Simba Sleep: Accurate Forecasting For Sales Periods
What are Statistical Models for Forecasting
An accurate forecasting tool/model enables you to both forward plan (“I need to do X to achieve Y KPI”), and understand performance retrospectively.
The best models can accurately predict incremental revenue from marketing, considering demand, discounting, spend, seasonality etc.
Statistical models for forecasting allow you to:
- Plan budgets: get a concrete answer to how much you can spend & scale revenue, with various contextual factors like seasonality, discount % etc, in order to achieve X KPI.
- Understand how much you might need to raise from investors and give deeper clarity on how it’s allocated.
- Know and confidently assert whether performance has been good given the day of week, time of year, appeal of promotions & sales.
- Invest the right budget splits across advertising channels to achieve X KPI (profitability, revenue growth etc) when increasing overall spend, considering diminishing returns.
Forecasting for Simba Sleep
Simba were running a sale and wanted to acquire the most amount of customers possible within their KPI, without leaving money on the table. They needed to understand the maximum amount they could spend on their combined digital channels, with recommended channel budget splits and the total expected revenue from that budget.
We created a forecast which provided optimal budget splits across all of their advertising channels given the promotional strategy. This enabled Simba to maximise their efficiency at scale over this critical period, plan stock, save £tens of thousands vs initial plans and predict revenue to within ~5% of actual.