Start Doing Powerful Marketing Analytics with Spreadsheets (Richard Petti) ProductCamp Boston may 2013


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Do you wonder where to start using powerful marketing analytics you’ve heard about?

We describe a half dozen marketing analysis case studies, with case studies, including: marketing programs effectiveness (a.k.a. marketing ROI), sales reporting and sales planning, product profitability analysis, customer profitability analysis, price elasticity analysis for one or several products, and sales commission planning. All the cases were done with spreadsheets without macros.

This presentation was delivered at ProductCamp Boston, May 4, 2013 by Richard Petti

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  • Marketing the biggest information crossroads in most businesses. (It is the function where products, selling, come financial considerations come together most intensely.)We might consider marketing as consisting of three main flows.Helping to specify the product, the market, and the fit between them (show in yellow in the diagram)Preparing the outbound messages and prices that are key ingredients in selling the products (shown in green in the diagram)Analyzing inbound information to guide the business: customer feedback, sales data, and general market and competitive information (shown in red in the diagram)
  • Let’s focus on presentation discusses five kinds of analytics that are useful in marketing and product management. Product and Customer ProfitabilityMarketing Program EffectivenessSales Reporting and AnalysisSales Planning/ForecastingPricing analysis For each type of analysis, we start with a real situation where the analytics contributed to improved performance. An appendix discusses three more types of analyses.Sales Commission planning Strategic analysis of investment projectsBug reportingAll these case studies were resolve using Excel.
  • As product line grows, even the most experienced senior managers have a limited view of where the profits come from.In most situations, it is relatively easy to allocate revenue to products. So the key challenge is to allocate costs to products.
  • Product profitability metrics are “contribution margins”. A contribution margin is the amount of money left over after some costs are deducted to cover remaining costs and profits. Most companies have widely varying profitability across products, as in the top graph. It is common that some products lose money, and management doesn’t know it. The bottom graph shows how revenue, expenses, and contribution margin vary over time for this company. We can use this kind of analysis to figure out why Product C has much lower profitability than Product A.
  • These charts break down costs and contribution margins for Products A and C from the previous slide. The key difference is that customer support is a small fraction of revenues for Product A and a large fraction of revenues for product C. This information can help you to fix the profitability of Product C.
  • This situation actually occurred in a company where I worked. Certain products had customer support costs that were so high they were losing money on the products.Furthermore, management did not know how these costs were affecting the profitability of the business.Read remaining bullets
  • Marketing Programs EffectivenessThere is an old line in marketing that goes, “Only half our marketing spending is effective; I just don’t know which half.” Most companies can’t measure effectiveness of marketing programs. This analysis takes on that challenge.Case situation: During a downturn, the VP of sales demanded more marketing program $. The president had little idea which programs were effective. Existing metrics credited all marketing programs with < 1% of revenue.Challenge & Solution: Allocate revenue to programs in a way that reflects revenue impact of each program. Give some credit to all programs that touched a customer before an order. Take into account program type, time lag between marketing touch and order. The customer is the customer decision network, not the person who attended an event or placed an order.
  • Case Outcome: Marketing program management and some product managers were thrilled; used metrics (and field feedback) to identify problems and opportunities. used metrics to evaluate programs.
  • Read slide.Now let’s examine some of the sales reports.
  • The new sales reports presented many views.• Revenue and sales units by thousands of segments, rollup up to company totals.• Trailing four-quarter reports eliminate seasonality and diminish the distortion of trends caused by random large orders • Installed base reports answered many questions about where the company’s products were used.• Product correlation reports quantified which products were purchased together in which market segments.• Application reports quantified use of each product in each major application area. • Customer reports showed how many of each product a customer owned and recently purchased.The new sales reports adjusted for the major factors that distorted trends in the regular reports.• Adjust for distributor pricing, exchange rates, and other regional pricing factors • Adjust for concurrent licenses that effectively serve more users (and cost more) than individual named user licenses.• Measure the effects of discounting, especially volume discounting by market segment.• Eliminate the effect of early payment of service contracts, which was large, and distorted trends.
  • Read slide.
