The Most Expensive Phrase in Business: “We’ve Always Done It This Way” – Part Two

Posted December 5, 2019

The Most Expensive Phrase in Business: “We’ve Always Done It This Way” – Part Two

Posted December 5, 2019

In the first post, we presented examples of how doing things the way we’ve always done them in business can cause marketers to overlook important aspects of their campaign strategy, misinterpret results and sacrifice true revenue potential. (Read up on it here: WADITW: Non-Branded Search)

[Part Two] WADITW: Growth Forecasting

The end of your financial year is creeping in and you receive that very predictable email from finance: “Can you please submit your forecast for next fiscal?” Now realistically, you expect your company to finish +2% this year, but we all know too well what you are expected to put as your number for next year:  +10% growth!

Why? Because your company has always done it this way.

Far too often we work with clients where financial goals are not supported with historical data. In an age where data visibility is becoming the norm, many companies are stilling tying on the blindfold and throwing darts when it comes to making financial predictions.  Our team would be the first to admit that making financial predictions is not easy- but that does not mean we should drift into the deep end of putting a number on a spreadsheet that is not grounded by past performance.

Nobody enjoys the exercise of balancing a budget toward the end of the year due to wildly inaccurate forecasts. This causes havoc for both marketing and finance teams.

In fact, if you are willing to ask yourself the tough questions about your business before you reply to finance you might very well change your answer.

Have we ever grown the business by 10%? Well five years ago you did, what about that specific year do we think was different and how do we replicate that magic? If you are unsure-don’t predict 10% growth.

Do you need more marketing resources? Our SEM manager is telling us that we can spend 2x online and grow online sales. Are you able going to secure the funds in your business to do that? If not- don’t predict 10% growth.

Is the size of your active buyer file declining over the course of the past 12 months?  If so, then don’t predict 10% growth.

On the other hand, if you are in fact able to fund that budget recommendation from your SEM manager and put some predictive analytics in place that will help make your sales team more efficient, then maybe you do have a reason to forecast 10% growth after all!

Do you have accurate historical testing results that you can simulate rollout performance on for next year? If so, that should be baked into your forecast number as well.

The point is- all this data is available to us BEFORE we go ahead and submit our status quo forecast for the business. Yet we often ignore it. Why? Because predicting 10% growth is the way we have always done it.

Kevin Hope
VP | Intelligence + Analytics
khope@Anteriad.com

The 3rd and final installment of this blog series, WADITW: The Marketing and Creative Relationship focuses on the relationship between the marketing and creative departments and how incredible they become when they are in sync.

Catch the previous post in this series:
[Part One] WADITW: Non-Branded Search