We’ve come to the end of the year and it’s time for reviews: to see if the sales targets in the various markets have been met and, at the same time, to make forecasts for the coming year.
The first step is to collect sales statistics – by market and by customer – for the last three years, calculating the changes, by percentage, from one year to the next. We’ll discuss the reasons for the change in these numbers with the people involved in the business: how does our agent or distributor explain the decline in sales? And the in-house salesman that manages that customer? What does he say? What could we have done that we didn’t do? Was the fair you participated in this year useful in that locale? Did we sufficiently follow-up with the customers we met at the last fair? Would it have been useful to take an additional trip to go see them? Etc.
Forecasting is a useful exercise that serves as a basis towards predicting sales for the coming year; done in detail and customer by customer.
Making a forecast is not easy and can be an especially uncomfortable exercise because it opens us up to possible criticism. But it’s essential because it helps us try to figure out where the company is going and to make decisions in time so as to try to reverse certain trends. If you don’t the risk is that we continue with the same old routine, hoping it will bring a better future.
It becomes crucial, then, to determine who does what. Making a prediction on a certain customer without determining which person in the organization will be responsible for making sure that things go as predicted is another mistake. To each his own responsibilities.
Finally, it’s necessary to determine which sales techniques should to be implemented to achieve certain targets for each customer: a trip to visit some customers with the distributor, a trade fair, promotions, changing the agent in a certain market, etc. These actions will then tell us in advance how much we will spend in support of our sales in 2018.
This path must be taken with all the people involved in the sales process; only this way will the forecast have value and include everyone in pulling the cart in the same direction.
Unfortunately, the reality of our small micro-companies is often different. No forecast is made. They only concentrate on the product, hoping that this is enough to get customers to flock to us at the next fair.