  • Read slide.Extra under “Solution”: The key trick is to let the managers’ targets determine the larger segments, and use historical data for two purposes.First, historical trends provide a benchmark for managers to consider when setting their targets. Secondly, combining historical trends and managers’ targets for large segments yields reasonable forecasts for many small segments. For example, if management sets targets for the Japanese auto industry, and a minor product generated 0.1% of historical sales to this segment, then it is reasonable to assume that this tiny product will account for 0.1% of the sales next year. All this happens without human intervention.Of course, managers can directly forecast a small segment, if they wish.
  • Read slide.
  • Read slide.
  • Pricing decisions are too important to be made on a hunch.The best way to proceed is to do some pricing experiments and figure out how price sensitive various products are.If you have a thorough analysis, you can even get an estimate of what prices optimize revenue, or better, optimize profits.
  • Read slide.
  • We close with a few suggestions on how to be a good user of analytics.
  • Read main bullets.
  • This presentation discusses seven kinds of analytics that are useful in marketing and product management. Warm up: How many people currently use quantitative analysis? Strategic Evaluation of Investment ProjectsProduct ProfitabilityMarketing Program Contribution MarginsSales Reporting and AnalysisSales Planning/ForecastingPricing DecisionsBug TrackingFor each type of analysis, we start with a real situation where the analytics contributed to improved performance. You can see several common themes. Estimate ROI for innovations, ongoing products, in marketing programs.Sales-related analytics.The last topic is relevant to the interface with product development.We close with a few suggestions on how to be a good user of analytics.
  • A company with many business units generated about a dozen internal investment proposals per year. Many project champions felt the decision process as idiosyncratic. The company had a backlog of unevaluated project candidates.
  • Read slide.The essence of strategy is to match your strengths with environmental opportunities. This is the meaning of the so-called portfolio matrix. Their idea of a strategy opportunity matrix was new/old products x new/old markets.Now let’s look at the tool we used to analyze investment projects.
  • Here is the project evaluation template that substitutes for a business plan.The top section scores the projects on a more or less common framework. The two key concepts are market attractiveness market growth is usually the most important single factorAlso competitive intensity, appropriate market size. relative competitive strengthrelative market share is usually the most important single factorAlso strengths in products, technologies, distribution, supportThe descriptive comments at the bottom are very important. Scoring systems should always allow people to say more than a numerical score can capture.
  • This view is too compressed to read. The key points are thatmany factors are considered in scoring a projectthere is room for qualitative comments that contain more information than numerical scores.
  • A company with many business units generated about a dozen internal investment proposals per year. Many project champions felt the decision process as idiosyncratic. The company had a backlog of unevaluated project candidates.
  • Two of us are here today. I am Dick PettiAdrian Hancock is our VP of Marketing. Adrian, stand so people can see you.
  • Read main bullets.
  • You don’t need an expensive business intelligence system to do these kinds of analysis. In many situations you just need good spreadsheet models. My company, ModelSheet Software, specializes in making spreadsheet reports and analyses that easier to author, to maintain , and for users to understand and customize. Five of our spreadsheet applications are relevant to marketing analysis, three of which we discussed in this presentation.
  • ModelSheet has 3 offeringsCustomizable spreadsheets provide the convenience of prebuilt models, the flexibility of building your own models.We consult to extend our customizable spreadsheet models with features that clients want. We use ModelSheet Authoring to build our customizable models and to deliver unprecedented value on consulting engagements. You can access ModelSheet Authoring to build your own models.Together, these tools offer the ultimate in model expressiveness, flexibility, productivity, and collaboration for spreadsheets.
