Case Studies

Data business uses our financial model and improves its value 7-fold

In advertising and promotion, intuition of what strategies will work is no longer sufficient. Trackable, quantifiable results are the way to invest wisely and maximise return on investment for a marketing budget.

Data2Decisions is, says founder, Paul Dyson, a global marketing effectiveness consultancy. It takes a client’s data, typically sales information, such as pricing, promotional activity, and builds statistical models of that data to identify the effects (success or otherwise) of pricing, promotional periods and advertising.

The models can identify which piece of creative advertising worked best, and why. Clients can allocate funds to the different advertising channels, social media choices, which are proven to be the most effective for that brand or strategy – taking the guesswork out of the investment and maximising the revenue spend. Some clients have a few KPIs (Key Performance Indicators), for example, brand awareness, whereas others may be 20–25 KPIs to measure.

As well as supplying the composition of sales leads, the consultancy also works in-house with clients such as British Gas, to build their own intelligent marketing units, using the company’s software tools under licence.

Dyson had worked in marketing since 1985 where marketing consultancies were purchased by media agencies, leaving few independent companies by the turn of this century. The company was established in 2001, beginning, says Dyson, “with a laptop and a spare bedroom”. After 11 years, the company had grown to the size that could be sold. FD Solutions was recommended as a resource and Ian Parlane became Data2Decisions’ Financial Director. He was employed between one to four days a month to address the company’s financial systems. He produced accounts in preparation for the sale and monthly plans to monitor if the company was on target.

Appropriately, the concept of measuring was introduced with a financial model. Dyson recalls “Ian introduced us to financial KPIs to see if we were recruiting the right number of people and right grade. Ian kept pointing out there were not enough senior people. . . We were pleased – we had a lot more information, more readily available, and someone to give financial advice on running the company”.

“The time at which to sell was a difficult decision,” says Dyson. “We needed to have accelerating growth, but didn’t want to exit too soon . . . Timing the right point was vital and the financial information helped. As statisticians we were able to identify models of own turnover and use this to make our forecast.” When all the advice was taken into the account, the decision was made to sell at the end of 2010/2011.

In addition to the monthly accounts, and a significant role in putting together the Information Memorandum, the role of FD Solutions was “vital during the period of due diligence,” says Dyson, providing in-depth analysis of financial data, recent performance and forecasts. He goes on to explain, “Due diligence is done by management consultants or an accountancy-based company, so having someone talk the same language, and understand questions they were asking us was important”.

After considering five offers, the company sold to Aegis Media.

In conclusion, Dyson says “It was vital to have FD Solutions for the final accounts, to determine the final price, and the combination of profit and cash payment”. In fact, Data2Decisions continued to employ Parlane as a Financial Director for a further 18 months after selling to Aegis Media