by Usman SheikhApproach to Forecasting: Why Sometimes Looking Back Won’t Move You Forward
A Novel Approach to Forecasting
It’s time to shake up your forecasting strategy. Forget what you think you know about predicting your business’s future – we’re about to dive into a bold approach that could redefine your goals and skyrocket your success.
If you are a marketer (a good one at least) – then forecasting falls in your realm. You own the P&L and drive revenue-related decisions for your small business or your enterprise.
I have seen so many marketers that we set-up campaigns with relying solely on last year’s numbers to forecast or plan your next year can be a risky business strategy.
This approach, known as single-point forecasting, often fails to account for the dynamic nature of markets and economies.
One major pet peeve with this method is that it doesn’t consider market trends or potential disruptions.
For example, I really want to know who predicted COVID19 coming for their 2020 plans when doing their budgeting/forecasting in 2019?
Yet, I am willing to bet that many 2020 projections relied entirely on 2019 data and were caught off guard by the COVID-19 pandemic’s impact.
Another problem is that this approach ignores cyclical patterns in your industry.
Some businesses experience seasonal fluctuations or multi-year cycles that won’t be captured by looking at just one year of data.
Also – companies change. Capabilities change. Capacities available changes. Market demand changes.
Relying on last year’s numbers doesn’t account for internal changes within your organization. New product launches, changes in leadership, or shifts in strategy can all significantly impact your performance.
The Old Way vs. The Bold Way
Many of us fall into the trap of forecasting based on last year’s numbers or past performance. But here’s the truth bomb: that approach is like driving while only looking in the rearview mirror. It might feel safe, but it won’t get you where you want to go.
So, what’s the secret sauce to creating a truly bold strategy? It’s all about defining your space and setting your sights on the top player in that arena.
Step 1: Define Your Space
First things first, you need to clearly define your market space. And here’s the kicker – it doesn’t have to be the entire global market. In fact, if you’re a smaller player, focusing on a specific niche can be your golden ticket.
Pro Tip: Be meticulous in scoping out your space. The more precisely you define it, the more effectively you can target it. (in good planning, this is where the work is).
Step 2: Identify the Market Leader
Once you’ve defined your space, it’s time to get competitive. Who’s the big fish in your pond? That’s who you’re going after. Your goal? To compete for their market share.
Step 3: Forecast Based on Market Share, Not Past Performance
Here’s where the magic happens. Instead of basing your forecast on what you did last year, set your sights on capturing a slice of the market leader’s pie. This approach pushes you to think bigger and bolder.
Remember: Use last year’s performance as a benchmark to celebrate when you crush it, not as a ceiling to limit your growth.
Why This Approach Works
1. It forces you to think bigger
2. It keeps you focused on growth, not maintenance
3. It positions you as a serious contender in your space
Here is a quick video that summarizes it quickly:
The Bottom Line
Forecasting isn’t about playing it safe – it’s about setting audacious goals that push you to new heights. By defining your space, targeting the market leader, and focusing on market share instead of past performance, you’re setting yourself up for explosive growth.
So, are you ready to leave the old way behind and embrace a bolder future?
Want to learn how marketers and business leaders can continue to stand out at work (even in this AI driven era?) – check out our blog A Marketer Can Stand Out (its an oldie but a goldie)
Remember, in business, playing it safe is often the riskiest move of all. Dare to be bold, and watch your business soar!
Until next time, keep pushing boundaries and aiming high. Your future self will thank you!
If you need outside the box thinkers for your next marketing, strategy, campaign or project – you know who to call? If not, here is the number again –> 437-562-1316
From a start-up helping local small businesses, over a span of 5 years, Usman has built Web Worx Labs to be a leading provider of digital marketing solutions that employs 15+ full-time employees and has customers in over 30 countries.
Outside of work and his passion for all things digital, Usman is a proud father of three, loves running and is an avid reader.
Follow Usman on LinkedIn or Twitter as he is always sharing tips on strategy, branding, marketing and analytics.