  • ModelSheet captures the firm’s knowledge and intellectual property in a more useful form.ModelSheet Authoring stores your I.P. as readable, executable formulas, and far fewer formulas than Excel. ModelSheet models are kept in a secure, accessible repository with versioning.Exported Excel workbooks display the readable formulas, but the formulas are not executable in Excel. ModelSheet provides these additional advantages over conventional spreadsheet models.Collaboration and Staff Turnover: From an organizational perspective, this comes with several benefits. Given the expressiveness of ModelSheet’s models, they are easy to collaborate with. In fact, several modelers can build a model together or a modeler can pass on an unfinished model to another. Since models use basic structures, plain English, and 10 to 100% fewer formulas, analysts can understand them quickly and confidently. With ModelSheet technology, there is no need to worry about losing key spreadsheet models when an employee leaves the organization.Auditing: Models are built using the Authoring tool and deployed on the Customizer they serve as a central repository of actionable knowledge across the organization. All audits and quality assurance can be done through Authoring before the models are made available firm-wide. When availed through the customizer, the spreadsheets come out well tested and are ready for use.Flexibility, Turnaround Time, Reliability: The ModelSheet Authoring and Customizer, together make spreadsheet modeling quick, easy and reliable. Modelers can efficiently deploy knowledge tools organization wide, and business users can confidently use them, and focus their efforts on decisions and actions, making them effective and productive.
  • Here is my contact information and places where you can get more information about ModelSheet Software.Thank you f or your attention.
  • Start Doing Powerful Marketing Analytics with Spreadsheets (Richard Petti) ProductCamp Boston may 2013

    1. 1. ModelSheet and the ModelSheet logo are registered trademarks of ModelSheet Software, LLC.Copyright © 2013 by ModelSheet Software, LLC1Quantitative Marketing Analysis:Information-Age Marketingand Product ManagementDick PettiModelSheet Software, LLC5/03/13
    2. 2. 2Effective use of information is an increasing sourceof advantage in non-information industries.“A supermarket is a business that sells food………..Or is it a business that exploits knowledge…about customer preferences, geographical biases, supply chain logistics,product life cycle, many kinds of sales informationto optimize its operations…delivery, inventory, pricing, product placement, promotionto grow and increase margin?The answer may determine your company’s long-termviability in the Information Age.”TopicsSource: Business Intelligence,by David Loshin, page 11
    3. 3. Information is the Life Blood of MarketingSalesMarketingMarketsandCustomersPromotionPrices & TermsCustomer FeedbackLeadsOrdersMarket InformationProducts & ServicesMessagingMarketingProgramsProductMarketingSales ContactsIndustryMarketingMarketResearchMarketingAnalysisI.T.DataDevelopmentCustomerSupportProductDevelopmentProductPlansTopics
    4. 4. Topics for TodayCommon Types of Marketing Analysis1. Product Profitability and Customer Profitability2. Marketing Program Contribution Margins3. Sales Reporting and Analysis4. Sales Planning/Forecasting5. Price Testing and Price ElasticityMore Marketing Analytics (if we have time)How to be a good user of analyticsTake Aways44. Sales Planning
    5. 5. 1. Product ProfitabilityCase situation– Executives need profitability metrics as number of products grows.Challenge & Solution: allocate expenses to products– Cost of goods– Costs of engineering, marketing, customer support.51. Product & Customer ProfitabilityTopics
