campaign planning – direct wines using historic data to improve planning and forecasting tfm&a...
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Campaign Planning – Direct Wines
Using historic data to improve planning and forecasting
TFM&A 2014
David Lockwood: Direct WinesTerry Hogan: Golden Orb
Campaign Planning – Direct Wines
Context
• UK planning based on multiple linked spreadsheets– Other countries followed different approaches– Budget process took up a lot of resource
• No single reporting tool or data warehouse– UK business on different systems from the rest of the world– Assembling data for marketing meetings very time-consuming
• Forecasting continuity sales cumbersome and inflexible• Different terminology/KPIs in use in different parts of the
business– In some cases the same term being used to mean something
different in different countries
• Decided to build a global marketing system to support marketing across all countries
Campaign Planning – Direct Wines
A single system to store and report on past campaigns– Automatic feeds from UK and international transactional systems
One system for reporting and planning future campaigns– Learnings from past campaigns feed into planning future ones
Shared database rather than Excel– Single version of the truth– One set of definitions, terminology– Standard, automated methodology for calculating/forecasting
Outline – system fundamentals
Campaign Planning – Direct Wines
Modules
Sales reporting
Campaign planningForecasting
Campaign Planning – Direct Wines
Campaign-level sales reportingGross/net Orders – by day, order channel, response code...
Comparison with budget/ plan
Detailed campaign financials
Numbers split out in various ways
– Response code– Test– List/publication
Products sold
Campaign Planning – Direct Wines
Time-based crosstab reporting
Aggregates the results of multiple campaigns over time
Can split out results across several dimensions
Typical ‘dimensions’ for reporting– Campaign– Response code attributes (activity,
media type, list...)– Time – various levels– Order channel
Ability to view top-level numbers and then to drill into the detail
Campaign Planning – Direct Wines
Sales reporting - considerations
Need a feed of order information from transactional systems– Orders/revenue– Product costs– Aggregate numbers by e.g. response code, day– Doesn’t need details of individual orders or customers
Probably a daily feed needed for campaign sales (overnight)– Other data can be updated/stored weekly
Don’t over-complicate or request too much detail– There are always trade-offs between detail and performance– Different levels of detail are appropriate for different measures
Campaign Planning – Direct Wines
Campaign planning: summary of the process
VolumeX
Response rate %
Cases per order
P&P, AOV and product
cost
Existing customer
%
Response curve & channel
split
Orders Cases Revenue/margin
Recruits Phasing
Application of direct/indirect fulfilment and marketing costs gives net contribution
To phase the sales forecast over time, you need to build a sales profile/response curve
Campaign Planning – Direct Wines
Building a response curve
Build different curves for different campaign types and media
Requires good data, correct campaign details
Choose a number of representative campaigns
Express each response code’s sales in terms of days after start date
Calculate the overall percentage of orders received by day 1, 2, 3...
Campaign Planning – Direct Wines
Phasing the campaign forecast
Apply sales profile to the top-level campaign numbers
– Plus order channel split if relevant
– For Direct Wines, we generate a daily sales forecast by order channel
The system can build an aggregate curve if the start dates are different
Unless you have a very simple product range, this sort of tool is not appropriate for detailed product planning
– Primarily a tool for planning marketing activity
Campaign Planning – Direct Wines
Reforecasting a campaign after it has started
The response curve can be applied to the actual sales to date to create a revised forecast of final sales
Can apply a different percentage to orders through each order channel
Ideally needs to be done every day for each response code and order channel
Day-of-week adjustments may be needed for an accurate reforecast
Changes in forecast flow through to customer service, merchandising, finance
Campaign Planning – Direct Wines
Modelling non-campaign sales
Direct Wines have a continuity business in addition to ‘standard’ customer marketing
– The continuity business generates sales without an associated ‘campaign’ that needs planning
– Sales to existing continuity members can be modelled on the basis of their existing memberships
– We can start to forecast continuity back-end sales when planning recruitment or ‘upgrade’ campaigns
The main continuity forecast is rebuilt weekly– However changes to recruitment or upgrade campaigns have an
immediate knock-on effect
Campaign Planning – Direct Wines
Continuity modelling
A complex area – the full details are beyond the scope of this talk
Continuity behaviour is quite predictable over time for a reasonably large group of customers
Simple approach – apply a curve to the initial recruits
Two enhancements:– Actions at cycle n depend on
actions at cycle n-1 – For current cycle, we can use the
actions received to date to adjust our estimate
RC-INS
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Cycle number
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as %
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ase
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Current
Percentage ordering based on previous action
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Cycle number
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Ordered last time Skipped last time
Campaign Planning – Direct Wines
Thank You
www.golden-orb.ltd.uk
@GoldenOrbLtd