Sales Forecasting How to Have Faith
Sales forecasting is different and there is no denying that. For most of our clients' experience would suggest that a well-designed, collaborative
sales forecasting process will produce better results in the long run. At MXI here’s how we look at how Top-Down and Bottom-Up
sales forecasts drives better results for our clients
Sales Forecasting Bottom Up
Bottom-Up Inputs: Bottom-up
sales forecasts are accumulated from many contributors. A distributed sales force may have hundreds or thousands of contributors. Each contributor has a specific area of expertise such as a specific customer, product or geographic area. The contributor enters her forecasts for her specific area of responsibility.
Sales Forecasts from all contributors are summed to capture an overall bottom-up forecast.
Sales Forecasts Top Down
Top-Down Inputs: Top-down
sale forecasts apply a more centralized view. A small number of forecasters will look at various inputs and generate
sales forecasts. Influencing factors may include market data, economic indicators, and general product and customer trends.
Sales Forecasts Top Down and Bottom Up
Balancing Top-Down and Bottom-Up Forecasts: The beauty of top-down and bottom-up
sales forecasting is their ability to look at the world from differing vantage points. The folks in the “ivory tower” know important information, but they don’t know everything. The folks in the field have keen insights into their unique areas, but they only see their small piece.
So what one is best for you to build faith back into your
Sales Forecasting?
Sales Forecasting Recommendation
Regardless if you go top up or bottom down by following these recommendations you will be on the right track. First look for objective inputs from the very start. Secondly try to manage by exception rather than micro manage and lastly provide feedback back on accuracy and bias.
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