When the pandemic hit, budgets were the first thing on the chopping block for most businesses. While an understandable gut decision to batten down the hatches and weather the storm, it was not necessarily the right one when made without taking into account all of the marketing and non-marketing factors that can impact a business to form a holistic view.
For example, marketing alone often drives 15-30% of sales and significantly more for some businesses. Being agile in the midst of uncertainty is one thing. Making knee-jerk gut decisions is another. The brands that will not only survive but thrive as we face an uncertain future will be the ones that opt for data-driven decisioning supported by the power of scenario planning to re-optimize their marketing spend and mitigate against potential loss.
Relying on past tactics or gut instinct is a recipe for failure in unprecedented times. Understanding what is, and is not, under your control is required to find the path to achieve your goals. Data-driven scenario planning ensures you can achieve those goals while balancing risks and opportunities. And as disruption accelerates, scenario planning becomes even more of a tactical and strategic necessity.
In our recent webinar, we took a deep dive into the principles and framework needed to implement data-driven decisioning through scenario planning. The framework comes down to three key factors, which work together to establish a credible foundation to support several potential visions of the future:
- Measurements of Success: Key Performance Indicators (KPIs) such as sales, new customer acquisition, store or site traffic, brand health, and other customer or consumer metrics.
- Performance Drivers: Business drivers that are controllable (e.g. marketing, product launches, sales efforts, etc.) and non-controllable (weather, seasonality, competition, economic factors, consumer trends, etc.)
- Key Considerations: Critical business dynamics such as route to market (ecommerce expansion, brick & mortar, catalog, etc) and customer dynamics (segmentation and tiered classification).
The best odds of success in scenario planning come from accurately identify relationships between these elements of the framework – namely performance and business drivers (including marketing and non-marketing, internal and external), and then leveraging that knowledge to map out not a single forecast, but a range of possible futures. Robust scenario planning also requires a data-driven measurement framework, cross-functional alignment as well as integration into overall business planning.
To learn more about how to apply the scenario planning framework to create your own best odds of success, watch the recording of the webinar.
Scenario Plan for Future Success