Business Planning: Assessing Brand & Territory Performance

Business Planning is a chance to step back from our day to day tasks, to review the external environment and internal opportunities and set expectations, requirements and strategy for commercial success. Setting and defending your 2011 brand forecast assumptions however can be time consuming and frustrating. Marrying your intuitive insight with a defendable position, sometimes based on less than perfect data, can lead to unnecessary challenges and less than ideal outcomes on 2011 resources and targets.

While accessing reliable data is part of the issue, for many brands a systematic approach to the initial performance analysis can create a significantly more efficient and better outcome, allowing sales and marketing teams to focus on resource and action planning rather than multiple iterations of assumptions and portfolio plans. This article is the first in a series that will look at key business planning processes and how managers and sales and marketing teams can utilise best practice principles to ensure effective and competitive outcomes for their brands.

Be inclusive

When reviewing data sources for business planning you must include both input (resource) and output (performance) metrics. While brand sales vs. a benchmark, such as prior year sales, market growth and/ or potential are common to most performance analyses, sales vs. resource allocation provides insight to the effectiveness of current strategy and execution. Many teams miss this step and subsequently fail to identify critical issues and opportunities for future brand growth. It is like a doctor telling you that you are developing heart disease but not going to the trouble of finding out whether it is can be managed with diet and exercise.

Look for variance

Reviewing current brand performance has two objectives: identifying growth drivers and key growth issues. The way to achieve this is to approach the analysis as a search for variance.

Variance is where a metric is performing measurably better or worse than a benchmark and gives us the opportunity to ask why this has happened and what is driving it, effectively identifying and subsequently quantifying causes of change? There are many ways of doing this but generally the best processes review KPIs longitudinally to ensure that both positive and negative trends are taken into equal account. Similarly resources that fail to impact KPI trends over time need to be questioned.

Don’t be scared to ask more of the data

If you are measuring variance on incident data, such as current month performance, or even last 3 months, you run the risk of the most common mistake made in business planning: accepting poor metrics. When you set up or review your KPIs consider how compound measures can better help you understand brand and territory performance.

EI (evolution index) as a measure of a brand’s market share growth is not, on its own, necessarily very helpful in understanding whether or not a territory or account is performing at a high or low level. If you look at how it has changed over time and apply an additional benchmark, such as national EI performance, you suddenly have a KPI that gives you a more useful diagnostic of relative performance.

An easy test of whether or not a KPI is really going to help is to ask the following question: “How is this helping me to understand what actions we need to take to be successful?”

The final key to good performance assessment is to not dwell on factors that have not been measured or cannot be quantified. Teams that become fixated on non controllable or non quantifiable factors quickly lose focus and allow subjectivity to dictate strategy and planning.

Conclusion

Business planning is an opportunity for stepping back, identifying and quantifying brand and sales team performance drivers. Organisations and managers that include input and output metrics in their preparation can better utilise performance variance to identify and prioritise causes of change, ensuring sales and marketing teams can focus on strategy and action planning.