Companies, especially small businesses, often use guesswork in determining budgets for marketing campaigns and promotional offers. Sometimes, it’s just that “follow your gut” feeling or based on limited, unstructured data.
Last week, an ecommerce company from Mumbai approached me with this dilemma – “How much should we spend on our marketing campaign?”
They plan to run a promotional campaign for printed t-shirts for cricket fans in India. I helped them simulate the outcomes of their campaign using what-if analysis in Microsoft Excel. In this post, I will share:
- The exact Excel strategy I used to optimize their campaign spend (Free downloadable template included!)
- How to use data tables to predict campaign results and maximize profits
- Multiple use cases for this powerful Excel technique
Video: What-if Analysis to Plan Your Marketing Campaign Budget
This free template can be easily adapted to any marketing campaign, allowing you to:
- Visualize different budget scenarios to make informed decisions
- Optimize your spending for maximum return on investment (ROI)
- Stop guesswork and set a budget with confidence
Ready to take control of your marketing budget?
Download this free template now.
P.S. If you have any questions about tailoring this strategy to your specific needs, please comment below. Or, visit the contact page and fill up the form.
The Context
Leveraging the surge in cricket fandom during the IPL, this company is launching a line of printed team jerseys on their online store.
Their online store provides a convenient way for fans to showcase their passion by offering custom-printed team jerseys throughout the IPL season. The jerseys come at a competitive price with a manufacturing cost of INR 129 and a shipping cost of INR 49.
The initial plan was to spend INR 100,000 on the promotional campaign. However, at a 4% conversion rate and the selling price of INR 499, it would be a loss making campaign.
The next step was to identify the optimum marketing campaign budget that would help them meet their profit goal of INR 100,000.
The Solution: What-if Analysis
Manual work would have been cumbersome. Hence, I used what-if analysis in Microsoft Excel (refer to the table given below).
Insights from the what-if analysis:
- At a selling price of INR 499 and cost of INR 129, the company cannot earn the desired profit at a 4% conversion
- At a 5% conversion, they would need to spend INR 350K to earn a profit in excess of INR 100K
Decisions to be made:
- Should they scrap the campaign?
- Can they spend INR 350K on the promotional offer?
- Should they consider increasing the selling price to INR 599?
The statistical simulation of the marketing campaign budget helped them evaluate different scenarios and make some informed decisions.
Ditch the guesswork and maximize your marketing ROI! Get your copy of this free template to run simulations and make data-driven decisions for your next campaign.
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