Brand Metrics

Session - 1

- Gaurav Nigam
Brand Metrics

• Brand Metrics are units of measurement that determine how strong or

weak a brand is relative to its impact on driving the business goals
• Categories of Brand Metrics
• Behavior metrics – what employees do to build/promote brand
E.g.: Employees understanding of the strategy
• Interaction metrics – how customers interact with the brand
E.g.: Awareness, Consideration, Web Traffic etc
• Perception metrics – perception resulting from the interactions
E.g.: Customer Satisfaction, Positive Associations
• Performance metrics – the resulting business impact based on perceptions and
interactions
E.g.: Lead Generation, Market Share
Importance of Brand Metrics

• Brand Metrics are important because

▫ They act as diagnostic, predictive and prescriptive tools to help managers
understand whether the brand is on track relative to its positioning, and its impact
on the business
▫ Only when you know how your brand is perceived, the corrective actions can be
taken
▫ The brand can be better aligned to the business objectives
▫ Provides visibility about which marketing efforts are paying more returns

https://study.com/academy/lesson/what-is-brand-equity-definition-components-measurement.html - animation
Brand Valuation Methodologies
 Income based brand valuation methods

•Relief from royalty method: this brand valuation method is based on how much the
brand owner would have to pay to use its brand if it licensed the brand from a third
party. It uses discounted cash flow analysis (DCF) to capitalize future branded cash flows

•Excess-earnings method: this brand valuation methodology calculates the earnings

above the profits required to attract an investor – which uses the estimated rate of return
based on the current value of the assets employed. These excess earnings are assumed to
be attributable to the intellectual property, or brand.

•Price premium method: this brand valuation method is based on a capitalisation of

future profit stream premiums attributable to a business’ brand above the revenues of a
generic business, without a brand.

•Capitalisation of historic profits method: the brand valuation method is based on the
capitalisation of profits earned by the brand.
 Market based brand valuation methods

•P/E ratios method: the P/E (price to earnings) brand valuation method multiples the
brand’s profits by a multiple derived from similar transactions of profits to price paid
based on the value of reported brand values.

•Turnover multiples method: this brand valuation method multiplies the brand’s
turnover by a multiple derived from similar transactions.
 Cost based brand valuation methods

•Creation costs method: this brand valuation methodology estimates the amount that has
been invested in creating the brand.

•Replacement value method: this brand valuation method estimates the investment
required to build a brand with a similar market position and share.
 Why do we do Brand Valuation

 Valuing brands for financial reporting

 Valuing brands for disputes such as partnership, licensing, trademark disputes or litigation
support
 Valuing brands to help influence strategy
 Valuing brands to monitor return on investment and assist in the allocation of resource
 Valuing brands to raise finance & for liquidation
 Valuing brands when they’re insolvent or in administration
 Valuing brands for M&A
 Valuing brands for taxation planning and compliance
 Valuing brands to be used as security or collateral
 Valuing brands for Investor's presentation/ Shareholder's report
Who is India’s No.1 celebrity in terms
of Brand value?
 FORMULARY APPROACH

Interbrand is a brand consultancy firm, specializing in areas such as brand strategy, brand
analytics, brand valuation, etc. It determines the earning from the brand and capitalizes
them by making suitable adjustments. (Keller, 1998) The firm bases its brand valuation on
financial analysis, role of the brand and brand strength.

The firm attempts at determination of brand earnings by means of using a brand index
which is based on 7 factors namely –leadership, internationalization/geography, stability,
market, trend, support and protection in the descending order of weightage. This approach
is popular and widely appreciated because of its ability to take all aspects of branding into
account.
Brand Valuation Model
[Interbrand]
• Measure is designed to separate tangible product value from intangible brand value
• A figure for earnings associated with the brand is isolated by removing estimated
earnings attributable to tangible assets from total earnings.
• Brand Earnings = Total Earnings – Earnings from Tangible Assets.

https://www.youtube.com/watch?v=tK2ozWQ0HA4 - Interbrand
Brand Valuation Model
[Interbrand]
 FORMULARY APPROACH

The Financial World magazine method utilizes the “brand index”, comprising the same
seven factors and weightings. The premium profit attributable to the brand is calculated
differently. This premium is determined by estimating the operating profit attributable to a
brand, and then deducting the earnings of a comparable unbranded product from this.
Brand Equity Index [by Moran]
• Marketing executive Bill Moran has derived on index of brand equity as the product of
three factors
▫ Effective market share
▫ Relative price
▫ Durability
Brand Equity Index
= Effective market Share(%)*Relative price($)*Durability(%)

