Best practice in initiative creation
Initiatives should ideally reflect changes you are planning to make to your revenue engine during your plan period, backed up by a concrete initiative so you can assign direct responsibility for executing this initiative.
For realistic planning, initiatives should be applied to your input metrics or your processing metrics. As these are the elements of your engine that your organization can actively make a change to.
What if you don’t know what you will be doing later in the year? For longer-term planning, creating initiatives backed up by a concrete step by step plan can be difficult. In those situations, initiatives can be used to set expectations towards a part of the business, e.g. :
- 10% increase in Inbound Leads by end Q3
- 5 extra partner leads per month
This ensures alignment around what is needed to hit the plan goal and gives the responsible leader a specific goal before concrete initiatives have been formalised.
As you get closer to the period where the initiative are expected to take effect (impact period), the original initiative can be replaced with more concrete details from the channel leader allowing you to clearly identify whether the planned initiatives are adequate to hit the Plan Goal.
What are the different initiative types?
There are 2 different initiative types, Add/Subtract and Set:
Add/Subtract
Add (or subtract) the value to the current value for each month. You can:
Use an absolute value - e.g. 20, 5, 50.5
Use a percentage change
Set
A set initiative overwrites the current value. Essentially, you can view this as an broad assumption that the metric will perform at this level. Creating Plans using the "Set Initiative” should only be used to create an assumption-based projection, where you don‘t want to use past actuals to calculate future performance (projection). If an initiative has been created using "Set”, the projection will always assume that the full impact of the initiative will come true for the remainder of the plan regardless of past performance.
How do I add an initiative?
You can add an initiative in 2 ways:
- Navigate to the Actions Tab and select Add new initiative (bottom left)
- In the Engine view, select any metric to open the Details view and select the Add new initiative button located under the graph & table. When creating an initiative from a specific metric in the Engine View, the Initiative Creation form will automatically preselect the filtering applied in the Engine View.
The Create/Edit initiative form
The Relative change (first line of the table) is your input to the initiative and reflects the difference to the input from the prior month. In the example above:
- June is adding 1000 more leads than May
- July to September are also increasing by 1000 each month
- October to December are staying at the same level, an additional 4000 on top of the Current value
The Total change (second line of the table) is the overall change you are expecting each month as the result of this initiative.
- Refer to the Total added leads in the top section of the form to see the sum of the total change: 22k
Estimated Revenue Impact
The Estimated revenue impact of an initiative is calculated by the difference of the new projected revenue on this metric minus the current value of the projected revenue.
Opps x CVR x ACV Current projection 100 x 20% x $300 = $6000 Initiative increases CVR to 30% New projection = 100 x 30% x $300 = $9000 Estimated revenue impact: $3000 ($9000 - $6000)
Where there are multiple initiatives that apply to part of the same funnel, then initiatives create Shared and Isolated estimated revenue impacts.
Examples of Initiative Creation
- Increase overall CVR to 20%
I plan to increase my overall conversion rate to 20% in July. The effort to achieve this goal will be concentrated throughout July. From there on, I expect no additions (or reduction) to the conversion rate each month.
- Ramp to an increase of 4000 leads
I aim to increase my leads by 1000 each month from June to September, giving an overall increase of 4000 after the ramp period. After that, I expect to stay at 4000 leads above my current projected value for leads.
I know that if my project does not bring the additional 4000 leads by September, the final quarter will not achieve the planned values.
- Set ACV
Here I want to plan for an Outbound ACV of $7000. Even if my actuals do not hit $7000 during Impact period, I want to have the assumption of a $7000 ACV in my projections.
- Marketing campaign
I will run a marketing campaign in the US to increase leads during the period of September to November. I expect 10% increase in September, another 10% increase on top of that in October, and then November I expect to mirror the same results as October.
🎥 Watch our video tutorial to see Initiative (actions) creation. We will walk you through each step, and real-world examples. Click here to watch the video now.