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Just Other Articles - Is Your Forecast Too Sunny? How to Improve the Accuracy of Sales Forecasts
As spring moves to summer, the forecast should be for warmer and sunnier weather. What is the forecast for your business? Is the outlook sunny or cloudy?
Do you know what sales you can expect, whether for a team of sales people or within your own business or practice? How do you feel about putting together a forecast? How do the others in your business feel? I wonder why you have these feelings?
Forecasting is vital for any business – well, accurat
Do you know what sales you can expect, whether for a team of sales people or within your own business or practice? How do you feel about putting together a forecast? How do the others in your business feel? I wonder why you have these feelings?
Forecasting is vital for any business – well, accurat
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
e forecasting is vital!! This is true for professional services as well as commercial organisations. How often are your forecasts accurate? Inaccurate forecasting carries all sorts of hazards. Whether there is a tendency to be too optimistic and sunny with your forecasts, or too downbeat and understating it, there are potential problems for the business. Are people encouraged, or allowed, to be pragmatic about their forecasts or do they feel as thoug
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
h they have to tell you they will do well? Do you tend to think that there are too many factors outside of your control and so it is not worth doing anyway?
Why does it matter? Apart from the reality that sales, whether to existing or new clients, are the lifeblood of your business! Being too optimistic about potential sales can lead to various issues – anticipating revenues which will not happen, planning resources such as people and products, proble
Why does it matter? Apart from the reality that sales, whether to existing or new clients, are the lifeblood of your business! Being too optimistic about potential sales can lead to various issues – anticipating revenues which will not happen, planning resources such as people and products, proble
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
ms with cash flow, panic management! The other end of the equation, under-estimating has its own problems too! Although it can feel good to see sales coming in which were not anticipated, think about the problems they might cause within your own business. Cash flow problems of a different sort, the need to get the resources at short notice, quality of customer or client service and response are all probabilities. Becoming more accurate with your forec
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
asts will help you run a smoother and more profitable organisation.
How do you approach forecasting sales? Tea leaves, roll of the dice, check the stars or ask others for their expectations? There are some basic principles to consider or follow and a variety of methods you can use to help and they should prove more reliable then the ideas above! Although we are presuming you are already an established business, many of the principles will apply even f
How do you approach forecasting sales? Tea leaves, roll of the dice, check the stars or ask others for their expectations? There are some basic principles to consider or follow and a variety of methods you can use to help and they should prove more reliable then the ideas above! Although we are presuming you are already an established business, many of the principles will apply even f
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
or new start-ups.
First point – look at your records for the previous couple of years and do some analysis.
First point – look at your records for the previous couple of years and do some analysis.
- What are the average monthly sales? (or revenues if you prefer!)
- Can you break this down to weekly figures, if useful to you?
- Are the any obvious patterns or trends to these? Seasonal or market driven?
- What is the breakdown between new business and repeat business?
- How frequently do existing custo
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
mers purchase?
Can you assess average “order” size from each category?
What are the trends in all of these, year on year?
You may find that looking at a “Z-chart” can help you to take a realistic view of how you are doing. The key line here is the top one, which is created by taking the rolling total from the previous 12 months. It shows how you are really doing on a year-on-year basis and allows for seasonal dips and hi
You may find that looking at a “Z-chart” can help you to take a realistic view of how you are doing. The key line here is the top one, which is created by taking the rolling total from the previous 12 months. It shows how you are really doing on a year-on-year basis and allows for seasonal dips and hi
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
hs, which can distort the annual figures and cause a knee jerk reaction.
Knowing the trends is a good start. The next stage is to assess and breakdown your actual sales process. What are the specific steps and activities you take to go from identifying potential customers or clients through to getting their commitment? Not only the steps and the best practice activities, but how long does the process take on average? (The sales cycle, sales lead time
Knowing the trends is a good start. The next stage is to assess and breakdown your actual sales process. What are the specific steps and activities you take to go from identifying potential customers or clients through to getting their commitment? Not only the steps and the best practice activities, but how long does the process take on average? (The sales cycle, sales lead time
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
or whatever phrase suits your business.)
Too often, organisations and sales managers in particular spend too long looking at results, which are effectively historical data and difficult to do anything about! Fundamentally, sales will come from the right levels of activity directed at the right potential clients – using the appropriate skills. If these inputs are wrong, there is an inevitability about the outputs! Getting to grips with your sales proc
Too often, organisations and sales managers in particular spend too long looking at results, which are effectively historical data and difficult to do anything about! Fundamentally, sales will come from the right levels of activity directed at the right potential clients – using the appropriate skills. If these inputs are wrong, there is an inevitability about the outputs! Getting to grips with your sales proc
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
ess can help you to create the effective measures and control points to improve sales forecasting and sales performance.
An element of forecasting, and good sales planning and management, is the old maxim – “start with the end in mind”. What do you need to be generating need to in terms of business? (Revenue, or numbers of units or whatever works for you.) Working back from this you can start to see where your critical checks and controls should be –
An element of forecasting, and good sales planning and management, is the old maxim – “start with the end in mind”. What do you need to be generating need to in terms of business? (Revenue, or numbers of units or whatever works for you.) Working back from this you can start to see where your critical checks and controls should be –
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
and how you can assess the probability of getting a sale.
