Commercial Intelligence

Commercial intelligence = how you use the data to make smarter decisions, ensuring decisions are rooted in evidence rather than speculation.

Components of commercial intelligence

• Data Integration: internal data (sales figures, CRM records and operational performance) + external sources (market research and competitive analysis) = holistic view of the commercial environment = better assess positioning.
• Market insights: shifts in demand, customer preferences and competitive landscapes. = anticipate changes = adjust strategies

Commercial intelligence is a systematic process of gathering and transforming data into insights that drive strategy to guide:

• product development
• marketing strategies (adjust offerings, develop better pricing strategies and anticipate industry shifts)
• risk management

You need a strategy. Why?

• To beat competitors, you need a strategy. You must stay ahead of the competition. Marketplace is ever-evolving
• The goal of the strategy is not just to beat competitors but to improve business outcomes

What type of business outcomes are there?

• revenue growth
• profitability increasing (analyze sales data for this)
• operations optimisations

Why such outcomes are possible with a strategy?

• Strategic audit identifies opportunities
• Strategic recommendation mitigate risks

How to create a strategy?

• To propose a data-driven strategy, you need insights.
• You can get insights only after gathering and transforming some data.

What is the name for the process of gathering and transforming data into insights that drive strategy?

• You have to gather data and transform it into applicable insights after analysis.
• Such systematic process of gathering and transforming data into insights that drive strategy is a commercial intelligence.

What type of data is gathered?

• market trends,
• customer behaviour,
• competitive dynamics
• internal performance metrics

Where to get that data?

• market research platforms (Nielsen or Euromonitor to understand broad market trends, industry shifts, and customer preferences, emerging competitors, demographic changes, and consumer buying habits = insight to anticipate shifts and adjust strategies accordingly)
• customer feedback (CRM Systems – Salesforce or HubSpot –  to track interactions, purchases, and feedback = insights into customer needs and behaviours=>segment audiences and create highly personalised marketing strategies, improve customer satisfaction and loyalty = meet the needs of high-value segments
• sales data analytics (Tableau or Microsoft Power BI) – track product performance, identify seasonal trends, or understand which markets perform best = optimise product offerings, improve profitability
• competitor analysis (Competitive Analysis Tools – SEMrush or SimilarWeb- to track competitor performance, market share, and digital strategies, competitor pricing, advertising efforts, and even customer sentiment) !where the competition is excelling? !where they might be falling short? =the edge to outmanoeuvre their rivals
• social listening (Brandwatch or Sprout Social = hear the voice of the customer = monitor social media platforms for conversations about their brand, industry, or competitors.) = understand customer sentiment, understand pain points, and adjust their strategies to meet market demand more effectively.
• Predictive analytics (IBM Watson or Google Analytics = historical data + machine learning to forecast future trends) = predict likely future scenarios = customer behaviour, sales trends, and potential risks = proactive decisions = adjust inventory levels or fine-tuning marketing campaigns

1.1 Financial metrics to understand marketing’s contribution

Basic financial metrics—revenue, profit, profit margin, ROI, break-even point, CAC, and CLV.

1.1.1 Key Financial Terms

1.1.1.1 Revenue

the total income generated from the sale of products or services before any costs or expenses are deducted. ex.:$100,000

1.1.1.2 Profit

the financial gain remaining after all costs and expenses are subtracted from total revenue. ex.:$10,000

1.1.1.3 Contribution and contribution margin

the amount of revenue minus variable costs, contributing to covering fixed costs and generating profit. ex

1.1.1.4 ROMI/ROI

Measures of the financial return on investments, with ROI evaluating overall investment performance and ROMI focusing specifically on the return from marketing expenditure.

1.1.1.5 Conversion rate

measures the percentage of potential customers who take a desired action
1. making a purchase,
2. signing up for a newsletter
3. filling out a contact form
out of the total number of prospects.

Break-even (point)

The point at which total revenue equals total costs, indicating no profit or loss.

Customer acquisition cost (CAC)

A key performance metric
total cost to acquire a new customer:
– all marketing expenses (advertising, promotional campaigns, digital marketing efforts),
– sales costs (commissions, sales team salaries)
– any other expenses directly related to attracting and converting leads into customers.
A high CAC =? inefficiencies in marketing efforts.

Customer Lifetime Value (CLV)

The total revenue a business expects to earn from a a single customer account over the duration of their relationship with the company.
– determine how much should be spent on acquiring and retaining customers, ensuring that marketing investments are proportional to the value they will generate.
CLV = Average purchase value x Purchase frequency x Customer lifespan

1.1.2 Cost-Benefit Analysis (CBA)

Systematically compares the benefits of a marketing initiative to its costs, for informed resource allocation. CBA = Total benefits/Total costs

(Customer) attrition rate (Churn)

A customer metric that measures the percentage of customers who stop doing business with a company over a given period. If a company starts with 1,000 customers and loses 100 over a quarter, the churn rate is 10%.

1.2 Marketing Performance Metrics

1.2.1 Product Portfolio Analysis

Product portfolio analysis evaluates each product’s contribution to revenue, profitability and market presence.

1.2.2 Year-Over-Year Analysis (Year-on-year trends)

YoY trends compare sales performance, customer acquisition, customer behavior, other KPIs over the same period across multiple years.

1.2.3 Share of voice (SOV)

SOV = (your brand metrics / total market metrics) x 100. You can measure different metrics e.g add spend.

3. Forecasting and Financial Techniques to Support the Marketing Budget

3.3.1 Business case

3.3 Marketing Expenditure Prioritization to Deliver Marketing Objectives

3.3.1.1 Stakeholder analysis (Mendelow Matrix)

Mendelow Matrix categorized stakeholders based on their power and interest in the initiative. Focus on high-power, high-interest stakeholders who have the ability to influence the direction and success of marketing campaigns. High-power, high-interest stakeholders may require more frequent and detailed updates.