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1
TM
“Integration-Driven ROI in A Transformational Marketplace”
Don and Heidi Schultz Agora, Inc.
WELCOME!
ISBM Webinar Series
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OUR MISSION:
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ISBM Membership – 2009; Moving to 100 (Capped) by 2010
Agilent
Air Products
Alcoa
Alfa Laval
Analog Devices
Arkema
AT&T
Avery Dennison
Bayer
Brink’s
BSN medical
Ciba Specialty Chemicals
Cisco Systems
ConocoPhillips
Corporate Express
Cox Business
Deloitte
Dow Chemical
Dresser Inc.
DuPont
Eastman Chemical
Eka Chemicals
Ethicon Endo-Surgery, Inc.
ExxonMobil
Ferro
Fin/Econ Partners
Flowserve
Gallup Organization
GE
Grace
Grainger
Greif, Inc.
GyroHSR LLC
Honeywell
IBM
Indium
ITT
JohnsonDiversey
Kennametal
Kimberly-Clark Professional
Kodak’s Graphics Comm.
Lilly
Lonza
LORD Corporation
MARKEM
Monitor Group
Nalco
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New Pig
NIST/MEP
NOVA Chemicals
Objective Management Group
Parker Hannifin
Ply Gem
PPG Industries
Respironics
Rohm and Haas
Sabert
Satmetrix
SAVO Group
Sherwin-Williams
Siemens
Swagelok
3Com
Thilmany
Ticona, LLC
The Timken Company
UBS
WESCO Distribution
Westinghouse
Xerox
ZS Associates 3
“Integration-Driven ROI in A Transformational Marketplace”
Don & Heidi Schultz
• www.agora-imc.com
Integration-Driven ROI in
A Transformational
Marketplace
Integration-Driven ROI in
A Transformational
Marketplace
Don and Heidi Schultz
ISBM Webinar
13 November, 2009
Discontinuous Change Signals a
Transformational Marketplace
Discontinuous Change Signals a
Transformational Marketplace
TimeTime
Ev
en
tsE
ve
nts
Change
When Will Things Get
Back To Normal?
When Will Things Get
Back To Normal?
Most Likely,
This Is Normal!Most Likely,
This Is Normal!
In B2B Marketing and
Communication We’re in a
Marketplace Revolution,
Not a Marketplace Evolution
In B2B Marketing and
Communication We’re in a
Marketplace Revolution,
Not a Marketplace Evolution
Transformation Creates More
Pressure to Justify
Marketing and
Communication Spend
Transformation Creates More
Pressure to Justify
Marketing and
Communication Spend
If You Can’t Count It,
Cut It!
If You Can’t Count It,
Cut It!
But,
Marketers Seem to Have Fallen
Into the Same Financial Quagmire
Trying to Prove Marketing and
Communication Work
But,
Marketers Seem to Have Fallen
Into the Same Financial Quagmire
Trying to Prove Marketing and
Communication Work
� Six Sigma
� Balanced Scorecard
� Marketing Mix Modeling
� Other Quantitatively-Driven, Historical, ROI
Systems
Using Tools That Don’t Fit or
Can’t Be Made to Fit
Using Tools That Don’t Fit or
Can’t Be Made to Fit
� Quantitative financial systems that
assume…
�Static marketing situations
�Availability of optimal solutions
�Are backward-looking
� Ignore any network effects
�Methodologies can be employed in all
situations
Everyone and His Brother
Has An ROI Approach
Everyone and His Brother
Has An ROI Approach
And, More Are Being
Invented Every Day
And, More Are Being
Invented Every Day
The Problem Is:
None of Them Are
Compatible, Comprehensive
and Certainly Not Complete!
The Problem Is:
None of Them Are
Compatible, Comprehensive
and Certainly Not Complete!