Think about your business – and be clear about the average order size or purchase level of each customer. (If you have several very different product or service groups or lines you may need to do this for each one.) Does this vary for existing and new customers? From this analysis you can see how many sales you need to get each month and what those numbers will be in each category.
Based on th
Think about your business – and be clear about the average order size or purchase level of each customer. (If you have several very different product or service groups or lines you may need to do this for each one.) Does this vary for existing and new customers? From this analysis you can see how many sales you need to get each month and what those numbers will be in each category.
Based on th
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
e averages, how many orders or customers do you need each month?
How many of these can be relied on for repeat business – and how much new business do you need to obtain?
In order to get to the point of orders coming in you will have to go through a number of stages, which may look something like this:
The stages might have different names within your business, the principle will hold true.
To help your forecasting become more accurate you need to be
How many of these can be relied on for repeat business – and how much new business do you need to obtain?
In order to get to the point of orders coming in you will have to go through a number of stages, which may look something like this:
The stages might have different names within your business, the principle will hold true.
To help your forecasting become more accurate you need to be
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
able to move through the process and assess how things stand at each stage and what is the potential of moving through to the end. The more you can break each stage down into specific activities, the better your ability to see whether you will continue moving through.
You need to initiate some form of sales reporting system to record what are the planned activities and the actual ones which take place. There are many variations available electronically
You need to initiate some form of sales reporting system to record what are the planned activities and the actual ones which take place. There are many variations available electronically
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
, which can improve efficiency and effectiveness. Most of these will enable you to create your own sales “pipeline” or “funnel” so that you can monitor progress. Basic systems such as ACT, Goldmine or SalesLogix will also allow you and your sales people to develop customer records, keep everything related to the customer in one place, and manage their diaries. You can have an even more thorough tool such as SalesCentric, which can let you incorporate t
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
e sales process and activities and carry support material on the customer record. There are ways to use all of them to help with your forecasting, though SalesCentric will probably allow you to be more accurate with it.
Alongside the need to set some form of percentage weighting at each stage, it will help you to know the ratios between each stage of the sales process. The way to go about this is to work backwards!! * As we stated earlier – how many o
Alongside the need to set some form of percentage weighting at each stage, it will help you to know the ratios between each stage of the sales process. The way to go about this is to work backwards!! * As we stated earlier – how many o
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
rders (commitments) do you need each month?
* How many proposals will you need to be doing to achieve this number? (and what is the time lapse between presenting them and getting the response?) Do you convert 1 in 3, 1 in 2 or what?
* To get to formal proposals, how many people need to be at the “analysis” stage?
* To be able to do this – how many do you need,,,,,,,,,,you can get the idea!
These numbers will help you to create the right sales contro
* How many proposals will you need to be doing to achieve this number? (and what is the time lapse between presenting them and getting the response?) Do you convert 1 in 3, 1 in 2 or what?
* To get to formal proposals, how many people need to be at the “analysis” stage?
* To be able to do this – how many do you need,,,,,,,,,,you can get the idea!
These numbers will help you to create the right sales contro
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
ls for yourself. If you are not talking to enough people at the start of the process, you are extremely unlikely to get sufficient sales!
The next phase is to look at each of the stages and think about how you can assess your chances of generating business. What criteria can you use for each one? Past relationships, number of contacts you have, relevant experience, number of competitors in the frame etc.,etc. You will need to work this out for your o
The next phase is to look at each of the stages and think about how you can assess your chances of generating business. What criteria can you use for each one? Past relationships, number of contacts you have, relevant experience, number of competitors in the frame etc.,etc. You will need to work this out for your o
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
wn organisation. You may then make some decisions about how you progress opportunities. What can you do to increase your chances? When do you decide to pull out of the opportunity?
When you are creating your forecast these percentages and numbers can then be combined to give you the potential – and with some anticipated timescales. For example, if you have ?150,000 of business being discussed, proposed or tendered you can do the maths. If ?60,000 is
When you are creating your forecast these percentages and numbers can then be combined to give you the potential – and with some anticipated timescales. For example, if you have ?150,000 of business being discussed, proposed or tendered you can do the maths. If ?60,000 is
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
at the 30% stage, that equates to ?18,000. The other ?90,000 might be at 50% - giving a potential of ?45,000. Therefore the forecast would be ?63,000. You might be able to get more than this if you take action to increase the % probability – but based on a realistic assessment, your forecast is not ?150,000!! It is having figures like that in mind which can cause problems, being far too sunny! Encourage everyone to use an effective sales planning and
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
reporting process that is relevant for your market, or even insist on it! Then manage that process, correcting problems early on rather than when sales are not happening – and set the weightings for the forecast. Let your sales people give you accurate forecasts, do not compel false optimism. There is no harm in being sunny, just be sure it will happen!!
References: www.salescentric.com, Saleslogix, ACT and Goldmine are available from many suppliers
References: www.salescentric.com, Saleslogix, ACT and Goldmine are available from many suppliers
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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