Driving superior return on
marketing investment
CMOs have been under the gun to prove the
value of their marketing programs
Top CMO Challenges
Advertising Age Survey of CMOs 2007
1.
Quantify and measure the value of marketing programs and investments
2.
Improve the efficiency and effectiveness of the marketing organization
3.
Grow customer knowledge, insight and conversations
4.
Improve the allocation and ROI of marketing spend
5.
Extract greater value and profitability from customer relationships
6.
Increase credibility, influence and perceived value with senior management
Chief executive officers are "growing impatient with marketing…They feel that they get
accountability for their investments in finance, production, information technology, even
purchasing, but don't know what their marketing spending is achieving.“
Professor Philip Kotler Kellogg School Of Management
Many avenues being explored to boost
marketing ROI
Current Activities to Improve Marketing ROI
Conference Board Survey: CMOs 12/08
64%
60%
49%
47%
41%
E valuating all
areas of s pending
to inc reas e yield
and ac c ountability
B etter
s egmentation,
profiling and
targeting
s trategies
Add or improve
databas e
marketing
s ys tems
39%
L everaging
E xploring
G reater us e of
exis ting
c us tomiz ed
mobile and
res ourc es to
c ommunic ations internet c hannels
enhanc e
tec hnologies
c us tomer
c ommunic ations
How to drive superior marketing ROI
 Superior understanding of customer value AND business
economics!
Value of product experience
- Utility of experience
- Acquisition cost
- Ongoing cost to use
Perceived value of brand or
company relationship
- Distinction of offering
- Value of past investment
What actually drives customer
demand
Marketing ROI:
Maximization of
value delivered to
customer
(revenue) per
dollar of cost
invested
Business strategy choices:
- Offering design
- Brand strategy
- Channel strategy
- Organizational strategy
Ability to effectively execute
strategy
- Information
- Implementation
choices
- Capabilities
What it costs to address customer
demand under different strategies
Building the Marketing ROI Grid
Next generation
program design
and testing
Superior value
proposition
engineering
Marketing
ROI
Alignment of
organization –
lean sales and
marketing
processes
Marketing
Financial
Measurement
Systems
• Orchestrating state of the art marketing principles and techniques
• Introducing well proven concepts from other disciplines
• Establishing/Enhancing cross departmental thinking
• Implementing a standardized controlling loop
• Mastering the change process
Marketing ROI levers
Marketing ROI increase
Superior value
proposition
engineering
Next generation
program design and
testing
Alignment of
organization – lean
sales and marketing
processes
Marketing Financial
Measurement
Systems
Designing profitable
Identifying program
Optimizing and aligning
Accurately tracking sales
offerings that deliver the
strategies that activate
marketing & sales processes
and marketing investments
highest value to customers
desired customer behavior or
to deliver more value at less
and linking them to metrics
per dollar of cost
perceptions and measuring
cost
of intended and actual
their performance
- Identification of
opportunities to capture
market value
- Escape from the
commodity box
- New value
propositions
- Optimization of
existing offering
design
- New delivery
approaches
- Customer information that
provides insight into
existing needs and likely
future behaviors
results.
- Sales and service processes
that actually deliver
customer value
- Customer behavior tracking
systems
- Program test & learn
processes
- Low cost, and responsive
sales and marketing
processes
- Integration of channel
partners into the marketing
process
- Organizational structures
and incentives that support
customer strategy
- Cost accounting systems
that serve sales and
marketing versus finance
needs
- Clear performance t targets
and measurement methods
- Marketing mix models that
link programs to target
customer behaviors and
corporate performance
(P/L)