Effective market share:

It is the equal to the share of a market segment, weighted by that segment’s percentage of
brand sales.
Relative price :
Price of your product, divided by average price of all products
Durability:
Percentage of repeat customers, year over year
Numerical
ILLI is a tonic drink that focuses on two geographic markets – eastern and western
US metropolitan areas. In its western market, which represents 60% of ILLI’s sales,
the drink has a 30% share of the market. In the eastern market, ILLI has a 50%
share of the market.
Effective market share is equal to the shares of the segments, weighted by the
percentages of brand sales.
West = 30% * 60% = 0.18
East = 50% * 40% = 0.20
Effective market share = 0.38
Half of the people who purchase ILLI this year are expected to repeat next
year, generating a loyalty index of 0.5. The average price for tonic drinks in the
market is $2.00, but ILLI enjoys a slight premium. It generally sells for $2.50. This
yields a relative price of $2.50/$2.00, or $1.25.
Brand equity = Effective market share * Relative price * loyalty index
= 0.38 * 1.25 * 0.5
= 0.2375
 FORMULARY APPROACH

Aaker stated that the Brand Equity Ten Method measures brand equity through
5 dimensions – loyalty, perceived quality or leadership measures, other
customer oriented association or differentiation measure like brand
personality, awareness measures and market behavior measures like market
share, market price and distribution coverage. Brand Equity ten, thus, looks at
the customer loyalty dimension of brand equity and the measures to create a
measurement instrument.
Aaker‘s Brand Equity Model
Aaker defines brand equity as the set of brand assets and liabilities linked to
the brand – its name and symbols – that adds value to, or subtract value from,
a product or service.
Aaker‘s Brand Equity Model
Brand Asset Valuator
[Young & Rubicam]
The BAV involves surveys of consumers regarding their
beliefs and attitudes concerning brands.
It is one of the most extensive brand research programs
ever done.
• 100,000 consumers across 32 countries have been
interviewed
• Information on more than 13,000 brands has been
collected providing up to 56 different scales and
dimensions of consumer perception.

According to the BAV model, brand health and future of

any brand can be determined by collecting consumer
insights in four key areas listed below
1. Differentiation
2. Relevance
3. Esteem
4. Knowledge
Brand Asset Valuator
[Young & Rubicam]
Differentiation:
• Has your brand attracted consumer’s attention more than your competitors?
• When customers come across the brand if they recognize your brand
• how different it is from your competitors

Relevance:
• How appropriate your brand is for your consumers?
• Is your product relevant to consumers in regards to price, convenience, and
fulfilling their needs?
• You can determine your brand’s relevance by asking consumers how likely they
would be to purchase your product or service, regardless of whether or not they
have purchased your product or service in the past
Brand Asset Valuator [Young &
Rubicam]
Esteem:
• Esteem is the perceived quality and customer perceptions about growing popularity of a
brand.
• Does the brand keep its assurances?
• The customer’s response to a marketers’ brand building activity is driven by his
perception of two factors; quality and popularity

Knowledge:
• Knowledge measures the extent of the customer’s awareness of the brand and
understanding of its identity
• The awareness levels about the brand and what it stands for shows the familiarity that
consumers share with the brand.

https://www.youtube.com/watch?v=1vRx5TYTmYs– ROI
Differentiation and Relevance combine to determine Brand Strength which indicates brand’s
future value.
Esteem and Knowledge together create Brand Stature, which is more of a report on past
performance.
 FORMULARY APPROACH

Brand Finance Ltd. is a UK based consulting organization which undertakes

brand valuation by means of identifying the position of the brand in the
competitive marketplace, the total business earnings from the brand, the
added value of total earnings attributed specifically to the brand and beta
risk factor associated with the earnings. On the value so obtained, it
discounts the brand added value after tax at a rate that reflects the brand
risk profile.
Brand Strength Factors
Customer Lifetime Value

• Customer lifetime value (CLV) is a metric that

represents the total net profit a company makes
from any given customer.
• CLV is a projection to estimate a customer's
monetary worth to a business after factoring in
the value of the relationship with a customer
over time.
• CLV is an important metric for determining how
much money a company wants to spend on
acquiring new customers and how much repeat
business a company can expect from certain
consumers.
• CLV is calculated by subtracting the cost of
acquiring and serving a customer from the
revenue gained from the customer and takes
into account statistics such as customer
expenditures per visit, the total number of visits
and then can be broken down to figure out the
average customer value by week, year, etc.
Numerical

Let's say that the value of an average order at your business is $50. Also, anytime
someone makes an order, whether it's their first or their third, they have a 10% chance
of coming back and making a repeat purchase. Finally, let's assume that it costs you
$15 to acquire each new customer.

