Retaining loyal customers, generating turnover and responding to global competition are becoming increasingly challenging. And the current economic climate doesn’t help as financial pillars appear to shake and stumble, draining confidence amongst businesses of all kinds.
In times like these, it is crucial to remain focused. Forecasts are a useful foundation for setting goals and KPIs based on predicted future sales and production, and adjustments to both production and marketing can be made in reviewing forecast figures and actual results.
Forecasts are nevertheless tricky to create as it is difficult to obtain reliable data and it is often impossible to predict the future beyond the short to medium terms. Furthermore, the data gathered can be biased, out of date or flawed.
A recent article in the Wall Street Journal discusses the collaboration of company departments – chiefly the sales, production and marketing departments – in creating forecasts, and suggests seven rules companies can follow to make the most of collaboration in their forecasting efforts. These can be summarized as follows:
Finally, we would like to add a further tip to successful forecasting. The seven tips above are based on an inside-out approach, i.e. the view from within the company. It would be beneficial to test forecasts from an objective standpoint, involving market and competitive intelligence. For example, market research could be used to create comparable datasets (such as competitor forecasts or market forecasts as a whole), and this can be achieved through desk research, statistical extrapolation, and a select number of interviews with industry experts (such as large customers, trade associations, competitors and distributors).
B2B International USA’s Business Development & Research Manager Julia Cupman says:
Market research offers an independent means of not only verifying forecasts, but also of obtaining invaluable insights into everything that can directly and indirectly affect a forecast, such as challenges facing a market, market trends and influences, strengths and weaknesses of a company and its competitors, threats, unmet needs and opportunities. Hence companies who only base their forecasting and planning on internal knowledge may not be maximizing their full potential.
For more information on forecasting and how market research can add value, including different types of forecasts, the role of forecasts and forecasting methods, please take a look at our white paper: Forecasting and Scenario Planning.
This entry was posted on Thursday, October 2nd, 2008 at 1:25 pm and is filed under Desk Research, Forecasting, Julia Cupman, Market Assesment, Market Intelligence, Market Research, White Papers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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