    6. 6. Evaluate products by profitability over time6-30%-20%-10%0%10%20%30%40%50%60%Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010Product ContributionMargin%Product AProduct BProduct C0%10%20%30%40%50%60%70%80%90%100%Expense and Margin, Total Product LineContribution MarginSupportExpenseMarketing ExpenseEngineeringExpenseCost of Goods1. Product & Customer ProfitabilityTopics
    7. 7. Identify costs that depress marginsof individual products7($1,000,000)$0$1,000,000$2,000,000$3,000,000Expense and Margin, Product CContribution MarginSupportExpenseMarketing ExpenseEngineeringExpenseCost of Goods$0$5,000,000$10,000,000$15,000,000$20,000,000$25,000,000Expense and Margin, Product AContribution MarginSupportExpenseMarketing ExpenseEngineeringExpenseCost of Goods1. Product & Customer ProfitabilityTopics
    8. 8. Case OutcomeProduct Profitability …• Turned up “surprises”.– Products with hardware interfaces have high support costs.• Helped allocate resources to products.– Improved buy-in to resource decisions.• Singled out problems/opportunities to raise margins.– Examples: hardware interfaces, installation problems, help systems.81. Product & Customer ProfitabilityTopics
    9. 9. 2. Marketing Program EffectivenessCase situation– VP Sales demanded more program spending– Managers could not track effectiveness of so many programs.– Company had weak metrics for measuring marketing programs.Challenge– Estimate revenue impact of marketing programs.Solution– Allocate revenues to marketing programs sensibly.– Contribution margin = allocated revenue – allocated cost92. Marketing Programs EffectivenessTopics
    10. 10. 10Marketing Program AnalysisPgm Cluster (All) Cmpgn (All)Sector (All) Sales Tier (All)Pgm Bud Office (All) Acct Location FrancePgm Grp (Multiple Items) Acct Ind Grp AutoPgm Ind Grp (All) New/Old (All)Pgm Ind Fam (All) Opty/Order (All)Unprod_Ld? (All) Lead Qtr Q1Cmpgn Attend (All) Lead Yr 2005Pgm Family (All) Rev_Ev_Yr (All)Acct Region (All)DataPgm Type Pgm Sub-Type Pgm Win $ CM $ CM %Seminar Private Seminar FR - Paris - 2005Jan15 9,073 7,855 93.8%FR - Rouen - 2005Jan26 630 470 33.9%Private Seminar Total 9,703 8,325 85.8%Public Seminar FR- Platform Lille - 2005Mar12 330 337 96.9%Public Seminar Total 330 337 96.9%Seminar Total 10,033 8,662 86.4%Specify type oflead eventSpecify countryand industrySpecify year,quarter of eventMarketing program analysis shows leads,imputed revenue, contribution margin $ and %Program Eventwith very lowCM %All reports contain illustrative data2. Marketing Programs EffectivenessTopics
    11. 11. Case Outcome• Marketing programs managers used metrics to identify highand low payoff marketing programs.• Product managers used metrics to validate their bestprograms.• Caveat: Don’t rely marketing program (or product)profitability metrics alone:– Listen to people who are involved.– Consider strategic analysis of investment projects.112. Marketing Programs EffectivenessTopics
    12. 12. 3. Sales Reporting and AnalysisCase situation– Company tracked thousands of segments with complex interactions• 85 products, 30 countries, 20 industries, 6 applications, 4 license types …– Issues often resolved by anecdotes and speculation.– Complexity paralyzed common senseChallenge & Solution– Build reports that slice sales in many ways.– Deliver in a flexible exploration environment.– Adjust for distortions: seasonality, exchange rates, license options …– Develop data-backed answers to questions from business reviews.123. Sales Reporting and AnalysisTopics
    13. 13. Pivot reports provide overview and detail13Pivot Table of Revenue - High-Level OverviewRev-or-Units Rev D-Options (All) I Group (All)Rev Class (All) Region (All) I Family (All)P Family (All) Location-1 (All) Industry (All)Product (All) Location-2 (All) Prod Year (All)Options (All) Location-3 (All) Prod Mgr (All)DataProd Group 2001 2002 2003 2004 2005 GR 2002 GR 2003 GR 2004 GR 2005Platform A 67,604 74,819 77,709 91,393 106,008 10.7% 3.9% 17.6% 16.0%A Add-ons 51,201 58,882 60,367 75,570 92,199 15.0% 2.5% 25.2% 22.0%Platform B 29,595 34,960 36,084 42,127 46,444 18.1% 3.2% 16.7% 10.2%B Add-ons 36,605 45,287 48,162 62,487 70,518 23.7% 6.3% 29.7% 12.9%Grand Total 185,004 213,949 222,321 271,577 315,169 15.6% 3.9% 22.2% 16.1%Choose• revenue• unit sales• normalized revenue5-levels ofproducts &options4 levels oflocationsRevenue classes• product sales• support• leases Prod intro yearmeasuresinnovationProductmanager forconvenienceSales history,5 yearsGrowth history,4 yearsRoll-up tocompany total3 levels ofindustries3. Sales Reporting and AnalysisTopics
