This document discusses forecasting marketing and sales for 2012. It covers topics like validating corporate trends, comparing top-down versus bottom-up forecasting, predicting new product success, assessing marketing strategies, and evaluating marketing expenses. The presentation recommends bottom-up forecasting by aggregating salesperson account portfolios and predicting new product adoption using innovation guidelines. It also provides criteria for assessing large deal opportunities and stresses that sales discipline may provide a higher ROI than tactical marketing expenditures.
Best Practices for Implementing an External Recruiting Partnership
Assessing the Reality of Your Company Sales Forecast
1. Assessing the Truth and Validity in Your
Marketing & Sales 2012 Forecast
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2. The Marketing & Sales Forecast
Marketing
Initiatives New
Market Markets
Momentum
New Sales
Forecast Share Gains
Customers
New Marketing
Products Expenses
Pricing
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3. What We’ll Cover
Corporate Trend Forecasting
Tops Down vs. Bottoms Up Forecasting
Predicting New Product Success
Assessing the Marketing Strategy
Summary
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4. Corp Trend: Validating Continued Success
Adding capacity to overheated market
demand
Exploiting a competitive advantage
Offering a whole new economic value
proposition
What evidence exists that things may change ??
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5. Corp Trend: Validating Continued Struggles
The market is dead
The value proposition is invalid
The competitive position is weak
The ability to communicate is weak
The delivery function is failing
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6. Top Down vs. Bottom Up Forecasting
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7. Tops Down Sales Forecasting Techniques
The boss said
Validity
Industry trends
Increasing
Delphi
ForecastPRO®
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8. Bottoms Up Forecasting: one popular approach
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9. Bottoms Up Sales Forecasting: The Sum of the
Sales Account Portfolios
Account Portfolio
Bottoms up by account
80:20 rule
Customer inquiry
Socket penetration modeling
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10. Sources of Growth
Market Momentum
Pricing (+ / - )
New Products
Share Gains
New Markets
New Accounts
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11. The Individual Account Forecast
Factor 2009 2010 2011 % Change 2012
Base $2,458,740 $3,456,789 $2,878,705 $2,878,705
Momentum (10%) (287,870)
Pricing (+ / -) 2.0 % 57,570
Base (8%) $2,648,405
New Product(s) 2.8 % 75,000
Share Gain 10.0 % 288,935
New Markets 0 0
New Customers 0 0
Total 4.6 % $3,012,341
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12. Total Sales Forecast: The Sum of Accounts
Factor 2009 2010 2011 % Change 2012
Base $24,587,400 $34,567,890 $28,787,059 $28,787,059
Momentum (10%) (2,878,700)
Pricing (+ / -) 2.0 % 575,700
Base (8%) $26,484,059
New Product(s) 2.8 % 750,000
Share Gain 5.0 % 1,439,352
New Markets 3.5 % 1,000,000
New Customers 1.5% 450,000
Total 4.6 % $30,123,411
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13. Assessing Market Momentum: The Sources
Economic
Macro-economic factors
Micro-economic (industry)
“It’s more important to
understand what’s going on
Corporate economic in your customer’s markets
than in your own.”
Regulatory
Demographic
Does your sales team know how to ask?
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14. Factors Affecting the Adoption of a New Product
The number of new sockets
The economic value of the offering to the customer
The extent of the intra-market network
The degree of competitive turmoil
The difficulty / ease of trying it and changing
The channel enabling capability
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15. Assessing New Product Sales Projections
Installed
Base Installed Base
Units
(log scale) Socket Growth
Annual
Unit Sales
Re-Packaging &
Fragmentation
Rejuvenated growth @ HIGHER prices
and HIGHER margin
Time
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16. Does the Product Deliver Strong Economic Benefit?
Benefit Contributor Savings calculation / yr Bottom Line $
Increased Wins # Sales people Avg 1 yr ordr $ Typical PBT # wins / sales person / yr Total $ earned
10 $180,000.00 7% 2 $ 252,000.00
Price premiums Annual Sales Price premium % orders with premium potential Total $ earned
$25,000,000.00 10% 10% $ 250,000.00
Accelerated Growth Annual Sales Typical PBT Accelerate growth rate Total $ earned
$25,000,000.00 10% 5% $ 125,000.00
Reduced Mktg Expense Marketing Budget Reduced need: mailers, trade shows, advertising, MARCOM, brochures Total $ saved
$1,500,000.00 25% $ 375,000.00
Travel Optimization # Sales people Avg cost of a trip Useless trips avoided thru focus / sales person / year Total $ saved
10 $1,000.00 2 $ 20,000.00
Estimate Annual Earnings Impact $ 1,022,000.00
Bottom Line Impact Total = Increased Earnings x 5 Years = $5,110,000
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17. Assessing Market Share Gain Expectations
Number of competitors
Occupied vs non-occupied (no
pun intended)
Current pain vs. pain of change
Economic benefit of change
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18. Assessing the Viability of a Market Strategy
Strategy Target
Frontal New Product
Fragment New Customer
Flank New Market
Defend Current Market share
Depart Current Customer
Develop Current Product
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19. Market Strategy Alignment Check
(log scale)
Installed
Target Offering Differentiation
Units
Base
Strategy Price Channel
Accounts Profile Promotion
Innovators
Early Adopters
Early Majority
Strategic Late Majority
Misalignments
Installed Base
Annual Sales
Laggards
Time
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20. Assessing the Home-Run “Big-Deal” Opportunity
Compelling Need
Match
Economic Value Proposition
Competitive Advantage
Champion
Leverage
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21. Assessing Marketing Expense Effectiveness
“I know at least half of my
marketing and advertising
expenditures are wasted.
The problem is I don’t
know which half.”
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22. Typical Marketing vis-à-vis Good Marketing
Typical Marketing
Brochures and Print Collateral
Websites The Foundation
Mailings
Social Media • Market Strategy
Publicity • Business Development
Advertising Programs • Sales: Skills & Process Disciplines
Branding Programs • Performance Excellence
Trade Shows / Booths
Telemarketing
Merchandising Materials & Programs
Market Research
Cost $$$$$$ $$
Benefit $$ $$$$$$
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23. Discipline Provides the Highest ROI
Strategic intellect and science
Focus
Economic benefits selling
Customer dialogue
Sales account portfolio management
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24. Investment Vs. Discipline
Proposed Marketing or Alternative
Expense Level Required
Sales Initiative Low-Cost / No-Cost Discipline
Sales Qualification
CRM Mid to High Opportunity strategy formulation
Focus
Value Pricing
Price Reductions Mid to High Focus
Selling based on Economic Value Propositions
Focus
E-strategies Mid to High
Intra-market network activity
Tactical marketing (ads, Intra-market network activity
High
tradeshows, mailers, etc) Publicity, promotion, press relations, blogs
Focus, Focus, Focus
Selling Relative Perceived Quality
Branding High
Press, publicity, blogging
Intra-market network activity
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25. Summary
Preference: bottoms up forecasting by the sum of sales person
account portfolios
Forecast Momentum through customer inquiries into their markets
Preferable Strategies: fragment (segmentation) and flank
(differentiation)
Forecasting new product sales: Adoption of Innovation guidelines
Predicting the close of the “Home Run” deal: 6 Qualification Criteria
Discipline can pay back more than tactical marketing expenditures
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26. The QMP Group, Inc.
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QMP™’s mission is to increase a company’s The QMP Marketing & Sales Engine™
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Jerry Vieira, CMC Training
Copyright The QMP Group, Inc. Institute of Management Accountants
Questions? Call Jerry Vieira at 503-318-2696 September 2011