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Using historic data to improve planning and forecasting. TFM&A 2014 David Lockwood: Direct Wines Terry Hogan: Golden Orb. Context. UK planning based on multiple linked spreadsheets Other countries followed different approaches Budget process took up a lot of resource

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using historic data to improve planning and forecasting

Using historic data to improve planning and forecasting

TFM&A 2014

David Lockwood: Direct Wines

Terry Hogan: Golden Orb

  • 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
outline system fundamentals
Outline – system fundamentals

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
campaign level sales reporting
Campaign-level sales reporting

Gross/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

time based crosstab reporting
Time-based crosstab reporting

Aggregates the results of multiple campaigns over time

Can split out results across several dimensions

Typical ‘dimensions’ for reporting


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

sales reporting considerations
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 summary of the process
Campaign planning: summary of the process

VolumeXResponse rate %

Cases per order

P&P, AOV and product cost

Existing customer%

Response curve & channel split






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

building a response curve
Building a response curve

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...

Build different curves for different campaign types and media

Requires good data, correct campaign details

phasing the campaign forecast
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

reforecasting a campaign after it has started
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

modelling non campaign sales
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

continuity modelling
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

Thank You