To build a collaborative forecast, you need more than just Marketing, Finance and Supply Chain; you must have Sales involved in the process. They add customer level insights, market intelligence, and real time information that is often not available from anyone else.
Making and keeping a connection with your Sales partners is not easy, but it will pay dividends if you are willing to put in the effort. Here are a few key practices I have used successfully to build a good two-way relationship with Sales that has not only benefited forecast accuracy, but helped Sales drive revenue.
Don’t Assume Everyone Thinks Like You
Never assume Sales is operating with the same “one number” philosophy that Supply Chain uses. Make sure to ask if there are customers being targeted for growth or that are being allowed to decline. You might be surprised to find variances that will provide you with valuable insights that algorithms simply cannot identify.
Do not assume that every person you engage with in your forecast discussions will interact with you the same way, and process data the way you do. Learn Sales vernacular—do they use dollars or units, what calendar period do they compare to, and how do they aggregate their data? Be prepared to modify some of your data to make it user friendly for your audience.
It is important to understand that you will encounter colleagues in Sales who embrace the approach, soak up data, and ask for more. You may have others that are not as enthusiastic to engage and need more time to get up to speed. As you both learn how to work better together, always be clear as to what it is you are looking for from your relationship with them. Do not assume they know what a Demand Planner needs to do their job properly, and vice versa.
It is always good to remind those you work with what the demand forecast is used for in your organization, and how valuable the work done to improve forecasts is to company performance in terms of inventory savings, increased revenue, and customer satisfaction.
Work Hard To Be One Of The Team
Often the personalities of Sales are more extroverted compared to those in Supply Chain—do not let this intimidate you. Show your interest in learning what challenges they face, how they are measured and—equally as important —get an insider’s perspective on your customers. Start by asking to attend sales meetings, customer reviews, planning sessions, and whatever is relevant to your role and available in your company.
As your presence becomes more familiar, and you begin to understand the Sales culture, you can learn what important goals they are working towards, how they are incentivized and, most importantly, they will become comfortable with sharing important insights and keeping you connected. As you build a reputation for being passionate about helping drive the business, you create partnership opportunities. As you build this rapport and establish trust, you can ask harder and more challenging questions, and ask for feedback to make things easier.
In a strong two-way relationship, you need to ensure you are giving at least as much as you are getting. As you build your connections over time, you will begin to get more invites to important meetings, receive more relevant emails, and communications will be less challenging.
Trust, Trust, Trust
Now that you are building your connections, you need to ensure you maintain trust. Many people avoid the forecasting process because it is one where you are often wrong. Make sure you give lots of credit to your colleague/s in Sales when you get information that leads to a better forecast.
You also need to show appreciation for the effort in getting information that may not be valuable as well. Customers are not always forthcoming with their numbers but having a Salesperson that is willing to make the effort and engage with a customer to get information is extremely valuable. As you develop a good flow of customer information, you can utilize and learn to refine the data over time.
Remind Salespeople frequently why good forecasts are important. If your motivation is about better customer service and improving profitability, you will get more support than if your only motivation is to improve your own MAPE.
Think Like A Salesperson
Sometimes you need to act like you are in Sales to communicate with Sales. Anyone who has worked in Sales knows you need to be persistent to get a customer’s business. You may have to be persistent to get their responses and to hold their interest. Do not give up when you don’t get fast responses to your questions. Instead, keep asking how you can help them serve our customers better. Remember, persistence pays off.
As you review data, you can also think like salespeople. For example, I noticed that one of our customer’s volumes had declined over the years on a group of items. Since the Salesperson in charge of this account was new, this information provided him a previously unknown opportunity to pursue. Often customers are moved between members of the Sales team, and information is not always transferred effectively.
Do not assume that important pieces of information like this are already known. By providing helpful insights to new hires, you will build better relationships.
When reviewing future sales projections, most salespeople tend to be optimists. To help reduce this spin, I often ask them to project as if they were wagering their own money on the outcome. Phrasing the question to include a pretend bet on the outcome, using money out of their own pocket, may change their frame of mind to be more realistic.
Sell them on ideas like participating in annual sales planning meetings, getting you access to customer portals, including you in customer calls, and even connecting you to individuals at the customer who are directly involved in the purchasing process. If you can take some of the burden off Sales and get information directly, you both win.
When hiring Demand Planners, consider those with successful experiences in selling or working with Sales as they can bring valuable skills to your team. Sometimes it helps to think small if you have just begun to work with the Sales team. Start by building a strong relationship with just one member of the Sales team, and that can become a springboard to expanding your reach. Showing others the work you have done with another member of their team is an effective way to expand your network with the Sales team.
Keep Score & Take Advantage Of Salespeoples’ Competitive Nature
You need to introduce forecast metrics into the conversation at some point, but keep it simple, especially in the beginning. Forget about MAPE, WMAPE, MAD and other metrics that are difficult to understand and not directly relevant to salespeople. For example, try forecast bias percentage (forecast/shipments-1).
This measure is an easy way to show trends in forecast performance that need attention. If you are showing your sales partner that we have over forecasted their customer by 25% the last 4 months, this is a good starting point to take action, and does not require a background in statistics.
Connect metrics directly to each salesperson through their customer and establish forecasting metric targets that are adjusted to the variability of the customer. The most challenging customers should have lower forecast accuracy targets, and vice versa. Your goal is to create a level playing field to stoke competitiveness among your selling professionals. At virtual meetings with the entire sales team present, I have had a lot of fun presenting a Forecaster of the Month award, complete with certificate and photo. Make sure they understand how the metric works, how they can provide additional insights to potentially override the current model, and let the games begin!
Keep It Simple
Everyone’s time is valuable. As I mentioned above, keep metrics easy to understand, and keep the data you share simple, and in a format where it is easy to see the key points. During your forecast discussions or exchanges with your Sales partner, don’t ask for analysis, instead ask for answers. Lay out the situation, then provide specific options or directions to take.
My questions look more like multiple choice rather than ‘fill in the blanks’. I have found this approach to return clear and actionable responses. If you are not getting actionable responses, you may need to better frame how you are asking the question.
Ultimately, where Sales can lend the most value in planning is to explain or — better yet, alert to — outliers. Statistical models do fine when demand is steady while qualitative customer information is very valuable is when there is a change in course. Did a customer gain new volume and, if so, approximately how much and when will it begin? Has there been a shut down due to the pandemic, did they delay a new product launch, or even go out of business?
Since you are now like a member of their team, and better understand their business, you can ask simple, clear and relevant questions and get valuable insight that explains outliers and improves your forecasts.
Win Over Their Leader
As with any large and important change initiative, you need to get their leader’s support early. You may have to work hard to convince them to adopt a forecast KPI to their metrics—to facilitate this, share the dollar value of improving forecast accuracy, i.e., what savings are gained for every one percent improvement in under- or over-forecasting.
If you have not done this exercise, IBF has easy-to-use calculators that can help. Connecting dollars to forecasting improvement will help you get your Sales Leader interested. Remember, how their leader interacts with the demand planning team will set the tone for how the Sales team as a whole interacts with you.
Remember that effective relationships are built over time, not overnight. This is especially true if Sales and Demand Planning have not had a strong connection in the past. By applying the tips above, being an engaged partner, and being willing to lend a hand when needed, you will gain insights into your customers’ behavior and intelligence that will lead to better qualitative forecast inputs.
This article originally appeared in the Spring 2021 issue of The Journal of Business Forecasting. Become an IBF member and get the Journal delivered to your door quarterly, plus discounted entry to IBF conferences and events, members only tutorials and workshops, access to the entire IBF knowledge library and more. Get your membership.