The total revenue you can expect to get from each customer is your average order
value divided by one minus the repeat purchase rate, or
$50 / (1 - 0.1) = $55.56.
Subtract your customer acquisition cost from that, and you get a customer lifetime
value of $40.56.
Conjoint Utilities and Consumer
Preferences
• A method of estimating customers by assessing the overall preferences customers
assign to alternative choices.
• Conjoint utilities measure consumer preference for an attribute level and then – by
combining the valuations of multiple attributes – measure preference for an overall
choice
• Measures are generally made on an individual basis, although this analysis can also
be performed on a segment level.
• Conjoint analysis can be useful in determining what customers really want

https://www.youtube.com/watch?v=kV9Deg1SJ1s – you ad impact

Measure Launch Performance
Return-on-Objectives (ROO) Approach

Marketers often measure launch performance by working right to left, using easily measurable volume/transactional
metrics to track launch success – with tenuous links to financial outcomes.

Metrics-to-Outcomes Financial Volume/

Strategic Objective(s)
Chain Outcomes
• Sales • Share-of-wallet
• Profits • Customer advocacy
• Exploit new technology
• Sell in new geography
Transactional Metrics
• Average deal size
• Referrals
• Web Traffic
• Leads; lead conversion

1 2

Instead, identify objectives that key stakeholders have Then, work left to right to connect the
“pre-agreed” correlate to, and ideally cause, positive strategic objectives to actual metrics
financial outcomes.

49
© 2014 The Corporate Executive Board Company. All Rights Reserved.
Metrics Selection Sheet
Instructions: The list of metrics below helps marketers select the transactional metrics to populate their ROO success
measurement model. The metrics listed below are the more common ones, and a comprehensive list is available to view
via links at the bottom of the page.

Awareness and
Channel Management or Financial
Acquisition
Retention

• % of target customers • Repurchase • Revenue

aware of new product • Referrals • Margins
concept • Cross-sell ratio • Unit sales
• % of target customers who • Mentions of product • Unit sales as a % of market
buy product experience across sales
• Mentions of new products prioritized social media • Market share
across prioritized social • Sales per channel • Product revenue as % of
media channels • Profit per channel total revenue
• Lead conversion • Increase in sales per • Deal size
• Web traffic channel • Deal volume

Demand Generation Share of Wallet Advocacy

• Lead generation rate • Share of wallet % • Content sharing

• Cost per lead generated • Customer lifetime value • Net promoter score
• Unique Visitors • Prospect lifetime value • Referrals
• Registered users • Customer profitability
• Click through rate

• Compendium of Performance Metrics

CEB Marketing Leadership Council
• Dashboard Metrics Option List
50
© 2014 The Corporate Executive Board Company. All Rights Reserved.
Objectives-to-Metrics
Tagging Sheet

How and When to Use This Tool: Refer to your notes from slide 1 of the Product Launch Objective-Setting Tool to populate
the first and second column in the table below. Use the ROO approach described on slide 1 to determine which metrics will
best monitor launch performance. Some metrics are outlined on slide 2, but these are likely to differ company-by-company.

Product :

Financial Target Strategic Objective(s) Metrics

1) • Measure 1
• Measure 2
• Measure 3

2)

CEB Marketing Leadership Council

51
© 2014 The Corporate Executive Board Company. All Rights Reserved.
 Metrics measure marketing's impact on business

A Five-Point Continuum

52
© 2014 The Corporate Executive Board Company. All Rights Reserved.
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 TOP 3 LINKEDIN Company page impact metrics

Metric Description

Page Reach Number of unique visitors to your LinkedIn

Company Page

Engagement Number of user interaction instances with the

LinkedIn Company Page

Actions Number of recommendations, job applications

or completion of specified actions (e.g.
documents downloaded, forms filled etc.)
resulting from your LinkedIn Company Page

