Customer Success Stories: Leveraging Marketing Mix Modelling on International Design Market: Case Finnish Design Shop

Finnish Design Shop was established in 2004 with the mission to make high-quality Finnish design accessible worldwide. Embracing the principles of functionality and simplicity that are the hallmarks of Finnish design, the founders envisioned an online store dedicated to offering both big and small Finnish design goods to an international audience. From its start, Finnish Design Shop has adhered to two core criteria for its products: excellent design and top-notch quality. Despite the challenges of the early days of e-commerce, the store quickly attracted fans of Finnish design. Initially operating from a small studio where packing and distribution took place, the company expanded its selection over the years to include products from all over Scandinavia, responding to customer demand while maintaining high standards of quality and design.

Key Highlights:

• The world's largest online store for Nordic design (home decoration & furnishing)
• Founded in 2004
• Headquarters, logistics center, and showroom in Turku, Finland; second office in Helsinki, Finland
• Ships to over 180 countries
• Revenue approximately 65 MEUR (2022)

Why did Finnish Design Shop decide to implement a Marketing Mix Modeling tool?

Finnish Design Shop decided to implement Sellforte’s Marketing Mix Modeling tool to address two main challenges: the need for more objective data and the complexity of the budgeting process.

Firstly, the need for more objective data was a paramount goal for Finnish Design Shop. Previously, the company relied on three primary data points: their own sales data, Google Analytics data, and the advertising channels' own reporting systems. However, these sources often showed biased information, each trying to take maximum credit for sales. This lack of objectivity made it difficult to accurately assess the effectiveness of each advertising channel. For example, comparing the impact of Google Ads to Pinterest Ads based solely on these data points did not provide a clear picture of which channel drove actual incremental sales—the portion of sales that would not have occurred without the advertising. Therefore, MMM was necessary to provide a more objective and reliable dataset, which enabled Finnish Design Shop to make more informed decisions about the effectiveness of their marketing channels.

Secondly, the complexity of the budgeting process was a significant challenge in itself. Finnish Design Shop operates with an annual top-line budget, which is divided monthly. Each month, they need to plan the budget split for the next month, considering past performance, upcoming campaigns, and overall goals. This process involves not only allocating budgets across different channels but also within those channels, deciding how much to spend on various campaign types and funnel steps. For example, within Google Ads, they need to distribute the budget among PMax, search, brand search, generic search, and other campaign types. Making these decisions without having trustworthy data often led them to rely on best guesses or industry best practices, which were not always enough. This challenge is further complicated by the need to repeat the process for all markets or regions in which they operate, multiplying the complexity. Sellforte helped streamline this process by providing reliable data, which made it easier to allocate budgets effectively and maximize incremental sales.

Essentially, Finnish Design Shop's decision to implement MMM was driven by the need for objective data to accurately evaluate marketing channel effectiveness and to simplify the complex budgeting process. Sellforte enabled them to make more informed decisions and optimize their marketing investments across various channels and regions.

Learnings & Key Outcomes: How has Marketing Mix Modeling changed Finnish Design Shop's marketing planning and media mix optimization process?

Implementing MMM has significantly improved Finnish Design Shop's marketing planning and media mix optimization processes. One of the main changes has been the simplification of the budgeting decision making process. Sellforte has provided a more streamlined and trustworthy method for marketing budget allocation and made the overall process faster and easier.

As previously mentioned Finnish Design Shop had to rely on various data sources such as Google Analytics and the advertising channels' own reporting systems. These sources have often shown conflicted information which made it difficult to determine the true effectiveness of each channel. MMM, while not claiming to be the absolute truth, provides a balanced perspective that falls between the extremes often shown by the other data sources. This balance has given the marketing team confidence and peace of mind, allowing them to make informed decisions without constantly questioning the reliability of their data.

Another strength of MMM is the reporting because MMM is a great way to simplify this process. Instead of consulting multiple sources, the team can now quickly gain a clear understanding of the performance across different channels by referencing a single, consolidated view known as the Sellforte Dashboard.

In terms of marketing budget allocation, MMM’s planning capabilities have proven to be invaluable. MMM allows the team to input their media budget and receive recommendations on how to allocate it across various channels, regions, and campaign types to maximize incremental sales. For example, if the reporting shows that Pinterest is outperforming Meta in specific markets, the tool can suggest how much budget to shift between these channels. Nevertheless, these are recommendations therefore, it is not suggested that they are to be followed blindly. However, they provide a strong starting point for further refinement using the team's expertise and alignment with business goals.

Additionally, MMM offers scenario planning, which is crucial for strategic budgeting decisions. The team can create different budget scenarios, such as increasing or decreasing the budget by a certain percentage, and see the projected impact on sales and return on ad spend (ROAS). This function in the tool makes it easy to evaluate the potential outcomes of various budget allocations and supports data-driven discussions with upper management and other stakeholders.

Should you build an in-house solution or buy from a SaaS vendor?

Deciding whether to build an in-house MMM tool or buy one from a SaaS vendor can be tough. There are pros and cons to both options. Building in-house allows for customization but takes a lot of time and resources. On the other hand, buying from a SaaS vendor is usually faster and provides a ready-to-use, state-of-the-art solution, making it a convenient choice for many businesses.

To find out more, check out our live webinar with Finnish Design Shop here.

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