MANAGEMENT
Using Intelligent Forecasting to Assess Future Sales
HENRY CANADAY
If your sales forecast is cloudy – meaning you can’t see the forest for the trees – here are some tips to make this essential element of every sales year a bit more transparent and accurate, even rewarding.
But first, some things to keep in mind: 1. Even the best forecasts will be wrong to some degree.
2. A sales forecast may become a goal that top management expects to be fulfilled.
3. There’s always a temptation to underestimate to make the num- bers look better down the road.
4. There’s also a temptation on the part of new managers to over- promise.
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5. What top management generally wants – and what managers should shoot for – is accuracy, no matter how difficult it is to achieve.
6. Top sales executives must know what they can expect from a far-flung field force that usually knows much more about the market than headquarters can. Outside of the sales department, other company officials have a
necessary interest in sales prospects. While forecasting forces managers to confront, at the beginning of every year, the true nature of the coming sales challenge, this can be a very healthy exercise for a variety of reasons. It can flag problems or hurdles that must be overcome if satisfactory results are to be obtained. If difficulties lie ahead, it is better to know about them early, when solutions can still be found. Mike Hemmer – a sales manager for a mid-sized wood materials, moldings, decorations, and door jambs company that sells through distributors to the home market – remembers when his job got a lot harder due to forces beyond his control. Forecasting became a huge challenge in Hemmer’s market because a national homebuilder had entered and changed the market. “Much of our customer base was companies that supplied this
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