Academic journal article The Journal of Business Forecasting Methods & Systems

Building Alliance with Clients: Key to Success in Forecasting

Academic journal article The Journal of Business Forecasting Methods & Systems

Building Alliance with Clients: Key to Success in Forecasting

Article excerpt

About 10% of decisions are based on hard facts ... to be an effective forecaster one has to learn not only how to prepare good forecasts but also how to deal with the emotions of forecast users ... among other things, the forecaster should make every effort to learn about job responsibility, professional background and personal interest of his or her clients.

Many of us have heard a forecaster making a statement concerning forecast users such as: "I feel like I'm dealing with a bunch of idiots. They don't seem to grasp even the basic logic of what I'm trying to tell them. After running hundreds and hundreds of scenarios and thousands of simulations, I really want to tell them: "Shut up, you are stupid! If you don't believe my forecast, why even ask me to be here?" This poor guy has failed to accomplish his goal of selling his forecast to his clients (forecast users). May be he did not incorporate into the forecast some crucial developments in the market place. Whatever the reason may be, his clients did not perceive any value in his work.

The question then is not whether there are other ways to create more accurate forecasts but, rather, how much value his clients perceive in his forecasts. In reality, it is not how accurate the forecasts are but how strong are the alliances he has built with his clients before, during, and after the forecasts are created. We will demonstrate the importance of building alliances with forecast users by presenting actual case histories from the pharmaceutical industry using David as the surrogate forecaster.

David was asked to create a sales forecast. The brand team (BT) believed that this new formula would help them to switch 80% of patients from the current formula, although this new formula won't be available on the market until 6 months after the existing formula's patent expires. The stated switching rate is overly optimistic and David disagrees with it. At the same time, he recognizes that it won't be easy to change their perception.


Forecasters and clients often have different perspectives and behavior styles. Each one makes a different argument to support his or her viewpoint. Furthermore, they usually have a different emotional and psychological make-up. Figure 1 gives the perceptions (both internal and external) of both forecasters and marketers (forecast users).

The forecasters assist marketing teams to develop future sales projections (and indirectly provide insights into market dynamics), while marketers and sales reps have to live with the forecasts and thus must make them happen.

Understanding these relationships and interaction, David challenged his team with a series of questions to ascertain the possibility of reaching a switch rate of 80%, such as:

1. Does the new formula provide significant advantages over the old one?

2. Will the cost per course of therapy be different?

3. What is the price of generics?

4. How long does it take for a generic to replace a brand drug in the market?

5. Will the company commit adequate resources behind this new formula to promote it?

In the end, the brand team and David collaboratively created a forecast with a realistic and achievable target, but without twisting each other's arms.


In our experience, we have found that what clients want most is not necessarily the most precise forecast, if there is any, but someone who will take away their worries and be on their side. Yet all too often, they encounter forecasting professionals like us who add to their worries, threaten their pride, and create extra headaches, thereby forcing them to confront - something they didn't want to do.

In David's assessment, the BT was working hard to retain their sales and hold their market position. At the same time, they were fighting for internal resource allocation. …

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