    14. 14. 14Order Attach Rates by Customer SiteRev-or-UnitsV-Units Prod Mgr (All) I Group (All)Rev Class Perp Prod Year (All) I Family (All)Options (All) Region (All) Site Age (All)P Group (All) Location-1 (All) CoState (All)P Family (All) Location-2 (All) CoSalesTeam(All)Product DataPlatform 1 Platform 2 Product A Product BParentCompany CompanySite 2005 20052005%P1 20052005%P1 20052005%P1Intel Corp Intel R&D 170 25 14.7% 103 60.7% 71 41.8%Intel Corp India 29 0 0.0% 5 17.0% 1 3.4%Intel Corp 13 4 31.9% 13 103.7% 6 47.9%Intel Corp UK Ltd 22 0 0.0% 10 45.5% 16 72.9%Intel Corp Salem, Oregon 1 0 0.0% 0 0.0% 0 0.0%ZAO Intel A/O 1 0 0.0% 0 0.0% 0 0.0%Intel Electronics 74 Ltd 1 1 157.7% 1 157.7% 1 157.7%Intel Products M Sdn Bhd 1 0 0.0% 0 0.0% 0 0.0%Intel Corp Total 237 30 12.6% 132 55.6% 95 40.0%Compare similar customer sites to identify opportunities2-levels ofcustomerorganizationAttach rates relative toproduct Platform 1.Site age probes how wellyou attract new customers.3. Sales Reporting and AnalysisTopics
    15. 15. 15Color Maps highlight better and worse segmentsColor Map of Product Attach RatesAutomotive Industry Auto TotalEuropean CountriesEuropeTotalAsiaTotalProduct Family Product France Germany Nordic UK OtherPlatform Product Platform % % % % % % % % %Product family 1 Add-on #1 % % % % % % % % %Add-on #2 % % % % % % % % %Add-on #3 % % % % % % % % %Add-on #4 % % % % % % % % %Product family 1 Total % % % % % % % % %Product family 2 Total % % % % % % % % %Product family 3 Total % % % % % % % % %Key: = product attach rate significantly higher than global industry average= product attach rate significantly lower than global industry average=product sales are too low to consider attach rateNorthAmericaTotalFrance has below-averagesales of two add-on familiesin Auto industry.UK has above-averagesales of two add-onfamilies in Auto industry.UK does not havesignificant above-averagesales of any add-onproduct in this family.UK has below-averagesales of Platform productin Auto industry.France has above-averagesales of Platform productin Auto industry.3. Sales Reporting and AnalysisTopics
    16. 16. Case Outcome• Data-backed information improved decisions at reviewmeetings.• Recognized as most impactful analysis project in thecompany ever.163. Sales Reporting and AnalysisTopics
    17. 17. 4. Sales Planning and ForecastingCase situation– Tens of thousands of market segments.• Secondary segments get little attention.– Sales managers control sales plan.• Product, industry managers have virtually no input.Challenge & Solution– Managers’ targets determine plan for major segments.– Historical trends fill in segment detail and relationships.174. Sales PlanningTopics
    18. 18. Make trends stand out18$0$1,000$2,000$3,000$4,000$5,000$6,000$7,000$8,000$9,000$10,000Revenue History and PlanRevenue -Software Revenue -Support$0$1,000$2,000$3,000$4,000$5,000$6,000$7,000$8,000$9,000T4Q Revenue History and PlanT4Q Revenue - Software T4Q Revenue - Support$0$500$1,000$1,500$2,000$2,500$3,000Software Revenue by ProductProduct AProduct BProduct CProduct DProduct EProduct FSmoothed data makes trends stand out Re-insert seasonalityProvide segment detail(products, locations, industries …) Normalized units make trends visible02004006008001,0001,2001,4001,600T4Q Sales Units by ProductProduct AProduct BProduct CProduct DProduct EProduct F4. Sales PlanningTopics
    19. 19. Case Outcome• Better forecast for thousands of segments.• Consistent forecast for tens of thousands of segments.• Product, industry and other managers have input andownership along with Sales.194. Sales PlanningTopics
