Planning and forecasting in direct marketing

Direct Wines_CORP CMYK_smallFor Direct Wines, the world’s largest direct-to-consumer wine merchant, Golden Orb were engaged to develop a management information and forecasting tool, covering campaign planning, reporting and forecasting. Nothing comparable was available off-the-shelf, and Golden Orb developed a comprehensive system which:

  • let marketers plan forthcoming recruitment and customer marketing campaigns
  • allowed Finance to see the aggregate future P&L implications of these marketing plans
  • provided the operations team with daily forecast orders and cases by order channel to allow them to manage resources
  • provided comprehensive reporting of actual and planned sales volumes and financials – down to net contribution level
  • carried out automatic reforecasting of campaign response after a few days
  • modelled future sales from the company’s continuity business with a high degree of accuracy
  • calculated lifetime value per recruit and evaluated recruitment campaigns and media in terms of return on investment (ROI)

The project raised a number of challenges which played to Golden Orb’s strengths – both technical and analytical. The first was to develop a consistent Data Warehouse holding data from a variety of source systems across the world which used different assumptions and approaches to coding data. The second was to develop a simple and intuitive user interface which would be available across the world and would provide responsive access to, and analysis of, up-to-date data 24 hours a day. The third challenge was to overlay this simple reporting system with highly sophisticated forecasting and planning tools to allow the client to learn from experience and continuously reforecast future sales.

The technical architecture adopted was a ‘three tier’ solution, consisting of an ASP.NET web front-end, an analytical OLAP layer and an underlying relational data warehouse holding the detailed data: the last two tiers residing in an Oracle database. The data warehouse is updated daily with information from the various different source systems, creating a single, coherent picture of the global business. This information is then aggregated and summarised in the way that the business requires using the embedded OLAP technology in the Enterprise Edition of the Oracle database. Although the combination of ASP.NET and Oracle OLAP is not one which is widely used, we have found it an excellent combination for the job, with Oracle OLAP providing probably the best OLAP engine on the market – certainly when its pricing and rich language/syntax are taken into consideration – and ASP.NET providing a low-cost, easy-to-implement environment for developing a user interface.

The system runs on inexpensive Intel hardware and the results have been extremely positive. Performance is good, access to data within the business is much better than it has ever been in the past and the three-tier design is proving an excellent platform onto which to build new functionality. A rolling schedule of activity loads new sales overnight and re-forecasts running campaigns for each market; this provides an updated snapshot, not only of campaign sales to the end of the financial year, but also of the knock-on effect on the company’s continuity business.

Simon McMurtrie, the then Global CEO of Direct Wines, said of the work:

At the heart of the Direct Wines business (best known for our Laithwaite’s Wine, Sunday Times Wine Club and Virgin Wines brands), are decisions we make about where to invest our marketing spend: which consumers we should be aiming to recruit as new customers; which channel (e-mail, the web, direct mail, the phone, etc) we should be using to encourage those customers to buy more of their wines from us and how to assess the profitability of all of our different marketing activity.

Having never solved this problem properly (over nearly four decades!), we turned to Golden Orb to create a simple, clear and clean system, which everyone (from CEO to Marketing Assistant) would find easy to use, to crack the problem once and for all.

Now rolled out into our businesses in the US, UK, Australia, Germany, Hong Kong, Poland and shortly, India, GMS provides the guiding star which leads our marketers in the right direction and gives us the visibility over the return that we have achieved (and could achieve) on all marketing investment.

The people, software and service from Golden Orb have all been exceptional. If it’s insight you seek, don’t look any further.

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