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How to measure and improve your marketing performanceThe road to Performance driven Marketing Bringing the hard science into marketing
February 2009www.thom.eu
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2
Source: Marketing NPV
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Measuring return is the solid n°3 challenge for Belgian marketeers
33
0,00% 1 0,00% 2 0,00% 3 0,00% 4 0,00% 5 0,00%
43%Differentiate from competition
Building customer loyalty and trust
Measuring return on marketing efforts
Building a strong brand
Communicating through online media
Innovation, Product development & R&D
Increase the efficiency of marketing processes
Identifying all customer’s “moments of truth”
Realizing an integrated communication-mix
Integrating online & offline marketing initiatives
38.5%
38.4%
37.3%
36.3%
35.1%
32.5%
30.3%
30.2%
28.5%
% of respondents
Not in 2007 Top 5Legend:
In 2007 Top 5
Source: The House of Marketing 2008 Yearly Marketing Survey, Belgian marketing community, N=714 respondents
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Marketing challenges 2004 2006 2007 2008
Differentiation from competition
Building customer loyalty and trust
RoMI
Communicating through online media
Building a strong brand
Innovation
Efficiency of marketing processes
Knowing all customers’ moments of truth
Realizing an integrated communication mix
1
n.a.
1
4
7
6
n.a.
4
n.a.
2
1
3
8
4
6
7
8
5
1
2
6
5
4
3
9
8
7
1
2
3
4
5
6
7
8
9
Ranking of marketing challenges (according to % of occurrence)2005
2
8
3
1
n.a.
6
n.a.
9
n.a.
…just as it has been over the past 5 years
Source: The House of Marketing 2008 Yearly Marketing Survey, Belgian marketing community, N=714 respondents
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Marketing still has little impact in the boardroom
5
Respondents(%)
Totalsample
100% 41.6%
24.9%
22.9%
4.5%2.3% 1%
Sales Marketing Finance Production R&D HR
According to you, which department has the biggest impact in the boardroom?
2.9%
Others
Source: The House of Marketing 2008 Yearly Marketing Survey, Belgian marketing community, N=515 respondents
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To improve boardroom impact, marketeers need to measure and display the return on marketing efforts
0
Label 1
Label 2
Label 3
0
Label 1
Label 2
Label 3
6
What should be improved to increase marketing impact in boardroom?(1)
What should be improved to increase marketing impact in boardroom?(2)
Better metrics
Make results visible
Better communication
Marketing orientedness board
Network with other departments
Boost financial skills
Techical product knowldge
51.7%
38.2%
37%
26.9%
22.5%
20.4%
11.1% 12.5%
12.5%
21.1%
20.4%
23.4%
46.9%
35.2%
32%
60%0%0% 60%N = 387 N = 128
Boost financial skills
Techical product knowldge
Network with other departments
Marketing orientedness board
Make results visible
Better communication
Better metrics
(1) Measured among respondents who think marketing has the biggest impact(2) Measured among respondents who think marketing does not have the biggest impact
Source: The House of Marketing 2008 Yearly Marketing Survey, Belgian marketing community, N=515 respondents
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Even CEOs confirm the importance of these metrics and communicating results
7
0
Label 1
Label 2
Label 3
What should be improved to increase marketing impact in boardroom?
50%
38.3%
36.2%
26.6%
20.2%
16%
14.9%
0% 60%
Better metrics
Make results visible
Better communication
Marketing orientedness board
Network with other departments
Boost financial skills
Techical product knowldge
Source: The House of Marketing 2008 Yearly Marketing Survey, Belgian marketing community, N=94 respondents
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Using financial ROI pays off
8
Companies with sound ROI management expect to outgrow competition(1)
Marketing departments able to prove return get higher allocated budgets(2)
ROI not used
ROI used
To what extent do you expect to outgrow your
competition?
% respondents(TOP 2)
42%
66%
To what extent is sufficient budget allocated to the marketing department?
ROI not used
ROI used
% respondents(TOP 2)
29%
51%
Sources:
(1) Lenskold 2008 Marketing ROI & Measurement study
(2) VisionEdge Marketing MPM Survey 2008
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Typical issues that indicate ROMI interest
• High marketing budget but no financial evaluation on return of the various marketing activities is done
• Quantification of marketing performance lacking to steer decision process. Quantified priority setting for new campaigns is needed
• Interest to revise marketing budget allocation process: to be based on expected return rather than percentage of revenues or last year’s figure. Difficulties to convince CFO/CEO to approve planned marketing activities
• Challenge to balance short term sales objectives versus long term strategic brand positioning objectives
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From our experience, companies facefive challenges to improve marketing performance
1. Aligning marketing metrics with business objectives 2. Balancing brand building & sales conversion 3. Calculating Marketing ROI, report & assess 4. Accessing the right data & bridging data gaps5. Setting up the right capabilities within your organization
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ResultsObjectives
Data management & Measurement
Capabilities
Do
CheckPlan
MarketingActions
3
1
4
3
5
2
12
3
45
Boost your efficiency & increase customer value by addressing these challenges
Source and © The House of Marketing 2009 www.thom.eu
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The House of Marketing’s approach in marketing performance
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Gap analysis of marketing effectiveness vs. best in class:
• Customer interview checklists• Scoring & benchmarks• Identification of improvement areas
360° QuickScanStarting
point
Dashboards
Strategic model mapping brand position to value creation:
• Interviews• Data collection & data mining• Analysis of strategic options
Value Capturing
Quantify return & prioritize marketing campaigns & projects:
• Define business objectives• Calculate costs & investments• Decide metrics to use• Build the ROI model
Marketing ROI
Source and © The House of Marketing 2009 www.thom.eu
Define performance metrics:
•Define business objectives per department and process•Define dashboard structure and KPI, targets to reach and measurement process•Monitor performance
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The House of Marketing has a unique approach by combining a holistic marketing view with in depth quantitative modeling.Based on its unique position in the market, combining marketing and consulting expertise, The House of Marketing is perfectly placed to offer ROMI
• Holistic marketing view to link Marketing Performance to strategic objectives, segmentation and go to market planning
• Analytical skills & quantitative comfort to select the metrics that matter, to bridge data gaps and to build financially sound models
• Specific in-house expertise backed up by a solid financial background with proven impact for clients across B2B and B2C sectors
• Neutral, unbiased view, unlike competitors such as SW vendors or advertisement agencies
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For more information on marketing performance management, contact
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Johan [email protected]
+32 (0)496 55 12 26
The House of Marketingwww.thom.eu
To receive a copy of our 2009 Yearly Marketing Survey, please register as a member on www.mingle.be
(you will receive our Marketing Buzz newsletter)