Online Insurance Aggregator Gains An Edge By Using Qualitative Forecasting
Market intelligence isn't just about assessing competitors; forecasting isn't just for historical data!
A previous Insight Lime client reached out to us during an exciting new time: they were starting a new business. They wanted our analytics agency to help validate their ideas about how much they could expect to earn and have a data-driven strategy for their investments. As a focused new business, they knew they needed a strong marketing budget plan and modeling to ensure they were on the right track with their business goals and assumptions.
How do you forecast without previous revenue? Well, you model, of course! Our client wanted to know whether they were making the correct assumptions and if their goals were feasible with the amount of budget they had. They wanted to focus on digital marketing only as they were a digital-first business.
“We found Insight Lime Analytics to be a very cost effective and productive source for identifying the appropriate web tools and implementing them”
Enter Smart qualitative forecasting:
We went about giving them an answer on how far their investment would take them by creating a model based on data we did have, which was current market data from Google Ads, Organic, and search marketing intelligence.
Qualitative forecasting is a vastly underutilized tool - we love to incorporate it into our analysis because it gives a data-informed tool that can spark better conversations and show the theoretical in a visual format.
We looked at their competitors, analyzed how their first few years went, and asked questions about what it meant with our expert lens.
Did they have progressive growth in organic search from the beginning, or did growth in rankings happen slowly over time? We then compared that with market intelligence research about those companies' funding. Was it in line with our client? Or did they have way more (or less) to spend?
The Problem
The client had predictions on expected growth and revenue before launching and wanted to validate to ensure they were on the right track. As previous clients of IL, they trusted us to give them an unbiased answer that would help them understand how to spend their initial investment in the best way that would get them to their business goals.
With so many complex factors out there, it was difficult for them to get a handle on what was realistic in digital without leveraging the expert opinions of our consultants, that have a deeper knowledge of Google Ads, Facebook Ads, and the SEO landscape they would be competing in.
When just starting, it can sound impossible to get this information. However, with market intelligence and creative modeling, you can have more to go on than only your guesses. Overall, Insight Lime has seen that most businesses far overestimate how much return on ad spend they will get (and believe they will get much more with their organic efforts). While it's easy for us to say that to our clients, it's harder often to get businesses to believe. With our qualitative models, we're able to show instead of telling.
The Process
We started by understanding their business model further and their goals as business owners. Our consultative approach means we asked vision questions (what is in your wildest dreams) and practical questions about how much funding they had available.
We then created a model using current CPCs for Google Ads, organic traffic trends of their competitors during their early years, and marketing mix models to develop a model that forecasted the required investment in paid/organic and the possible outcomes they could reach within the first year - as well as what mixes would yield a profit vs. a negative return on investment to show different strategies available to them.
The model has drop downs that make it possible to play with the information provided and experiment with what a high investment in SEO would look like or a high-all-around investment. The model itself is only the first part of the process, though. Once the model is complete, we begin collaborative conversations with the client about what is possible and help imagine all possibilities.
The Results
The model was built with high, medium, and low scenarios to help them understand their outcomes under different situations concerning volume, CPC, and SEO revenue. These scenarios crystallized the ways that conditions that they would have to meet to be successful in reaching their goals.
The outcome showed them a different path forward than they initially planned without this research - showing that this type of research can help validate ideas and help startup founders and established businesses alike have good strategic conversations based on the data.
We always recommend looking for a healthy marketing mix - not relying entirely on one channel and our model proved that relying only on PPC could result in a business that wasn't profitable and that relying exclusively on organic would mean slower growth than our clients wanted to see in the first year.
*The data is cleansed and not representative of the analysis created. These numbers are random and meant to exemplify the type of modeling but do not represent real numbers.
The Final Outcome
While the model showed that their initial marketing goals weren't realistic, after looking at the model, they could make much more informed decisions about how to use their investment in the first year. They made different decisions than they would have without using us for forecasting and modeling.
Doing this extra due diligence instead of just setting budgets and running meant they had a more realistic picture of what was possible from the beginning of their business. Similar methods can be used for startups and established companies - any time you enter new territory, whether it's entering a new market or adding more spend on marketing.
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