When a company suffers an interruption, they may generate actual sales subsequent to the event and those actual sales will usually be less than the projected But-For sales during the time between the interruption and the point in time when the enterprise returns to normal operations. Actual sales may also lag the projected sales after operations are returned to normal due to other factors. If those factors affect future sales, then the damage expert will have to project sales into the future. Therefore, it is important the damage expert determine, if such factors exist and the impact of these factors on future sales. These factors are specific to the enterprise and/or its customer base. They often involve damage to a business’ brand image or its customer purchase patterns. The business may choose to mitigate the impact of these factors by repairing the damage with investments in advertising, or sales promotions. However, the cost of this mitigation is a cost to the business that is directly attributable to the event and therefore a damage caused by the event. Actual sales may have to be adjusted for other factors such as:
Postponed sales: Postponed sales are sales that should have occurred during the interruption period that were delayed and actually occurred after the interruption period.
Loss of customers: A business interruption event, such as a data breach that affects customer’s personal information, can result in long term loss of customers. But-For sales projection should include these sales and they should not be included in the actual sales projection.
Unit Price Variance: A business may suffer long term unit price variance due to the introduction of new competition, new buying patterns, or loss of brand loyalty caused by the event. In this situation, unit sales volume may return to its pre-loss level, but actual sales dollars will not since the unit price has declined due to the event.