Cashrewards: A Scenario Modelling Tool for Testing Growth Initiatives
Wiseworth Financial Modelling and Advisory built a scenario modelling tool for Cashrewards, an Australian cashback platform. The tool measured the impact of changing individual business drivers against the base case, including potential go-to-market initiatives. It allowed the business to adjust its advertising spend and target its marketing more effectively.
FAST FACTS
Client: Cashrewards
Location: Sydney, New South Wales
Services: Scenario and sensitivity analysis
Model type: Scenario modelling tool built around the company's driver tree
Outcome: Adjusted advertising spend and more effectively targeted marketing
Website: cashrewards.com.au
Engagement year: 2023
ABOUT THE CLIENT
Cashrewards is a cashback website that allows customers to receive cash rewards for shopping at retail stores around Australia.
THE CHALLENGE
Cashrewards had limited forecasting and business planning capacity and no means to test different business scenarios.
The commercial finance team was new. As Zelma van Woerkom, Chief Financial Officer, put it, the team was in its infancy, with no structured processes or reports available for scenario analysis. Decisions about where to direct spend were being made without a way to model what each option would do to the base case.
WHAT WISEWORTH BUILT
Wiseworth built a scenario modelling tool that let Cashrewards test the effect of changing different business drivers, including potential go-to-market initiatives.
The tool was structured around the company's existing driver tree. Rather than modelling the business as a single set of outputs, it isolated individual elements of the tree so the team could see what movement in any one of them did to the base case.
Mark Jeanes learned the commercials of the business alongside the Cashrewards team while building out the prototype at the same time. Working in parallel meant the team could see the tool taking shape against their own numbers early, rather than waiting for a finished build to find out if it fit.
THE RESULT
The results allowed the business to adjust its advertising spend and target its marketing more effectively, ultimately resulting in an increase of 17% in gross merchandise value and 8% increase in gross profit.
IN THE CLIENT'S WORDS
"Our commercial finance team was in its infancy, with no structured processes or reports available for scenario analysis.
Mark's easy-to-use and dynamic tool determined the impact to the base case of different scenarios on different elements of our driver tree.
He hit the ground running, learning the commercials of the business with our team, while simultaneously building out the prototype, instilling confidence early on.
Mark remains a trusted business partner."
Zelma van Woerkom, Chief Financial Officer, Cashrewards
FREQUENTLY ASKED QUESTIONS
What is a driver tree?
A driver tree breaks a business result down into the individual inputs that produce it, so each one can be traced and adjusted separately. Modelling against a driver tree lets you see which specific lever moves the outcome, rather than only seeing the total change.
What is a scenario modelling tool?
A scenario modelling tool measures the impact of changing one or more assumptions against a base case. It answers what happens if a particular driver moves, and by how much, without rebuilding the forecast each time.
Is a scenario tool the same as a full financial model?
No. A scenario tool tests the effect of changing drivers against a base case. A full three-way financial model forecasts profit and loss, balance sheet and cash flow as linked statements. Wiseworth will typically build a three-way model WITH a scenario tool.
Can a scenario model be built before a finance team has structured reporting in place?
Yes. Cashrewards had no structured processes or reports available for scenario analysis when this tool was built. The tool was built alongside the team as they worked through the commercials of the business.
Who builds the model?
Mark Jeanes builds every Wiseworth model personally, from the first assumptions sheet to the last balance check. He spent 20 years at NAB, ANZ, Banque Paribas and Deutsche Bank before founding Wiseworth.
RELATED SERVICES
Written by Mark Jeanes, Principal, Wiseworth Financial Modelling and Advisory
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