“It's tough to make predictions, especially about the future.” —Yogi Berra
Even if you're still working with a No. 2 pencil and scrap paper, there's no reason you can't produce outstanding quality forecasts with more predictability and reliability than you've ever experienced before.
Although advanced mathematics and enormous computational power have improved significantly, few would argue that forecasting is an exact science. That's because at its core, forecasting is still mostly a human dynamic where accuracy is dependent on…
- Asking the right people the right questions
- Their willingness to answer truthfully and completely
- The ability to separate the meaningful elements from the noise
- The openness of the forecaster to suggestions of process improvement
That last point is key: process improvement. Consistently good forecasting isn't a mathematical exercise performed at regular intervals (e.g., quarterly) as much as it's an ongoing process of gathering and evaluating dozens or hundreds of points of information into a decision framework.
Then, when called upon (e.g., quarterly), this decision framework can output the best forward-looking view grounded in the insights of the contributors. While software can facilitate process structure by prompting for specific fields of information to be included, it cannot make judgments on the quality of the information being inputted. Garbage in, garbage out.
Which might help clarify what Yogi was referring: that even though baseball statisticians have over 100 years of data loaded into high-speed computers at their fingertips, the human element in what happens with the very next pitch makes it nearly impossible to forecast (with any acceptable accuracy) who will win the game, never mind the pennant.
The Benefits of Better Forecasting
As marketers, our job is to consistently prepare forecasts that help our companies conceive, plan, test, build and ultimately sell successful products and services. Marketing as a discipline benefits from better forecasting in at least two specific ways.