Business Insights

Extracting Business Value

Decomposition analysis transforms statistical output into actionable business insights. This page shows how to translate contribution charts into strategic and tactical decisions.

Purpose: Convert decomposition results into business insights that drive decisions and improve marketing performance.

Strategic Insights

What's Driving Your Business?

Key Questions:

  • Which factors contribute most to KPI?

  • Is it marketing-driven or baseline-driven?

  • How much control do you have over performance?

From Decomposition:

Base-Driven Business:

Base: 60% of KPI
Marketing: 25%
Seasonality: 15%

Insight: Strong organic demand, marketing provides incremental lift

Marketing-Driven Business:

Base: 30% of KPI
Marketing: 55%
Seasonality: 15%

Insight: Marketing is primary growth driver, need consistent investment

Growth Attribution

Identify Growth Sources:

Year-over-Year Comparison:

2023 Total: $5M
2024 Total: $6M (+20%)

Growth Breakdown:
├── Marketing increased: +$500K (50% of growth)
├── Base/organic growth: +$300K (30% of growth)
├── Seasonality stronger: +$200K (20% of growth)

Insight: Marketing drives half of growth, indicating effective campaigns

Marketing Contribution to Business

Calculate Marketing's Impact:

Total KPI Value: $10M
Marketing Contribution: $3.5M
Marketing as % of Total: 35%

Interpretation: Marketing drives 35% of business value

Strategic Implications:

  • Justify marketing budget

  • Demonstrate value to leadership

  • Guide investment levels

Portfolio-Level Insights

Channel Mix Analysis

Current vs. Optimal Mix:

Current Allocation:

TV: 40% of budget → 30% of contribution
Digital: 35% of budget → 45% of contribution
Radio: 25% of budget → 25% of contribution

Insight: Digital is under-invested relative to its contribution

Recommendation: Shift 10-15% of budget from TV to Digital

Efficiency Analysis

Contribution per Dollar:

Channel | Spend | Contribution | Efficiency
TV      | $400K | $600K        | 1.5x
Digital | $300K | $900K        | 3.0x
Radio   | $200K | $300K        | 1.5x

Insights:

  • Digital is 2x more efficient than other channels

  • TV and Radio have similar efficiency

  • Significant reallocation opportunity

Diversification Assessment

Risk Analysis:

Concentrated:

One channel (TV) = 60% of marketing contribution
Risk: High dependency on single channel

Diversified:

Top channel = 30% of contribution
Multiple channels contributing
Risk: Lower, more resilient

Strategic Decision: Balance efficiency vs. diversification

Tactical Insights

Campaign Performance

Identify Successful Campaigns:

From Contribution Spikes:

March Campaign:
Week before: $50K contribution
Campaign weeks: $120K contribution
Lift: +$70K (140% increase)

Insight: Campaign created significant incremental lift

Validation:

  • Does timing match known campaigns?

  • Is lift proportional to investment?

  • How long did effect last (adstock)?

Timing Optimization

When Marketing Works Best:

Seasonal Analysis:

Q1: Media ROI = 1.5x
Q2: Media ROI = 2.0x (best)
Q3: Media ROI = 1.8x
Q4: Media ROI = 1.2x (holiday competition)

Insight: Q2 is most efficient period for marketing investment

Application: Shift budget to Q2 for better returns

Budget Allocation

Optimal Distribution:

Based on Contribution Analysis:

Current Budget: $1M total

Recommended Reallocation:
TV: $400K → $300K (-$100K)
Digital: $300K → $450K (+$150K)
Radio: $200K → $150K (-$50K)
Events: $100K → $100K (maintain)

Expected Impact: +$200K in incremental KPI

Operational Insights

Resource Prioritization

Where to Focus Team Efforts:

High Impact, High Control:

  • Digital optimization (largest opportunity)

  • Campaign timing (easy to adjust)

High Impact, Low Control:

  • Seasonality (prepare, can't change)

  • Competitor activity (monitor, react)

