the four pillars of profit-driven marketing

ROImarketing

The Marketer’s Challenge

1. Empowered Customers, Splintered Media

2. Organic Growth, Rampant Condition

3. Corporate Demand for Marketing Efficacy & Accountability

why ROI?

-ROI OBJECTIVE-To develop marketing that effectively createscustomer connects and differentiation, and allocatemore of their spending to the places where they haveaccomplished those goals

-ROI CAPABILITY-1. Drives profitable organic

growth2. Aligns marketing with

corporate objectives and creates accountability

3. Enables enhanced creativity4. Represents a new competitive

advantage

BEAR IN MIND!

ROI is a short-term measure of profitability that doesn’t always reflect the entire business case for every marketing event

ROI & the

marketing process&

Insight

CommunicationMeasurement

Creation

ROI

You Deserve A Break Today

Budget: $50,000,000Result: Sales Increased$587mil$1bil$3bil

Arch Deluxe: The Burger With The

Grown Up Taste

Budget: $100,000,000Result: Sales Dropped Considered Flop

ROI calculation

ROI = (VCM x Incremental Value) – Total Spend

Total Spend

The barrier of ROI

1. Data are not readily available2. They can’t create and

routinize the ROI calculation3. They can’t transform ROI into

working knowledge and deploy it

4. They can’t muster the organizational support needed

5. They are unwilling to undertake the journey

The FOUR PILLARS

1. Building Analytical Prowess2. Tools For Transforming Analytics Into Working Knowledge3. Creating Process-Driven Profitability4. Aligning The Organization Around Marketing ROI

Analytic

ROI = (VCM x Incremental Value) – Total Spend

Total Spend

Financial Data

Customer Response Data Incremental Value

1. Spend2. VCM (profitability)

Analytic

1.Behavioral Analytics predict how customers will

respond as marketers runs event

2.Attitudinal Analytics measure customer

opinions, perceptions and self-reported behavior

3.Business Case Analytics require a minimum amount

of data (breakeven analysis)

Decision Support Tools

Special software that transmit complicated analysis into working knowledge

Process-Driven Profitability

The MARKETING ROI process characteristic

Integrated, Shared Goals,Fact Based, Properly Timed

1.Target SettingDecisions are made top down and bottom up Integrating target process with budget

process2.Planning

Reconciliation with initial target3.Execution

ensure to get what we paymaintain flexibilitycollect data around actual event

4.Post-event AnalysisHow well did you do? Why did you get those

results? What will you do differently next time?

Process-Driven Profitability

Organizational Alignment

Organizational Support and Motivation needed to develop and maintain the marketing ROI capability is forthcoming

Undertaking the Marketing ROI Transformation

1.Align with the corporate-valuation strategy for customers and consumers

2.Establish vision3.Create champions4.Pilot Early5.Demonstrate Success6.Maintain momentum and

solidify gains

CASE: KELLOG’s

Trade PromotionBuy 1 Get 1Initial Objectives: Increase Sales VolumeResult: Forward Buying Lower Profit MarginLost: $21mil ”

Kellog’s Trade Promotion ExcellenceFinding: 1.Emphasize on Sales Volume, Careless to calculate the profitabilitySolution:1.Profitable Volume2.Sales Rep Empowerment3.Exploitation of Variation

CASE: KELLOG’s

Kellog’s Trade Promotion ExcellenceResult:- Saved $65mil annually- ROI trade promotion rose 5%-20%- Divert Investment to another marketing channel- ROI Transformation

CASE: KELLOG’s

New product innovations

Brand tie-ins with Monster Inc

kartinitampubolon2009