Presentatie voor controllers over marketing accountability. Over het meer transparant maken van uitgaven/investeringen in marketing en de resultaten die hieruit voortkomen.

1. Grip op de
marketing
performance
Ed Peelen

2. 2

3. Agenda
> Marketing accountability: where do we stand and
what are the consequences?
– Frequently used metrics
> Marketing map: towards an organization specific
model
– Strategic and operational aspects
– Assets
– Relating activities, resources to results
– Risk
> Interface marketing – control
3

4. Current status?
Effectiveness of controls by function
4
0 10 20 30 40 50 60 70 80 90 100
finance
customer service
manufacturing
supply chain
sales
R&D
marketing
marketing
finance
Source: Shaw and Frisk

5. Current status?
Budgets most likely to be cut by finance
5
0
5
10
15
20
25
marketing HR Training R&D IT
Series1
Source: KPMG

6. Current status?
>Marketing driver of business success?
>Crises of confidence at the top?
>Marketing budgets are cure more than any
other
>Marketing spending is volatile, swinging up
an down year-to-year
>Marketing controls need overhaul
>Marketing resistance to controls
6
Source: Shaw and Merrick

7. Current status?
>Accountability
– 20% of the expenditures are responsible for
80% of the results?
>Decision making
– Fact based or a ‘damn good story’ to influence
decision making?
7

8. Current status?
Marketing metrics
> Share of Hearts, Minds, and Markets
> Margins, Profits and Return on Investments
> Product and Portfolio Management
> Customer Profitability
> Brand Value
> Sales Force and Channel Management
> Pricing Strategy
> Promotion
> Advertising Media and Web Metrics
8
An overview and a detailed discussion of
every marketing metric you'd ever want to
know.
What are the key
metrics you use to
monitor marketing
performance?

9. Current status?
The magic numbers? Non financial…
9
0 10 20 30 40 50 60 70 80 90
awareness
market share
relative price
# complaints
satisfaction
availability
# customers
perceived quality
loyalty
relative perc. Qual.
% use
% reach board
% top rating
Source: Ambler

10. Marketing map
10
Define
market and
understand
value
Determine
value
proposition
Get market
Deliver
value
proposition
Monitor
value
Asset
base
Strategic zone
Operational and
Measurement zone

11. Marketing map
11
Define
market and
understand
value
Determine
value
proposition
Get market
Deliver
value
proposition
Monitor
value
Asset
base
Strategic zone
Operational and
Measurement zone
Operational efficiency is
usually a necessary but
insufficient condition for
creating shareholder value
and so strategic effectiveness
becomes important

12. Marketing map
12
Define
market and
understand
value
Determine
value
proposition
Get market
Deliver
value
proposition
Monitor
value
Asset
base
Strategic zone
Operational and
Measurement zone
Developing marketing
expenditure is aimed at
increasing the value of
marketing assets such as
brands, customers relations
and channels of distribution
Maintenance marketing
Building a market

13. 13

14. 14

15. Marketing map
15
Define
market and
understand
value
Determine
value
proposition
Get market
Deliver
value
proposition
Monitor
value
Asset
base
Strategic zone
Operational and
Measurement zone
An objective
assessment of
whether or not
the strategy
will create or
destroy
shareholder
value, how to
improve
The likelihood of
tactics and operations
to create the necessary
competitive advantage
in each segment and to
achieve objectives

16. Marketing map
Relating activities and resources to results
Strategy
Tactics and operations
R
W
Right (R) Wrong (W)
Doing the right things right

17. Calculating Customer Value
An example of a Customer Life Cycle Profit Pattern in the Credit Card Industry
-80
40
66 72
79
87 92 96 99 103 106111116 120124130
137142148 155161
-100
-50
0
50
100
150
200
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Years
Profitin$
Source: Reichheld

18. Impact of a 5% retention increase on
Customer Net Present Value
Software
Publishing
Officebuilding
management
Lifeinsurance
Industrialdistribution
Creditcard
Advertisingagency
Industrialbrokerage
Branchbankdeposits
Auto/Homeinsurance
Autoservice
Industriallaundry
0
10
20
30
40
50
60
70
80
90
100
Industry
Loyalty
pays off?
Source: Reichheld

20. Customer value map
Fair value zone
Worse value
Better value
Relative
price
H
L
L
1.0
HRelative quality
1.0
X
X
X
X
X
X
X

21. © ICSB,
0
20
40
60
0
10
0
250
ILLUSTRATION
Moving 4 week data
Awareness Index
GRPs
7
2
Claimed recall
Model estimate.
Base level
77
10
Campaign A Campaign B
2½ years
AWARENESS INDEX
The % increase in awareness
at 100 GRP’s
Campaign B generates 3x as
Much advertising recall as
campaign A
BASE LEVEL
Result of past activities

22. Efficient Promotion
0
50000
100000
150000
200000
250000
300000
w1 w2 w3 w4 w5 w6 w7 w8 w9 w10 w11 w12 w13 w14 w15
exfact
exdc
scan
Source: Nielsen

23. Managing the sales process
New customer acquisition
1/15 1/5 1/3
Order
115 3+/- 250
1- st
visit
Various
tools
Finance
Database
225.000
- KvK
- Comp Profile
- Eigen bestand
Telemarketing
Lead info
enrichment
Salesman
selects
-Postcode
-10-15 empl.
Call for
Appoint
ment
Training
Quotation Call Negioti
ating
Standard
Quote
Training
skills
Sales Lead Time 10 weeks

24. Marketing map

25. Marketing model
>Relating resources, efforts to results
– Distinguishing factors affecting the demand,
the final result
– Time lag
– Indirect effects: economy, competitors,
consumer trends
– Optimum
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26. Risk assessment (quantification)
> Market risk
– Product category, market existence, sales
volume, forecast, pricing
> Share risk
– Target market, proposition, swot, uniqueness,
future
> Profit risk
– Profit pool, profit source, competitor impact,
internal gross margin, other
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Sensitivity to risks differs; depends on
growths, market share, margins, competition
Normally, generating growth in sales revenues and
profits leads to an increased risk profile in mature
markets and for mature products

27. Risk assessment
>How to handle risk:
– Adjusting the discount rate for risk?
>Type of risk:
– Potential damage to investment results
– Potential damage to existing assets!
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28. Organizing for the interface between
controling and marketing
>Policeman
>Supporter, coach, advisor
>Complementing each other
>Informing, coordinating, decision making,
monitoring
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