the four pillars of profit-driven marketing
DESCRIPTION
This is the summary of a book "The Four Pillars of Profit-Driven Marketing" written by LeslTRANSCRIPT
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
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