56
© 2014 The Corporate Executive Board Company. All Rights Reserved.
Let’s play KBC
Quiz
What is brand equity?
• Marketer attitudes about positive brand attributes and favorable consequences of brand use.
• Consumer attitudes about negative brand attributes and unfavorable consequences of brand use.
• Consumer attitudes about positive brand attributes and favorable consequences of brand use.
• Marketer attitudes about negative brand attributes and unfavorable consequences of brand use.
What is an advantage of positive brand equity?
• Consumers are already aware of the positive aspects of the brand with little or no need for
further awareness promotion.
• The company can ask for a premium price for its brand.
• It provides the company an opportunity to expand its product line.
• All of the answers are correct.
How is the term metrics best defined?
• Process of Measuring
• A Benchmark
• A Standard of Measurement
• All of the Above
Quiz
What is brand equity?
• Marketer attitudes about positive brand attributes and favorable consequences of brand use.
• Consumer attitudes about negative brand attributes and unfavorable consequences of brand use.
• Consumer attitudes about positive brand attributes and favorable consequences of brand use.
• Marketer attitudes about negative brand attributes and unfavorable consequences of brand use.
What is an advantage of positive brand equity?
• Consumers are already aware of the positive aspects of the brand with little or no need for
further awareness promotion.
• The company can ask for a premium price for its brand.
• It provides the company an opportunity to expand its product line.
• All of the answers are correct.
How is the term metrics best defined?
• Process of Measuring
• A Benchmark
• A Standard of Measurement
• All of the Above
Quiz
Which of these statements is a an outcome-based marketing objective?
• Run six half-page ads in PCWeek
• Revise online demo
• Send email blasts to prospects every month
• Increase share of wallet of existing tier-one customers by 10% before August 30th

Which of the following is NOT an outcome-based metric category?

• Monetization | Cost | Penetration | Acquisition

What are the four components of brand equity?

• Brand recognition, brand experience, brand preference, and brand persona.

• Brand recognition, brand experience, brand preference, and brand loyalty.
• Brand religion, brand expertise, brand prevarication, and brand longevity.
• Brand recognition, band experience, brand prevarication, and brandy loyalty.
Quiz
Which of these statements is a an outcome-based marketing objective?
• Run six half-page ads in PCWeek
• Revise online demo
• Send email blasts to prospects every month
• Increase share of wallet of existing tier-one customers by 10% before August 30th

Which of the following is NOT an outcome-based metric category?

• Monetization | Cost | Penetration | Acquisition

What are the four components of brand equity?

• Brand recognition, brand experience, brand preference, and brand persona.

