The World's Most Truthful System

for Early Stage Innovation Sales Forecasting

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Key definitions for truth teller - powered by Merwyn Technology model

AS -  Annual Sales   This is consumption sales.  Or, said another way,  the amount of revenue received from sales that went to Final Decision Makers.  This does not include sales that are in process such as “pipeline”, or “inventory fill” associated wth distributor or retailer inventory.

FDM - Final Decision Makers. Final Decision Maker can be end users such as consumers or they can also be decision makers such as factory production managers, architects, doctors, etc. This term is used in place of the classical definition of number of consumers to make Truth Teller applicable for industrial and business to business situations. In the case of Truth Teller this value is the number of “POSSIBLE” Final Decision Makers NOT the net number that will purchase.  The number of actual purchasers is calculated by the Truth Teller Model.

TR - Trial Rate
The percentage of Final Decision Makers who will make an initial purchase.  This number is calculated from the persuasive power of the idea itself as measured by concept testing adjusted for marketing support as measured by percent Awareness and percent Distribution.  In the case of Truth Teller these values are customized for each company based on it’s history.  Concept testing is based on benchmarking the potential for “customer pull” by evaluating the description on 50+/- factors that have each been found to correlate with marketplace trial at the 95% confidence level or higher.  The concept score is translated to actual percent trial using an algorithm developed and confirmed through three independent data sets.  The percent trial value is discounted based on the appropriate awareness and distribution levels.

FPR -  First Purchase Revenue
This is the amount that a Decision Maker will purchase the first time they purchase.  For example if you were selling tires the Final Decision Maker might purchase 2 tires or 4 tires.   Or 50% of customers might purchase 2 tires and 50% might purchase 4 tires thus the AVERAGE purchase would be 3.   In this case, if tires cost 50.00 each the MOST LIKELY estimate of First Purchase Revenue would be 3 x $50 = $150.

RR – Repeat Rate
The percentage of Final Decision Makers who will make a second purchase within 12 months of their first purchase. Examples of repurchases include:  1) If the innovation is an industrial or consumer consumable such as a cleaning product then final Decision Maker may purchase multiple times, 2) If the innovation is an industrial production product then Final Decision Makers might purchase a sample of it to test leading to a larger purchase order and 3) If an innovation is an industrial machine their could be a separate service contract or supplies for the machine. With many industrial products or consumer hard goods repeat rate is zero as the first purchase is the only purchase.

RPR – Repeat Purchase Revenue The revenue received when Final Decision Makers make additional purchases. This can be the same number as FIRST PURCHASE revenue; however, it doesn’t have to be.  For example – many times a Final Decision Maker will buy a small amount first to try out a product then buy more on an on going basis.  Or, sometimes the first purchase is for the equipment and the repeat revenue is for supplies or a service contract.

NRP – Number of Repeat Purchases The number of repeat purchases that are estimated to be made within a 12-month period of time.
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