Let's say that your Management team is being asked to grow the business over the next five years. The mandate is simple ... the business must be 2.5 times as big in 2015 as it was in 2010.
Well, somebody might say ... "I'll bet if we can increase customer loyalty by 20%, we'll be able to grow this business. Let's see what impact that has:
Good gravy, that doesn't get the job done, does it? Now, be honest, there's nothing wrong with the business being 33% bigger in year five because annual repurchase rates increased from the mid-40s to the mid-50s. That's a big home run.
But it isn't what Management is asking for, is it?
The answer has to come from new customer acquisition. Let's try something. Let's reset loyalty metrics to base levels, and let's double new customer acquisition counts.
Now, be honest, it isn't easy to double customer acquisition counts, is it? And yet, if you double counts every year, it isn't good enough! It isn't good enough!
How about a 2.83x increase in new customers?
That does it!
Your job is to make this message easy for everybody to understand. You are going to have to, essentially, triple the number of new customers, in order to grow the business by a factor of 2.5x.
Dashboard mavens will love this ... you set up dashboards for everybody to see, illustrating the number of new customers vs. the goal of tripling current totals, by source. Everything gets measured.
Profit should get measured, too. If it costs you $10 of profit to acquire an incremental new customer today, and it will cost you an incremental $25 of profit to acquire a new customer in this new scenario, well, you know exactly how much money you need to ask for to make this happen, right?!
That's how we use Forecast Forensics in combination with Digital Profiles. We instantly see what is required to grow the business. We, as analytical experts, guide our CEO, CFO, and CMO toward tangible, actionable solutions.
This is an analytics system, a Segmentation/Forecasting system, that yields actionable outcomes.