    20. 20. 5. Pricing DecisionsCase situation– Company sets student prices to balance two objectives:• Generate revenue from academic market• Seed commercial market by getting students to use products.Challenge & Solution– Extract information from noisy price test data.– Test prices on representative products.– Predict impact of price changes on sales.205. PricingTopics
    21. 21. Extract price impact from noisy test datato predict revenue impact of price changes21020406080100$80 $100 $120 $140PriceSales Units versus Price in Test MarketsProduct AProduct B0.600.801.001.201.400.60 1.10 1.60Normalized PriceNormalized Sales Units versusNormalized Price in Test MarketsProduct AProduct B6007008009001,0001,1001,2001,300$95 $105 $115PredictedTotalSalesUnitsPricePredicted Price SensitivityProduct AProduct B$60,000$70,000$80,000$90,000$100,000$110,000$120,000$95 $105 $115PricePredicted RevenueProduct AProduct B5. PricingTopics
    22. 22. Case Outcome• Segments respond differently to price– for basic products and optional add-ons– In various application areas• Analysis gave academic marketing a better rationale forprice changes.225. PricingTopics
    23. 23. TopicsIntroduction to Marketing AnalyticsCommon Types of Marketing Analysis1. Product Profitability and Customer Profitability2. Marketing Program Contribution Margins3. Sales Reporting and Analysis4. Sales Planning/Forecasting5. Price Testing and Price ElasticityMore Marketing AnalyticsHow to be a good user of analyticsTake Aways23Topics
    24. 24. Good Users of business analytics:• Frame questions that help make better decisions. Examples:– Strategy: Where are markets growing? What are our strongest/weakest suits relative to competitors?– Product profitability: Where do low margins suggest opportunities?– Marketing effectiveness: How much revenue does each marketingprogram ‘generate’?– Sales planning: how combine historical data and managers’ inputs toget the best forecast?• Challenge analysts to provide data-backed answers.• Work with analysts to design reports that help managersmake better decisions.24Topics
    25. 25. 25Management Gurus AgreeTopicsSpreadsheet implementations
    26. 26. More Marketing Analytics6. Sales Commissions7. Strategic Evaluation of Investment Projects8. Bug Tracking (for development-centric product managers)26Topics
    27. 27. 6. Sales commission plansKey Challenge– Align interests of sales force with interests of the company– Align interests on pricing and discounting policies– Adjust commission plan to match objectives for life cycle phase ofproduct and business.Solution– Test flexible commission plans• Pay on revenue, gross margin, and/or other margin• Pay % revenue or margin, $ per unit• Graduated commission rates– Track actual commissions against plan in some detail.276. Sales CommissionsTopics
    28. 28. 7. Strategic Evaluation of InvestmentsCase situation– ~10 internal investment proposals per year– Confusion over selection criteria– Backlog of projects = opportunities missedChallenge– Build consensus behind a planning framework– Select projects, agree on plans and resources– Minimize effort to assemble many business plansSolution– Evaluate projects with sound strategic principles– Develop tool with numerical scoring and qualitative inputs287. Strategic Evaluation of Investment ProjectsTopics
    29. 29. 29Essence of Strategy: Match your strengthswith environmental opportunities.Relative Competitive StrengthPortfolio Matrix depicts match of strengths and opportunitiesLoLoHiHiStronggrowthareasStrongmaturebusinessesIncubationareas Objective:Start / movebusinesses tothe upper right.7. Strategic Evaluation of Investment ProjectsTopics
