5 min read

Commercial revenue planning: Allocate investments to influence outcomes

Bob Debicki

CPG & Retail Industry Head

Whatever the business conditions, the show must go on for your revenue plan. Quickly allocating your investments protects your plan and your revenue.

As a commercial planning manager, you are attuned to wild fluctuations in customer demand, and post pandemic, you probably pay even greater attention to the amount and kinds of promotions you plan for each product. Although commercial planning has become more rigorous, the fundamentals haven’t changed, particularly around allocating investments to influence outcomes. In our previous installment on Anaplan’s recipe for top-line revenue growth, we discussed the first ingredient, identifying drivers of revenue performance. In this blog post, we are focusing on the second ingredient, allocating investments to influence outcomes.

Generating high-quality revenue requires allocating investments to get products in front of shoppers and stimulate demand, and translating those directives into specific actions that will influence shoppers to become buyers. The increasing complexity is the sheer quantity of events that now affect both routes to market and customer behavior. That generates a lot more data that needs to be factored into any plan.

Your plan for success can change in the time it takes an influencer to post on social media

Even in relatively stable times, for seemingly mundane staple products, a robust revenue plan also represents an enormous database to keep updated. Unplanned events, or events thought to be implausible like sudden panic buying due to lockdowns or a cyberattack, a TikTok influencer triggering a run on feta cheese, or fears of inflation, all add to the complexity of revenue plans.

Of course, it doesn’t take a cataclysmic event for product revenue to be affected. But revenue planners shouldn’t wait to see how bad things need to get before their plans break. Being proactive involves creating different versions of the revenue plan to model different scenarios, even though it also multiplies the number of spreadsheets you need to manage. You can probably visualize that a fully developed revenue plan looks like a massive spreadsheet, containing thousands of columns and potentially millions of rows, populated by each of your product SKUs, the geographies where they are sold, their various sales channels, the retail chains that stock them, individual stores in each chain, and promotional investments allotted for each item, all of which may be reported across multiple months. You probably agree that without an efficient, real-time system for allocating and updating your investments, you risk your ability to respond to fast-changing market conditions.

Adjust the ingredients without missing the bar on revenue

Failing to implement timely changes to revenue plans and simultaneously redirect investments is like changing one ingredient in a recipe without adjusting the others, which would spoil your whole cake. For example, you could budget too much on promotions and squander working capital, or budget too little and watch your sales plummet, possibly even losing a coveted shelf slot. All the while, you’ll be spending excessive time on mechanical updates and assuring that changes made within your own planning system get conveyed to your trading partners’ systems. Yes, it’s a tiresome, manual part of the commercial revenue planning process, and one taking up time and energy that you could be using for your products’ long-term benefit.

Any change in a revenue plan also leads to a reallocation of investments as they apply to the updated business plan for the product line. As a commercial planning manager, you’ve done the work setting up your system and feeding it data. When the time comes that you need to make changes to your plan, it’s also the time to make the system work for you.

Anaplan equips revenue planners to serve up a feast and waste no ingredients

Even in a volatile environment, the new Anaplan for Commercial Revenue Planning solution makes allocating your investments to maximize revenue growth faster and easier. A distinctive benefit of the solution is empowering you to shift between perspectives, connecting the high-level view of analyzing and understanding the drivers of revenue performance with the sharply focused perspective of charting out a plan in highly granular detail, and on down to the last SKU in an individual store, all without sacrificing the speed and performance that will empower you to respond flexibly in real time as circumstances change.

Distribute marketing budget among and within buckets of spend, channels, and accounts.

 

Anaplan for Commercial Revenue Planning is powered by Hyperblock™, Anaplan’s in-memory database that is unrivalled in its sheer processing capacity. Revenue planning teams will benefit, especially by its high-performance handling of complex bottom-up planning and rolling up of the details, helping assure that well-crafted revenue plans can be readied for smooth execution. Revenue planning teams will also find that Anaplan for Commercial Revenue contains several advantages that can be put to immediate and productive use, including:

  • Rich analytical capacity to slice, layer, and manipulate data across multiple dimensions, for example, product families, geographies, or store chains.
  • Easy handling of very large data sets, even those containing millions of rows of data and thousands of columns.
  • Ability to react in real time, rather than having to deal with limitations due to batch processing on systems that run updates only once a night, and only afterward pushing out the changes to other systems.
  • Smooth integration with other enterprise applications and with trading partners’ applications.
  • “What-if” scenario building, where you can test an unlimited number of change interventions, and evaluate multiple variables of product, price, place, and promotion.

The last of these, “what-if” scenario building, is sometimes called sandbox experimentation. Despite such a playful name, it is a powerful tool for commercial planning managers to simulate how changes to their revenue plans, whether incremental or radical, affect both the whole and the parts of the plan.

In our next installment, we’ll discuss how Anaplan for Commercial Revenue Planning enables you to evaluate “what-if” scenarios in real time, whether in response to sudden changes or in anticipation of them.

Learn more about how Anaplan for Commercial Revenue Planning can help streamline your operations and boost revenue.

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