Sales Gap Between Top-Down vs. Bottom-Up Assumptions

After you set your Top-Down and Bottom-Up sales assumptions (and both methods are active), this section allows to you 1) assess the sales gap (if any) between those two estimates and 2) quickly close the gap with one click.

The first table in this section compares the outcomes of your top-down and bottom-up sales estimates. The differences are highlighted in green if Bottom-Up outperforms Top-Down; they are highlighted red if Top-Down outperforms Bottom-Up.

If your Top-Down assumptions outperform you Bottom-Up assumptions in any year, the model will recognize a sales gap. At this point you have three options if you want to align your Bottom-Up estimates with your Top-Down estimates and eliminate the sales gap:

1. Revisit your Top-Down sales assumptions and adjust the starting number of sales and/or growth percentages.

2. Revisit your Bottom-Up sales assumptions and manually adjust sales outcomes in one of the five sales funnel strategies.

3. Click the checkbox to "Automatically Increase Paid Ads to Close the Gap"

Choosing option #3 will, as the name indicates, automatically increase paid ad spend to increase sales enough to meet the sales outcomes predicted in your Top-Down estimate.

The upper part of the table pictured above summarizes the annual outcomes of your sales funnel methods, including the number of repeat sales generated by those methods. If SaaS or subscriptions is your primary revenue model, the Repeat Customers row will be blank because subscribers do not "repeat"; renewals are driven by assumptions in the subscriptions section.

The last three rows of this table (in blue text) are calculated based on the sales gap and the CPC and CVR assumptions entered in the Paid Ad Campaign Funnel Assumptions section above.

Note that the assumptions in the Paid Ad Campaign Funnel Assumptions will apply regardless of whether the Paid Ad sales funnel is active or not. If you did not previously activate this sales funnel, return to the Bottom-Up sales assumptions section, activate the Run Paid Ads option, and enter your assumptions for CPC and CVR. This will ensure that the automatic calculation for eliminating the sales gap is generating an accurate forecast.

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Continue to the COGS for Virtual Products and SaaS or COGS for Physical Goods to set up your direct costs for delivering products and services. Or head back to the Guidance page.