meaning a statistic or figure that represents a customer behavior such as making a purchase or clicking on a link in an email. One common marketing metric is return on investment, which tells you how much money you've made compared to how much money you've spent on a particular marketing tactic. Other metrics include conversions and website traffic.

Begin by defining what marketing does, or should do, in your business. Is the goal to increase the number of consumers or develop more qualified leads? What about increasing brand awareness?

Once you have defined your goals and objectives for marketing, ask the appropriate questions for choosing metrics that are relevant to your plans. For example, if your goal is to increase online conversions or brand awareness, you might ask, 'What type of traffic are we experiencing on our website?'

Determine the cost and value of potential metrics. How is knowing that particular number going to benefit your bottom line? And how much will it cost you to improve upon metrics that are not up to par? For example, a metric that shows your website traffic is decreasing can be valuable to your business, but improving this metric could require costly solutions, such as redesigning website pages for a better user experience.

Finally, get buy-in from other members of the team on the metrics selected.

To unlock this lesson you must be a Study.com Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back
What teachers are saying about Study.com
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account
Support