    30. 30. Date: Business Area: Sample Candidate Investment Project1/9/2009Before Investment After InvestmentNormed Rating Weighted Rating WeightedWeight (0-10) Score (0-10) ScoreMarket Factors - Importance 100.0% Market Factors - Ratings 7.7 7.8Market Growth & Size 60.0% 8.6 5.1 8.7 5.2Competitive Intensity 40.0% 6.4 2.6 6.4 2.6Company Strength Factors - Importance Company Strength Factors - Company Ratings 4.2 6.7Markets and Strategic Factors 29.4% 3.8 1.1 5.9 1.7Products and Technologies 47.1% 4.3 2.0 7.4 3.5Marketing, Sales and Support 23.5% 4.4 1.0 6.3 1.5Opportunity SizeMarket size this year ($ million) $10 SWAG ABC Corp N&M Revenue this year ($ million) $0.0Market size, five years from now ($ million) $40 32% ABC Corp Revenue 5 years from now ($ million) $10Includes only SW. Wild but conservative guessMarket DefinitionApplications Text xxxxIndustry Text xxxxProducts Text xxxxTechnologies Text xxxxCompetiiton Text xxxxInvestment RequiredText xxxxStrategic Planning Template for Projects30QualitativecommentsMarket AttractivenessCompetitive StrengthScores7. Strategic Evaluation of Investment ProjectsTopics
    31. 31. Strategic Planning Template – Scoring Detail31Date: Business Area: Sample Candidate Investment Project1/9/2009Before Investment After InvestmentNormed Rating Weighted Rating WeightedWeight (0-10) Score (0-10) ScoreMarket Factors - Importance 100.0% Market Factors - Ratings 7.7 7.8Market Growth & Size 60.0% 8.6 5.1 8.7 5.2Growth (5 years) 34.3% Growth, 5 years(5% -> 4, 10% -> 6, 20% -> 8)9 3.1 9 3.1Strategic Growth (5-15 years) 17.1% Out-year Growth (6-15 years) 9 1.5 9 1.5Market size 8.6% Mkt size ($10M -> 6, $100M-> 9, $500M-> 7) 6 0.5 7 0.6Competitive Intensity 40.0% 6.4 2.6 6.4 2.6Lack of competing products 17.1% Lack of competing products 6 1.0 6 1.0 Comment xxxxLack of substitute products 11.4% Lack of substitute products 7 0.8 7 0.8 Comment xxxxCustomer fragmentation 5.7% Customer fragmentation 4 0.2 4 0.2Customer affluence 5.7% Customer affluence 9 0.5 9 0.5Bargaining power with suppliers 0.0% Bargaining power with suppliers 5 0.0 5 0.0Company Strength Factors - Importance Company Strength Factors - Company Ratings 4.2 6.7 Benchmark competitor: unclear. Maybe xxxxMarkets and Strategic Factors 29.4% 3.8 1.1 5.9 1.7Competitive concentration 9.6% Relative market share (1.0 -> 5, 2.0 -> 8) 2 0.2 5 0.5 2 years after launchscale economies 4.8% Cost position 7 0.3 7 0.3standards 2.4% Position on standards 6 0.1 6 0.1differentiation 4.8% Differentiating factors 4 0.2 8 0.4 Comment xxxxBrand switching costs 2.4% Customer base to defend 2 0.0 5 0.1Market readiness / timing 1.4% Appropriate time to market 6 0.1 6 0.1Ease of market development 1.0% Market development resources 5 0.0 6 0.1Certification / regulation 0.5% Relative position on cert. / reg. 5 0.0 5 0.0High entry barriers 2.4% Entry costs paid 2 0.0 4 0.1Products and Technologies 47.1% 4.3 2.0 7.4 3.5 Raised -- embryonic very hi-tech pushed to limitsProduct line synergy in market 2.3% Product line synergy in market 4 0.1 8 0.2XXXXXXXX (technology) 7.6% XXXXXXXX (technology) 10 0.8 10 0.8 Comment xxxxBlock diagram editor 7.6% Block diagram editor 3 0.2 8 0.6 Comment xxxxXXXXXXXX (technology) 3.8% XXXXXXXX (technology) 6 0.2 8 0.3 Comment xxxxXXXXXXXX (technology) 3.0% XXXXXXXX (technology) 2 0.1 8 0.2 Comment xxxxXXXXXXXX (technology) 3.8% XXXXXXXX (technology) 2 0.1 6 0.2 Comment xxxxXXXXXXXX (technology) 3.8% XXXXXXXX (technology) 6 0.2 7 0.3 Comment xxxxDomain expertise 3.8% Domain expertise 2 0.1 4 0.2XXXXXXXX (technology) 3.0% XXXXXXXX (technology) 2 0.1 7 0.2 Comment xxxxXXXXXXXX (technology) 2.3% XXXXXXXX (technology) 2 0.0 6 0.1 Comment xxxxLarge models - performance 3.8% Large models - performance 4 0.2 7 0.3 Comment xxxxLarge models - storage 2.3% Large models - storage 1 0.0 6 0.1 Comment xxxxMarketing, Sales and Support 23.5% 4.4 1.0 6.3 1.5 Comment xxxxBrand recognition 3.9% Relative brand recognition 6 0.2 8 0.3Customer relationships 4.9% Customer relationships 4 0.2 6 0.3Distribution - industry coverage 3.9% Relative industry coverage 4 0.2 7 0.3Distribution - geographic coverage 2.9% Relative geographic coverage 7 0.2 7 0.2Distribution - domain expertise / sales model 3.9% Distribution - domain expertise / sales model 4 0.2 5 0.2Customer support requirements 3.9% Applicable support resources 2 0.1 5 0.2 Comment xxxxMarketAttractivenessFactorsCompetitiveStrengthFactorsComments7. Strategic Evaluation of Investment ProjectsTopics