• Brand recognition, brand experience, brand preference, and brand loyalty.
• Brand religion, brand expertise, brand prevarication, and brand longevity.
• Brand recognition, band experience, brand prevarication, and brandy loyalty.
Quiz
Which of the following best defines an outcome based metric?
• one that is tied to counting the results of marketing programs
• one that links marketing results to business results
• one that is tied to measuring marketing payback and efficiency
• one that provides insight into strategic direction
What three quantifiable elements should be included in every metric?
• Time and Cost and Quality
• Cost and Risk and Time to implement
• Staff requirement and outside resource requirements and office space requirements
• None of the Above
When you don't have visibility into the pipeline, what are two revenue related metrics you can
track to assess marketing's financial impact?
• Purchase consideration and purchase recommendation
• Awareness and brand equity
• Web site hits and click through
Quiz
Which of the following best defines an outcome based metric?
• one that is tied to counting the results of marketing programs
• one that links marketing results to business results
• one that is tied to measuring marketing payback and efficiency
• one that provides insight into strategic direction
What three quantifiable elements should be included in every metric?
• Time and Cost and Quality
• Cost and Risk and Time to implement
• Staff requirement and outside resource requirements and office space requirements
• None of the Above
When you don't have visibility into the pipeline, what are two revenue related metrics you can
track to assess marketing's financial impact?
• Purchase consideration and purchase recommendation
• Awareness and brand equity
• Web site hits and click through
Quiz
Measuring customer quality of experience (QoE), is a good metric for measuring customer
retention.
• True
• False
Which of the following statements best reflect the value of outcome-based metrics?
• They enable marketers to focus on efforts with the greatest impact and contribution to the
company's valuation
• They enable marketers to more effectively count the results of campaigns
• They enable marketers to better predict the outcomes of a marketing program
At a minimum, for which of the following should a marketer establish metrics and track against?
• Customer satisfaction, customer acquisition and market share
• Profitability, market share and share of wallet
• Cost per lead, share of wallet, recency of purchase and average sales price
• Cost per lead, cost per customer, recency of purchase, average sales price, market share and
share of wallet
Quiz
Measuring customer quality of experience (QoE), is a good metric for measuring customer
retention.
• True
• False
Which of the following statements best reflect the value of outcome-based metrics?
• They enable marketers to focus on efforts with the greatest impact and contribution to the
company's valuation
• They enable marketers to more effectively count the results of campaigns
• They enable marketers to better predict the outcomes of a marketing program
At a minimum, for which of the following should a marketer establish metrics and track against?
• Customer satisfaction, customer acquisition and market share
• Profitability, market share and share of wallet
• Cost per lead, share of wallet, recency of purchase and average sales price
• Cost per lead, cost per customer, recency of purchase, average sales price, market share
and share of wallet
Quiz
In the list below, which is NOT one of the five most common metrics used to track brand effectiveness?
• Perceived Quality Ratio
• Ability to Influence the Market
• Size/Loyalty of Franchise
• Ability to Sustain Demand in the Face of Change
• Ability to Acquire New Customers
• The Ability to Generate Favorable Publicity in the Media
Which of the following is the best way to measure customer retention?
• Customer Advocacy
• Customer Satisfaction
• Customer Profitability
• All
• None of the Above
Quiz
In the list below, which is NOT one of the five most common metrics used to track brand effectiveness?
• Perceived Quality Ratio
• Ability to Influence the Market
• Size/Loyalty of Franchise
• Ability to Sustain Demand in the Face of Change
• Ability to Acquire New Customers
• The Ability to Generate Favorable Publicity in the Media

Which of the following is the best way to measure customer retention?

• Customer Advocacy
• Customer Satisfaction
• Customer Profitability
• All
• None of the Above
Quiz
What should marketing metrics support?
• Your website
• Company outcomes
• Sales processes
• A CRM system
Which of the following outcome-based metrics should every marketer track?
• Share of preference, rate of customer acquisition, share of wallet, recency and frequency of
purchase, price premium, customer advocacy
• Awareness, time to market, customer satisfaction, rate of customer acquisition, cost per lead,
brand equity
• Awareness, share of preference, rate of product adoption, cost per lead, customer satisfaction
• Rate of customer acquisition, share of wallet, time to market, cost per lead, customer
advocacy, price premium
Which of the following is the best metric for measuring product success?
• Time to Revenue
• Time to Market
• Rate of product adoption
Quiz
What should marketing metrics support?
• Your website
• Company outcomes
• Sales processes
• A CRM system
Which of the following outcome-based metrics should every marketer track?
• Share of preference, rate of customer acquisition, share of wallet, recency and frequency
of purchase, price premium, customer advocacy
• Awareness, time to market, customer satisfaction, rate of customer acquisition, cost per lead,
brand equity
• Awareness, share of preference, rate of product adoption, cost per lead, customer satisfaction
• Rate of customer acquisition, share of wallet, time to market, cost per lead, customer
advocacy, price premium
Which of the following is the best metric for measuring product success?
• Time to Revenue
• Time to Market
• Rate of product adoption
Quiz
A marketing executive dashboard should include which of the following metrics categories:
• Search engine optimization results, website metrics, new business metrics
• Competitive metrics, customer value metrics, website metrics
• New business metrics, competitive metrics, customer value metrics, product innovation
metrics
• None of the above is the right combination.
Companies with a formal and comprehensive marketing performance management system
outperform companies who don't on which of the following:
• Sales growth
• Market share
• Profitability
• All of the Above
• None of the Above
Quiz
A marketing executive dashboard should include which of the following metrics categories:
• Search engine optimization results, website metrics, new business metrics
• Competitive metrics, customer value metrics, website metrics
• New business metrics, competitive metrics, customer value metrics, product innovation
metrics
• None of the above is the right combination.
Companies with a formal and comprehensive marketing performance management system
outperform companies who don't on which of the following:
• Sales growth
• Market share
• Profitability
• All of the Above
• None of the Above
Measuring RoI in New age
marketing
A Research Study
Activity Topics
1. Zolo stays is all about co-living spaces. You are the head of business development and you have
been asked to open the operations at Kota, Rajasthan. What are the top 3 metrics you will choose
and what will be your timelines for first phase of expansion
2. Anil Agarwal of Vedanta group has stated that Indian PSUs should be given free hand and
independent board for a turnaround. What metrics in that case a PSU like GAIL would choose to be
excel in its sector
3. Web series and listicles are getting immensely popular these days on various digital platforms. What
are the Top 3 metrics which the producers of these shows must be considering in order to gauge the
success of their shows and why.
4. Do you think an NGO into sustainability or CSR like Goonj would also require brand promotions. If
yes, what would be the key metrics it needs to set to gauge the brand awareness
5. You are the head of Ecommerce start-ups into food delivery. To beat the competition you will have
to give heavy discounts yet stay exclusive to high spending customers. Pls suggest brand metrics to
consider
6. Airlines industry is under a severe pressure for capacity utilization and handling the passenger rush
during festive time. Suggest an apt brand metrics for them to enhance their brand reputation which
leads into higher sales?
Activity Topics
7. Coaching institutes like Byju’s and Aakash are redefining their training and education space for
competitive exams. What are the key indicators they need to zero in so that parents of the students
subscribe to their brands?
8. Reliance JIO triggered a reduction in the telecom sector by offering voice and data services at very
low tariffs. What should be the right parameters the brand should adopt to the sustainable and yet
popular in a space of 3years?
9. You are the CMO of ALT Balaji which is gaining momentum for their bold and unconventional
content in the digital space. What are the parameters for such a production house to consider to
operate in a segment which has no overlap with comedy and family drama?
10. Practo is an app which gives access to the network of doctors besides helping you schedule
appointments with them. Kindly suggest top 3 metrics so that more doctors associate with your
network and get listed on your app?
11. If an international client has to select between any of these 3 Indian IT technology companies
(TCS, Wipro, Infosys) to work with , then what may be the brand parameters in their mind for
selecting the player?
12. A fertilizer brand and a luxury car maker simultaneously launch themselves into Gujarat market in
may 2019, How will their brand metrics differ for the same market?
Brand Metrics

