Returning to the series of posts that from Marketing Culture we are dedicating to the indispensable tools that cannot be lacking in a Marketing Plan due to their importance in decision-making, and once the PEST-E , SWOT , CAME matrix , the Porter ‘s 5 Forces , the matrix market positioning , the performance matrix-importance … is the turn to a tool that not being a parent, is often not included in the plans and that is vitally important: “the Contingency Plan ”. The contingency plan is … ” A monthly projection of adjustments in Syria Email List expenses and income that will allow reaching the budgeted and marked contribution benefit … ” That is, once the quantitative objectives have been set in the Marketing Plan , mainly those of an economic nature (income, contribution margin, benefits, costs, units sold…); once the action plans to achieve these objectives have been designed (action plans that will touch the product, price, communication, customers, distribution …), the KPI’s (critical indicators of our business model) have been established and the scorecard has been developed to control deviations;
It is at this moment when we will establish negative scenarios in which we should act to correct the negative deviations that will prevent the achievement of the objectives set. In short, the Contingency Plan is nothing more than planning concrete corrective actions that counteract and help meet the objectives, in those scenarios in which we are below the fulfillment of objectives. An example to simplify the definition Your sales objective for next year is to achieve an increase of 7.5% over the total sales of the previous year (numerically, invoice 1,250,000 euros); 60% of the total income comes from the sales of your flagship product. As you have prepared the objectives and therefore the sales forecast, you have the total sales that you will obtain by months and by type of product accrued. Are we going well? Okay… let’s continue. If the sales of the star product, after the first three months of the year, are below the established forecasts, let’s say that you are -3.5%. Numerically: “As of March 31, we should have sold 312,500 euros, but we have only billed € 301,563” This would mean that we are moving away from reaching the final goal of € 1,250,000 million. What can we do? We have two options:
From the fourth month to start thinking about what actions to implement to correct the deviation, that is, to sell more units of the star product. Therefore design the action, approval by management, launch and measurement … (we will lose several weeks and sales will continue to fall). 2.- The decrease scenario from -3% in the star product, I contemplated it in the Marketing Plan, I designed the Contingency Plan, so I go to the corrective, approved and predefined actions, and simply execute them . Infinitely eu phone number shorter reaction time, minimized revenue losses. This is having a contingency plan !!!! ” … when the sensitivity analysis results in a negative weighted net total figure, it is necessary to act and prepare a contingency plan ” Advantages of the Contingency Plan The contingency plan will help us to: Identify the key factors on which the estimated expected result is based in order to act. Estimate the probability of concurrency. Minimize the company’s action-reaction times. Contribute to the achievement of the objectives set.