    32. 32. Case Outcome• Backlog disappeared in first year.• Champions and management use same strategic concepts• Thorough analysis with minimal commitment of manpower• Strong buy-in by project champions327. Strategic Evaluation of Investment ProjectsTopics
    33. 33. 8. Bug Tracking with appropriate detailCase situation– Software company had reasonable bug data and reports; but…– Bug reports did not provide information that product managersneeded, and overviews that VPs and president needed.– Response to requests for altering reports was slow and costly.Challenge & Solution– Combine overview and deep detail in related reports.– People who are close to report users design reports.Case outcome– Some executives and product managers adopted new bug reports.– Customer support department approached the team that built thesereports to do their customer case tracking.338. Bug TrackingTopics
    34. 34. Take Aways• Marketing analytics is revolutionizing marketing.• Marketing analytics can help make better decisionsin many areas.• All case studies were done using Excel workbooks –you don’t need an expensive BI system.34
    35. 35. Thank You and QuestionsDick PettiModelSheet Software, LLC••
    36. 36. Back up; not for presentation use
    37. 37. Management– Howard Cannon, Co-founder, CTO, Chairman• Co-founded several technology startups• Inventor, innovator, patent holder• VP, CIO, CTO in several software companies• MIT Research Staff– Richard Petti, Co-founder, President, Director• Co-founded several software startups• CEO; Director - Marketing, Business Analysis, Strategic Planning• McKinsey & Co., GE HQ and other Fortune 100 companies• PhD (Berkeley), MBA Finance & Marketing (U Chicago), BS (MIT)– Adrian Hancock, VP Marketing and Business Development• Marketing executive for hi-tech global B-2-B productivity solutions• McKinsey & Co. - focused on marketing and operations in variety of industries• MBA (Harvard Business School), BA (U Nottingham)37Topics
    38. 38. Customizable Spreadsheet SolutionsA customizable spreadsheet is a flexible model that you adaptto your situation by providing business information, withoutediting a spreadsheet or its formulas.For example, you can– specify time range and time grain– specify number and names of items in a dimension (such as yourproducts and product families)– include or exclude major features.The resulting spreadsheet matches your needs better than anystandard template can.38TopicsSpreadsheet implementations
    39. 39. Customized Marketing Analysis Spreadsheets• Product & Customer Profitability– Products:– Customers:• Marketing Program Effectiveness–• Sales Planning and Reporting– Planning:– Reporting:• Pricing Decisions– One product:– Several products:• Sales Commissions–• All our custom spreadsheets (Marketing & Sales, Finance, other)– implementations
    40. 40. Summary: ModelSheet has 3 Offerings1. Customized Spreadsheets– Adds flexibility, feature-richness– 100% automated process on our website – low cost.2. Consulting to build Customizable Spreadsheets– We add new features to existing customizable spreadsheet models tomeet customer requirements.– We build new customizable spreadsheet models.3. Access to ModelSheet Authoring– You build customizable spreadsheet models using ModelSheetAuthoring.Topics40
    41. 41. ModelSheet addresses spreadsheet pains.CollaborationAuditingIntellectualPropertyModelExpressivenessFlexibilityTurnaroundTimeReliabilityModelsOrganizationStrategic CapabilitiesStaffTurnover41Topics
    42. 42. Contacts and InformationPeople• Dick Petti• Adrian Hancock anhancock@modelsheetsoft.comMore information• Marketing Analytics white paper• Main Website• Template website• ModelSheet Software info@modelsheetsoft.com42Topics