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Using Scenario Planning to Quickly React to Market Dynamics

The best marketing teams perform scenario analysis to pre-plan certain circumstances, so they can react quickly if the need arises. For example, how would you adjust the marketing plan if you had a 20% more budget or 20% less?

Developing and modeling out what-if scenarios in marketing helps you prepare better for potential surprises throughout the year. If you have to make those decisions in real time, you’re less likely to make the best decisions promptly. This article reviews scenario planning for marketing teams.

How to Use Scenario Planning for Marketing

Use scenario planning to quickly react to market dynamics or internal business factors

 

When building an agile marketing plan, start with your baseline plan (the one that was built to achieve the original company objectives) in scenario planning, and use it as a barometer to build your scenarios— these are a set of restated goals, either up or down, determined by business outcomes that deviate significantly from the original objectives.

These scenario-based goals have a material impact on the marketing plan’s strategy, campaigns, and budget. The purpose of scenario planning is so that when you recognize changes in the business, you have a pre-built plan to quickly course correct. In our 2021 OMI survey data findings, less than 60% of marketers build out their plan on scenario planning.

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When creating scenarios, the first step is to define a new set of goals based on under-or over-performance. Once the objectives are established, create a set of goal-based marketing scenarios that are triggered by pre-defined potential outcomes. These scenarios are designed to prepare you for dealing with bumps in the road that cause underperformance or leverage overperformance to supercharge your marketing plan.

Underachievement Scenario

For underachievement, it’s not necessary to create more than one scenario, but having two slight [underachievement (25%) and significant underachievement (50%)] is recommended if your business has variability or ambitious goals.

If you feel there is a chance underachievement could be greater than 50%, you may want to redo your original plan. Companies with this level of variability are usually start-ups or businesses with little to no historical data.

Overachievement Scenario

For conservative marketing plans with potential revenue upside, you might want to also look at an overachievement scenario. When building this, check with the CFO to confirm that marketing will receive some of the proceeds for additional programs if revenue targets are exceeded.

Ideally, you will want to leverage the newly acquired funds to conduct experiential marketing initiatives aimed at expanding your current repertoire of campaigns and programs.

The Scenario Planning Process

There is a seven-step process for the marketing scenario planning process, including building and executing scenarios:

  1. identify reasons or causes of potential risks or issue
  2. Determine the impact on your organization’s current goals
  3. Create a new set of goals for underachievement or overachievement scenarios for marketing
  4. Rank the importance of marketing strategies, campaigns, and programs
  5. Build a tiering structure based on the level of underachievement or overachievement
  6. Select key marketing metrics to monitor, and create thresholds for when scenarios are trigged
  7. Assess the impact of switching to a scenario and adjust according to the strategies outlined.

 

 

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Dan Faulkner is co-author of The Next CMO: a guide to operational marketing excellence, and the CTO of Planful, where he is responsible for the technical strategy and delivery of the world’s first AI-powered marketing management platform. Dan has 25 years of high-tech experience, spanning research and development, product management, strategy, and general management. He has deep international experience, having led businesses in Europe, Asia, North America, and South America, delivering complex AI solutions at scale to numerous industries. Dan holds a Bachelor’s degree in Linguistics, and Masters’s degrees in Speech & Language Processing, and Marketing. He has completed studies in Strategy Implementation at Wharton.

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