August 09, 2021

Comp Segment Comes Into Play

Three years ago we spent a ton of time talking about Comp Segment and Comp New/Reactivated Analytics. In my Elite Program runs, all clients get to see how the Comp Segment framework impacts where their business is headed, going forward.

When Forecasting 2022, we need the Comp Segment framework to understand just how far off the COVID-bump we've fallen. Fall a long way? Next year's forecast looks dismal.

Let's look at this scenario for July:
  • July 2021 = $10.00.
  • July 2020 = $12.00.
  • July 2019 =   $9.00.
See what happened there?

Productivity in July 2021 is (10/12)-1 = -17% to July 2020. The COVID-bump is ending. However, productivity in July 2021 is (10/9)-1 = +11% to July 2019. The COVID-bump is NOT OVER ... YET. Productivity hasn't slumped to 2019 levels at this time. For next year, we would forecast rebuy/spend levels to (in total) be comparable to 2019 or up to 11% better than 2019. But in no way would we forecast 2020 levels ... those days are over.

This is the scenario I'm seeing lately:
  • July 2021 = $10.00.
  • July 2020 = $13.00.
  • July 2019 = $11.00.
This is trouble.

Productivity is (10/13)-1 = -23% to 2020.

Productivity is (10/11)-1 = -9% to 2019.

In this case, I'd use 2019 as my planning base, and I'd discount it by 9%. And if the trend is getting worse (i.e. -2% then -5% then -9%) I'd forecast maybe -12% to 2019.

Attention Catalogers:  You'll do this on top of paper cost increases and postage increases. You'd forecast a negative productivity situation on top of increasing costs. You know what that means, right? That means you're gonna have to take a hatchet to catalog circulation and then find new ways to drive volume.

Don't have the tools to do this stuff? Contact me now (kevin@minethatdata.com) and for just $4,900 I'll tell you what 2022 holds ... at this time.

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