Sales Data Are Driver In Decisions About Production, Marketing WD-40 uses sales data to determine whether to acquire a product line.(LEADERS & SUCCESS)(MANAGING A SUCCESSFUL COMPANY)

Byline: MARILYN MUCH

Well before Garry Ridge paid $47 million for Heartland Corp. in June, the chief executive of WD-40 Co. made sure he knew the sales prospects for each brand he was about to buy.

Ridge, who's been at the helm of the maker of lubricants and household cleaners since 1997, says he never makes an acquisition without forecasting a candidate's future growth.

Ridge also uses current data to determine whether a brand's sales will support the marketing investment needed to expand awareness. He won't buy any brand unless it stands to post at least $10 million in sales in the first year his company owns it.

Most successful companies use sales forecasting to make decisions about spending on items such as production and marketing. Forecasting helps managers develop budgets.

In fact, it often drives budgets. By developing projections based on historical sales data, companies can determine how to price products and when to put them on sale.

In the case of Heartland, Ridge's team saw strong growth potential in one product, Spot Shot Carpet Stain Remover. It generated most of Heartland's $34 million in sales in the prior year. Through research, they found only 8% of U.S. households owned it.