Machine learning enables you to predict customer responses to external and internal factors that influence sales.
Neural Designer is a data science and machine learning platform that lets you quickly build sales forecasting models.
Contents
Objectives
Sales forecasting aims to estimate the future demand for products or services in a company.
Companies can base their forecasts on internal and external data.
Some standard variables used in sales forecasting are the following:
- Internal data:
- Past sales data.
- Marketing actions.
- Website visits.
- Etc.
- External data:
- Seasonal trends.
- Market-moving events.
- Economic trends.
- Etc.
Depending on the forecast window, we can discuss short-term forecasting (hours to days) or long-term forecasting (weeks to months). Of course, the factors affecting short-term sales differ from those influencing long-term sales.
Benefits
Sales forecasting can be beneficial to companies in numerous ways.
PLAN BUDGETING
The primary purpose of revenue forecasting is to plan your future expenses more effectively.
ALLOCATE RESOURCES
Knowing the number of future clients or sales allows for better employee management.
Approach
Neural networks are the most essential techniques for machine learning and artificial intelligence. The following flowchart illustrates how to build and utilize a neural network for sales forecasting.
The first step is to create a dataset by collecting all internal and external information related to the company’s sales.
Then, we need to build a neural network to forecast future sales.
A training strategy is applied to the neural network to discover the underlying relationships in the sales data.
To improve the model’s predictive capabilities, we can also apply model selection by trying combinations of variables and choosing those that have a greater impact on sales.
Then, the resulting model undergoes an exhaustive testing analysis.
Finally, the neural network is used to predict the company’s future sales after the model has been deployed.
The data science and machine learning platform Neural Designer guides you through this process, allowing you to focus on your business rather than the details behind machine learning.
Conclusions
Predictive modeling helps you estimate the number of products the store will sell, enabling you to prepare the inventory and manage cash flow effectively.
It identifies the factors that most significantly influence sales and provides vital information for making informed decisions that drive your company’s growth.
