What Now? Q2 Suggestions For The CMO

Over the past few months, the weather in Eastern Massachusetts has been remarkable; snow, (not too much) cold, record setting rain, record setting high temperatures, sun (a rarity in late March/April)…in other words typical New England weather.

Which seems to parallel the sales of many companies…slam-dunk sales haven’t occurred, “bluebirds” have landed, old products have continued beyond expectation, some new products are winners, some are losers.

In other words, for the CMO who follows trends and patterns, there is no trend or pattern.  Dick does a good job of discussing forecasting here, but regardless of the forecasting process used, tracking YTD results against plan, and then using that data to forecast the balance of the year is a high-stakes gamble – worse than trying to forecast New England weather.

Here are some suggestions for the CMO to help resolve this problem:

  1. In all likelihood the end-user buyer or distribution channel follows the Pareto principle, i.e., 80% of the sales come from 20% of the group.  As CMO, talk to that 20% and find out what they are planning to do.   Don’t delegate this task, and focus on 3-5 points you want to cover.  A pattern/consensus is likely to emerge.  Trust it, and use the data from the 20% plus the other 80% to forecast the balance of the year.
  2. Extrapolate Q1 results for the balance of the year, adjusting for the quarterly splits that have historically fit your company.  Then increase/decrease the total by 10% for 20% variance in total year results.  Compare these numbers with the number derived from checking with the top 20% – #1 above.
  3. Assume the worst, and that sales will decrease 20-30% in the second half. (Ignore any quarterly splits.)  Add that number to what you did in Q1 and what you are going to do in Q2 (You should have a 90% confidence level on that number by now.)  See how this lower number differs from the low number in # 2.
  4. If you have a good estimate on the total size of your market, the Y-T-Y growth and your share, estimate the total year results, calculate your share and then add/subtract 10%.  Compare these numbers with the ones generated in #2.

These quick “back-of-the-envelope” exercises are sufficient to use for adjusting your plans and programs.  Spending more time looking for additional or more detailed information will delay decisions and burn needed resources, and most likely won’t provide any better data.

The key is what to do if the numbers show that you are going to miss the plan by 10% or more?  Now is the time to implement or change plans to fill the pipeline, shooting for significant closings in Q3, especially September.  To be cost effective, you have to know what has worked for you thus far, and how those lead generation programs can be expanded and enhanced in the next 8 – 12 weeks.

If you don’t know what worked, or if nothing worked, make this one of the questions you ask of the key 20%.   If the data shows that podcasts, blogs and tweets work to generate leads, and you are planning breakfast meet-and-greats, Trade Shows and print advertising, now is the time to change your mix and move to Plan B.

On the other hand, if the numbers show that you are going to “knock the cover off the ball” keep doing what you are doing, and begin thinking how to capitalize on it in 2011.

If you assume that no purchase decisions are made in August, you have 10 weeks to generate leads and close sales in July, 14+ weeks to for September.  New Englanders often leave the house with an umbrella on a sunny day.  Do you have your plans in place, and can you implement them, in case the forecast suggests you have to change what you are doing?

Related Posts

2010 – The First Milestone   https://firealarmmarketing.com/2010/04/01/2010-the-first-milestone/

Guide for the CMO in Planning 2010  https://firealarmmarketing.com/2009/10/29/guide-for-the-cmo-in-planning-2010/

RHM – 4/15/2010

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