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Wednesday, December 5, 2012

Time Series Analysis Factors

The most common way to forecast sales is using the Time Series Analysis which is actually prepared on the basis of past sales. By utilizing a time series analysis the business leader is able to keep his sales teams more efficient by helping in :

•    Smoothing out the erratic factors (e.g. by using a moving average)
•    Adjust for seasonal variation
•    Identify and estimate the effect of specific marketing responses

A Time series analysis covers  four components which I have observed in majority of the scenarios that I have encountered:
  1. Trending factors: This pertains to the basic judgment of the sales are going up, down or just flattening.
  2. Seasonal or cyclical factors : I have noticed that most sales are affected by swings in general economic activity or seasons (e.g. : Majority of the B2B sales go down during the End of year in the western markets due to the holidays) Usually such seasonal and cyclical factors occur in a regular pattern.
  3. Change in Marketing Strategy : This component could be taken into consideration as something that includes the results of particular measures that have been taken to increase sales
  4. Unexpected Events: This could include various disturbances like the start of the recession, or industry collapse, they can be easily identified by isolating from the past data , so as to help in projecting a more accurate sales forecast
If you want some perspective on how you or  your company needs to enhance their Sales/Client Management Capabilities, please email me at shubhanjan.saha@gmail.com
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