Session - 2

- Gaurav Nigam
Major Sales
Forecasting
Methods
Economic Indicator’s Analysis Method

Econometric Model Building Method

This method of sales forecasting is used by companies

of durable products like refrigerators, T.V.s, washing
machines, fans, etc.
It presents a real world situation and solves the
problems with a formula –
S=R+N
S = Total Sales; R = Replacement Demand and
N = New Owner Demand
 Statistical Analysis
(i) Time Series Analysis:
Here, past historical data is analyzed and arranged in systematic time series.
The following four types of sales variations are separately analyzed:
(a) Long-term trends (b) Business cyclical movements
(c) Seasonal variations (d) Irregular and casual fluctuation

(ii) Regression Analysis:

It measures the association between company sales and other variables. It involves fitting an
equation to explain sales fluctuations in terms of related and presumably casual variables.
3 major steps involved:
(a) Identify variables casually related to company sales.
(b) Determine or estimate the values of these variables related sales.
(c) Derive the sales forecast from these units.
 Quantitative Methods
i. Moving Average Method:
The method suggests drawing an average of the sales of a number of years to predict the sales of
a coming period. The objective is to smooth out the fluctuations and provide a close estimate of
the forecasted sales.
So, the sales of the preceding
three years are considered to
forecast the sales of the year of
interest. This is a very simple
method and the calculation for
this is easy too. When the market
is stable for a considerable period
of time, it gives an accurate
estimate of sales.
 Quantitative Methods
ii. Exponential Smoothing Method:
In moving average, the sales of previous years are given equal importance but in exponential smoothing,
the recent past sales are given more weight than the earlier pasts. The objective is to smooth out
fluctuations in the time series for accurate estimation of sales forecast.
The general equation of exponential smoothing is as follows:
Next year’s sales = a (this year’s sales) + (1-a) (this year’s forecasts)
Where, a is a constant, and is called the smoothing constant or weight for the current year’s sales
where , (1 -a) = Weight for the immediate preceding year.
If a =1, then, the forecasted sales is equal to sales of the current year. If a = 0, then current year’s
forecast is equal to next year’s forecast. No adjustment is needed.
The range of the value of ‘a’ is from 0 to 1. For practical reasons, the value of a is chosen between 0.1 to
0.4. Similarly, the observations for the preceding second year, third year, etc. may be considered.