Low Impact:

  • Minor channels (maintain or cut)

  • Test opportunities (small scale)

Performance Benchmarking

Compare to Expectations:

Channel | Expected Contribution | Actual | Variance
TV      | $500K                | $600K  | +20% ✓
Digital | $800K                | $900K  | +12% ✓
Radio   | $400K                | $300K  | -25% ⚠️

Insights:

  • TV and Digital outperforming

  • Radio underperforming - investigate why

  • Adjust expectations or strategy

Trend Identification

Growing vs. Declining:

6-Month Trend Analysis:

Digital:
Jan-Mar avg: $250K/month
Apr-Jun avg: $350K/month
Trend: Growing +40%

Radio:
Jan-Mar avg: $80K/month
Apr-Jun avg: $60K/month
Trend: Declining -25%

Strategic Response: Double down on Digital, reconsider Radio

Insight Development Framework

Step 1: Observe Patterns

  • What stands out in the decomposition?

  • Largest contributors?

  • Unexpected results?

Step 2: Ask Why

  • Business explanation for patterns?

  • Align with known activities?

  • External factors at play?

Step 3: Quantify Impact

  • How much contribution?

  • What's the ROI?

  • How does it compare?

Step 4: Identify Opportunities

  • What can be optimized?

  • What should change?

  • What to test?

Step 5: Make Recommendations

  • Specific actions

  • Quantified expected impact

  • Implementation plan

Common Business Questions Answered

"Is our marketing working?" → Compare marketing contribution to spend, calculate ROI

"Which channels should we invest more in?" → Rank by ROI and contribution, identify high performers

"Where are we wasting money?" → Find low/negative ROI channels, underperformers

"How much should we spend on marketing?" → Analyze diminishing returns, optimal spend levels

"What drives our seasonal patterns?" → Decompose seasonality contribution, identify drivers

"Why did sales drop last month?" → Compare contributions month-over-month, find changes

Storytelling with Decomposition

Build Narrative:

  1. Set Context: "Our KPI grew 20% this year..."

  2. Show Drivers: "Marketing drove 50% of that growth..."

  3. Highlight Winners: "Digital was our top performer with 3x ROI..."

  4. Identify Opportunities: "We can add $200K by reallocating from TV to Digital..."

  5. Call to Action: "Recommend shifting 15% of budget starting Q3..."

Use Visuals:

  • Decomposition charts

  • ROI comparisons

  • Trend lines

  • Before/after scenarios

Communicating to Stakeholders

For Executives:

  • Focus on total business impact

  • ROI and efficiency metrics

  • Strategic implications

  • Budget recommendations

For Marketing Leadership:

  • Channel-level performance

  • Campaign effectiveness

  • Mix optimization

  • Tactical adjustments

For Channel Teams:

  • Specific channel contributions

  • Performance vs. benchmarks

  • Optimization opportunities

  • Detailed recommendations

Action Planning

From Insights to Actions:

Prioritize by Impact:

  1. High impact, easy to implement (do first)

  2. High impact, hard to implement (plan carefully)

  3. Low impact, easy (quick wins)

  4. Low impact, hard (deprioritize)

Example Action Plan:

1. Shift $100K from TV to Digital (Q3) - High impact, easy
2. Test new promotional strategy (Q3) - Medium impact, easy
3. Optimize Radio messaging (Q4) - Medium impact, moderate
4. Evaluate new channels (2025) - High impact, hard

Track Results:

  • Monitor post-implementation

  • Measure actual vs. expected impact

  • Iterate and refine

Summary

Key Takeaways:

Decomposition Tells You:

  • What's working and what's not

  • Where value is created

  • How to optimize

Good Insights Are:

  • Specific and actionable

  • Quantified (dollars, percentages)

  • Connected to business strategy

  • Validated by business knowledge

Next Steps:

  • Extract specific insights from your decomposition

  • Validate with stakeholders

  • Develop action plans

  • Implement and monitor

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