The Ark: Business Principles – Advertising and Forecasting
I think these two areas both link to the “Truth and Trust” theme yesterday and how strange that today’s journey should have thrust them to the fore.
I had been giving some thought to forecasting the other day because when I had checked the weather forecast we were predicted an odd week – no wind but clear skies (therefore frosty mornings) until Thursday when it was going to belt down all day with rain. So I had loosely planned my week around this – the kite has been going with me but hasn’t even been unpacked this week let alone flown. I had planned a more inside based day for today so I didn’t have to be out and get drenched.
I have pushed myself a little on the last few days keeping walking despite a sore tendon or ligament in my lower leg. It was good to walk less today or at least walk at a more leisurely pace since I didn’t have a certain area to cover. Now the weather forecast was partially true – it was raining this morning but not hard and not over long – but the rain has ‘moved’ to tomorrow instead. How accurate is my weather forecast? well generally it is pretty good – it is not dependent on fixed weather station readings but on satellite data. Weather station data for the Kirriemuir area comes form a station near the sea many miles to the east and it is not rocket science to work out that a seaside micro climate will be very different to ours.
When it comes to business, forecasting needs to be accurate. Many years ago I had a role where I forecast the recurring fee income on a month by month basis. Without breaking any confidences I had to combine the following tasks to achieve an accurate forecast:
- Draft and agree the annual fee letter (negotiated with Manager based on the resource they defined);
- Issued fee letter to client and received the signed agreement back;
- Recorded the planned fee income and kept it updated as changes occurred;
- Plan the resources for the work (ensure Managers did not book more expensive resources than they had defined for the work);
- Liaised with the client and manager to ensure slippages were managed and agreed additional fees billed and recorded; and
- Balanced the invoiced fees to the forecast.
The master spreadsheet I inherited for this task became very unwieldy as more and more accurate forecasts were required. From this I know that a spreadsheet is not a sophisticated tool for accurate forecasting but I also know my spreadsheet skills were greatly enhanced by this task.
Why is accuracy so important? well a business can literally succeed or fail by the accuracy of the forecast; it can be the difference between attracting investors and not and between having a healthy cashflow or not. Poor cashflow is possibly the greatest threat to a business and certainly to a new one. I don’t want to be over cautious when I forecast but at the same time overstating it could kill a business before it gets off the drawing board.
One of the tools to help us achieve our forecast is advertising. Now I am not a person who is easily swayed by a glossy advert; I like to consider and analyse before I rush into buying.
One of the things that many folk find odd about me is that I do not watch television; I turned mine off one evening early in 2009 and it hasn’t been on since.
The TV is still physically in my lounge – it is symbolic of something for me because when I bought my own house and left my partner of 13 years it was one of the few items I purchased with cash rather than on credit. I got into debt by overstretching myself shortly afterwards and so this item has been a symbol of making good choices.
I have seen television a couple of times over the almost 4 years when I have been visiting other people and when I do it seems loud and brash to me and I do not enjoy the experience. Prior to 2009 the TV had been a noise in my life to avoid me feeling alone; now I am happy to be alone and do not feel lonely.
Today I went to the cinema; I wanted to see the film Untouchable because of the subject matter. I haven’t been to the cinema in around 2 years after a spell of going most weeks; it was quite bizarre that when I arrived 15 minutes before the showing the cinema was in darkness with no music and no screen on. I sat there alone for 1o minutes before some music started; then the adverts began – the noise was almost unbearable. The first advert was very cute; it told a story about a cloud as if it was a film trailer but it was promoting a well known stout, then there was one about a manic bee which was for a liquor. I cannot remember the next couple but then there was one that made me smile – an advert to encourage people to buy UK grown apples – well done Tesco! After several more we went onto trailers for films (still adverts really) and then the cinematic promotional stuff – half an hour of adverts thrust down our captive audience throats (by now half a dozen others had joined the audience).
I can only describe how I felt as attacked – does that win business? not in my book it doesn’t. The advert for apples felt truthful and real to me; the others were a good helping of make believe and I grew out of fairy stories many years ago. So what I took from this experience is that advertising needs to be truthful to succeed.
By the way, despite half an hour of force fed adverts, I really recommend the film – excellent and very thought provoking when it comes to how we treat people with a disability. Seriously being in French with English subtitles will not challenge you – most phrases involve repeated words so you start to ignore the subtitles anyway! There was a section where an attempt was made to educate one of the characters in classical music – every piece that was played he recognised based on an advert or screenplay – very amusing. I laughed and I cried a little too – so if you haven’t yet pop along to your local cinema and relax for an hour or so.
So my business planning from today is that advertising campaigns need to be honest and trustworthy and forecasts need to be accurate and realistic (truthful). One way to make my advertising honest is to ask people who have already benefited to share their experiences and in addition to printed material I hope some of them may be willing to do this as volunteers or by telling their story in a digital format (video). When it comes to forecasting I have some insight from my previous work to take as a starting point and then I need to hit the ground and ask potential customers what their expectations are.
While I have been thinking about truth and trust, forecasting and advertising I have also been thinking about what contingencies need to be in place when it goes wrong (because it will at some point) … I will share this thinking tomorrow.