Numerical:
Sales Category Method
Opportunity Stage Method
Length-of-Sales-Cycle Method
Lead Scoring Method
Lead Source Method
The distinction between sales productivity, efficiency, and
effectiveness are precise however crucial:

•Sales productiveness is boosted with enhanced efficiency and

effectiveness.
•Efficiency is comparatively simple to improve due to the fact it's
far frequently just a re-allocation of cutting-edge salesperson
effort.
•Effectiveness can be plenty harder as it requires enhanced
salespersons potential.
 A Simple Definition of Sales Effectiveness

Sales team effectiveness = average output per salesperson, where output is aligned with
company strategy.
Thus, “output” might be “profit,” “revenue,” or “sales of new product line,” based on
company strategy.
This simple definition makes it possible to measure effectiveness over time, and thereby
determine the impact of actions taken to improve effectiveness.

Some commonly used measurements:

• Effectiveness per territory, product, etc.
• Effectiveness at each stage of the process
• Effectiveness based on tenure
• Individual effectiveness against the average
• Impact of investments on effectiveness
They measure effectiveness
against EBITDA, and claim that in
many cases, a mere 20% of the
sales force is delivering 100% of
the EBITDA.
Further, they say, the bottom
20% of the sales force is actually
giving back 20% of EBITDA,
forcing the 80% number that is
commonly cited.
 Return on Marketing Investment (ROMI)

The Return on Marketing Investment shows how much profit results from investing in marketing.

Numerical
Promotional
Lift
3 metrics can be used for promotional lift calculations:

1.Conversion rate without promotions.

2.Engaged conversion rate with the promotion.
3.The percent change between those two numbers.

1. Conversion rate (CVR).

Conversion Rate (CVR) refers to the percentage of visitors to a website who resulted in a sale.

2. Engaged conversion rate (CVR).

Engaged Conversion Rate (Engaged CVR) is referring to exactly that, the percentage of on-site
visitors who interacted with a promotion and completed a purchase.

3. Calculate percent change of CVR vs engaged CVR.

The % Change effectively is the difference between a normal visitor’s rate of conversion as
opposed to the rate of conversion of a visitor who interacts (engages) with a promotion.
Promotional Effectiveness
Email Capture Overview by Industry
& Lift Benchmarks
Analyzing The Overall Lift Of A Retail Promotion
Lift in Promoted Item Sales:
This is the difference between when the item was promoted, and its relative baseline.

Halo:
The Halo effect occurs when promoting one item influences us to purchase another
item. For example a week prior to IPL, your favorite grocery chain decides to promote
Pepsi. That in turn influences you to buy a bag of Lays. This would be considered the halo
effect of promoting Pepsi, the purchase decision spills over from the beverages category
to snacks. This seems intuitive, but you may be asking yourself, well how can we
determine that the sales of one item influences another?
Cannibalization :
Cannibalization in promotional performance analysis is defined as a promoted item
increasing its own sales but, decreasing the sale of another item in the same category that
was not promoted. This happens quite often when you have two competing commodity
brands with the same quality, and the consumer is indifferent about using one over
another. Let’s take two diaper brands; Pampers and Huggies as an example, if one brand
goes on sale, and the consumer is indifferent about using one over the other, they will
purchase the promoted brand. This in turn will cannibalize the sales of the other brand
and cause it to drop. So how do you go about measuring the impact of cannibalization?
Pull Forward:
This is something Hi-Lo retailers are not always considering but it has significant effect on
an item and categories sales over time. The pull-forward effect occurs when consumers
see a price of a commodity they regularly purchase, which has a long shelf life (i.e.
detergent) go on promotion. When the item goes on promotion, the consumer tends to
buy a significantly larger volume than they usually purchase.
Activity

1) You are Nescafe and you have to launch an instant coffee variant into NE
market. Kindly suggest the top 2 Sales forecasting techniques and their
reasons.
What promotions will you plan and do you a high promotional lift can be
achieved in first 6 months of the launch.

1) 2) You are Unacademy (an EdTech company) and you aiming at the
middle school student segment (class 5th-8th). Kindly suggest the top 2
Sales forecasting techniques and their reasons.
What promotions will you plan and do you a high promotional lift can be
achieved in first 6 months of the launch.
Name: Gaurav Nigam; e mail: gauravnigam0522@gmail.com