HOW TO: Calculate promotional risk

Hundreds of companies are regularly putting the operation of their businesses at risk by underestimating the difficulty in forecasting sales promotion redemption accurately - and they certainly don't sufficiently appreciate the awful consequences that can follow. Yet there are tried and tested ways to eliminate the risk completely.

Research by Fotorama into the accuracy of forecasts for sales promotion redemption given by brand management teams shows a high level of inaccuracy, with only eight per cent of offers coming within 10 per cent of expected levels.

An inaccurately forecast promotion can create massive problems across a business: