March 10, 2011

Forecast Forensics + Digital Profiles: Making Adjustments

If we can predict the Digital Profile that a customer is likely to migrate to, and if we can predict how much a customer is likely to spend, then we can make adjustments to our predictions, allowing us to see how a changing business might lead to a changed business in the future.

I like to create a tab in a worksheet that allows me to make changes to the future trajectory of the business.  My tab looks something like this:

Take a look at the image above.  In the bottom half of the worksheet, I change how customer acquisition is likely to evolve, in the future.  If a Digital Profile shows a historical increase of, say, 15%, then I might type in a factor of 1.15, to reflect a future 15% increase.

Take a look at the "Mobile Mavens" row ... I've jacked that one way up, to account for projected increases in the channel.  Conversely, I ratcheted down the "Pricey Website Preference" Digital Profile, in order to account for a likely shift in customer behavior, going forward.

If we can predict where a customer is likely to migrate to ... and if we can predict how much that customer might spend ... and if we can make adjustments, allowing us to consider different possible outcomes ... well, then, we've got something interesting, don't we?

Next week, we'll explore some of the possible outcomes offered by the combination of Forecast Forensics and Digital Profiles.