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Part 8: The art and science of creating a robust forecast for your brand plan
This month we’re going to look at the principles, stepwise approach and top tips for creating a robust forecast for your brand for the year ahead.
So how good are you and your team (and even your organisation) at forecasting? It’s worth thinking about this: How accurate were your assumptions (quantified and documented of course) for last year’s forecast? How accurate and easy to use is your patient-based forecasting model?
How many times did you need to reforecast? What was the balance of top-down and bottom-up forecasting? (ie, were you empowered to create and recommend a forecast as a team or did you have a target handed down to you from ‘on high’?) How well did you create alternative forecast scenarios to manage risk and uncertainty?
Over the past few years, I have written and run a number of pharma forecasting training programmes and am continually surprised at the complexity, time and angst that is associated with forecasting. I trust I can show you that forecasting can be fun! (Or at least a manageable exercise...)
Let’s start with a few principles for creating a good forecast:
Now let’s look at a stepwise approach to creating your forecast, albeit this can be a rolling activity driven by the
financial calendar in your company.
Step 1: Assemble your forecasting team – finance, market research, business operations and marketing and set out what you need to deliver, by when and what success will look like
Step 2: Collate your inputs to your forecast – current assumptions, current forecast, what will change, new research, new patient, payer or physician insights
Step 3: Agree your forecasting methodology – is there a model you are encouraged to use? Do you use trend analysis? Do you need to benchmark vs market analogues or the competition?
Step 4: Create your forecast – sit together as a team in a room and work through all key assumptions; populate your forecast model, test sensitivities, create alternative scenarios and encourage discussion and debate
Step 5: Pressure-test your forecast – using different methodologies, check in with your senior management, with other countries or global/regional teams and then use this pressure-testing to build your forecasting story to be able to present your forecast with confidence
Step 6: Present your forecast – create a simple story flow of quantified assumptions and rationale, scenarios, key graphs and charts to show the entire market/therapeutic class not just your brand(s). Anticipate any questions or objections and be ready to handle them with any back-up charts. Show how your forecast relates to your SWOT and brand strategy.
Of course, there are many different types of forecasts that will determine exactly how you work through these steps. A manufacturing forecast may need much more detail by month and by pack, formulation or strength.
A five-to-ten year forecast for a brand will need a higher-level set of assumptions on indications, competitive dynamics and product life cycle decisions. A launch forecast may need a great deal of information on the likely regulatory label, national and local pricing, access and reimbursement assumptions and speed of prescriber uptake.
Good luck with your forecasting for 2020 and 2021. One thing we do know is that it won’t be precisely accurate, but it should be directionally correct as a key element of your pharma brand management toolbox.
This is the last part of Pharma Brand Planners’ blog. I do hope you have enjoyed reading it as much I have enjoyed writing it.
Pharma Brand Planners' Blog (Part 7): How do you manage risk and uncertainty in your brand plan?
Stephanie Hall is MD of brand planning healthcare consultancy Uptake Strategies
Streaming Well is a healthcare-focused, award-winning video production company which operates in the US and Europe. We create engaging visual...