April 16, 2017

Forecasting - Knowing The Future

We are going to spend some time discussing the future?


Here's why ... when I attend a conference, professionals tell me that various tactics aren't working anymore. Especially customer acquisition tactics.
  • "The co-ops don't work anymore, performance is down 15% per year for each of the past three years."
  • "Our stores are not generating new customers."
  • "Google and Facebook have become too expensive. What should I do?"
I wait ... patiently anticipating "the hammer" ...
  • "We have to cut back on marketing expense in an effort to optimize performance".
That's where I feel sad. I'll ask a simple question ...
  • "What happens to your business in 2-5 years if you cut back today to 'optimize' performance?"
The answer is almost always the same ...
  • "I don't know."
The reason we receive a reasonable salary plus health benefits plus 401K and five weeks of paid time off is because it is our job to know what will happen in the future. Yes. It is OUR job.

Have you ever used Google Analytics to produce a five year forecast of where your business is likely to head if you have to cut back on paid search spend by 30%? Or Adobe/Omniture? Or IBM/Coremetrics? Do you use "R" to produce a five year forecast based on paid search spend changes?

The forecasting discipline has been utterly abandoned in our world of "digital" analytics.

So let's spend some time talking about why it is critical to forecast where your business is headed, given your merchandising and marketing tactics, ok?

And keep this sentence in mind as we progress ...
  • "Forecasting outcomes are the sum of all analytics and marketing knowledge possessed by your company."
In other words, if you don't have a five year forecast for your business, you don't have enough analytics/marketing knowledge.

More on the topic tomorrow.

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