Traditional Measures of
Marketing and Brand Returns
Traditional Measures of
Marketing and Brand Returns
Customer-Based
Brand Equity
Attitudinal
Data
Hierarchy of
Effects
Brand Tracking
Studies
Three Pathways
Short-Term
Incremental Sales
Cash
Flows
Marketing Mix
Modeling
ROCI
Branded
Business Value
Present/Future
Brand Value
Discounted Cash
Flows
Brand
Scorecards
And, CFOs Know They
Don’t or Can’t Work
And, CFOs Know They
Don’t or Can’t Work
“Survey Finds CFOs Skeptical of Their Own Firms’ ROI Claims”
� 60% believe their marketing departments have
inadequate understanding of financial controls
� 70% said their companies do not use marketing inputs
and forecasts in financial guidance to Wall Street
Advertising Age, July 15, 2008
Not What You Wanted to Hear
Given Today’s Economy,
Right?
Not What You Wanted to Hear
Given Today’s Economy,
Right?
What to Do?What to Do?
We’ve Been Looking at the
Wrong End of the
“Communication Funnel”
We’ve Been Looking at the
Wrong End of the
“Communication Funnel”
Measuring Outputs, Assuming Valid Inputs Measuring Outputs, Assuming Valid Inputs
We’ve Started Here – ROI
What We Should Have Been
Studying Is What to Put in the
Media Communication System
What We Should Have Been
Studying Is What to Put in the
Media Communication System
Valid Inputs Determine Useful Outputs Valid Inputs Determine Useful Outputs
…Determines What You
Get Out Down Here
What You Put in
Up Here...
Proposing an Alternative Plan
for Measuring Marketing
Communication Success:
Where ROI Is the Result, Not
the Goal
Proposing an Alternative Plan
for Measuring Marketing
Communication Success:
Where ROI Is the Result, Not
the Goal
It All Starts With a Holistic,
Integrated Approach to
Marketing and
Communication
It All Starts With a Holistic,
Integrated Approach to
Marketing and
Communication
Which Has Been Massively
Complicated by Technology
Which Has Been Massively
Complicated by Technology
ConsumerConsumer
Internet – WiFi
Mobile Telephony
iPods/MP3 -- podcasts
Social Networks
Cable/satellite
Blocking Systems - TIVO/DVRs/ Filters/Pop-up Blockers/etc.
Creating Today’s Marketplace Creating Today’s Marketplace
MarketerCustomers/Prospects
Competitors
Competitors
Competitors
Competitors
Messages and Incentives
Products and Services
Word-of-Mouth New Forms of Media
Web Search
Em
plo
ye
es/R
ecom
mend
ers
/Dis
trib
uto
rs/I
nflu
encers
Agency � Media � Sales Force
How Can Anyone Possibly
Untangle All the Brand
Contacts Companies Send
Out and Customers and
Prospects Receive…or,
Generate?
How Can Anyone Possibly
Untangle All the Brand
Contacts Companies Send
Out and Customers and
Prospects Receive…or,
Generate?
You Can’t If You Keep Trying to
Measure Message Distribution
You Can’t If You Keep Trying to
Measure Message Distribution
An Even Bigger Problem…An Even Bigger Problem…
Customer to Customer
Attitudes
Cust
omer
to
Bra
ndSales
Brand to C
ustomer
Brand
Information
and Value
Here’s The Problem
Fact:
ROI Is Assumed to be a
By-Product of Media Distribution
But,
ROI Occurs as a Result of Media
Consumption, Not Media
Distribution
Fact:
ROI Is Assumed to be a
By-Product of Media Distribution
But,
ROI Occurs as a Result of Media
Consumption, Not Media
Distribution
It Is Marketing Communication
Inputs into the Funnel…
It Is Marketing Communication
Inputs into the Funnel…
Inputs Are Key:
Allocation
…That Are Really Important!…That Are Really Important!
Those Determine What Comes
Out in Marketplace
Measurement
Those Determine What Comes
Out in Marketplace
Measurement
If You Do Allocation
Right, Acceptable ROI
Will Follow
If the Message Distribution
Isn’t Right in the Beginning…
You’ll Never Get an
Acceptable ROI…
No Matter How Statistically
Sophisticated Your ROI
System
If the Message Distribution
Isn’t Right in the Beginning…
You’ll Never Get an
Acceptable ROI…
No Matter How Statistically
Sophisticated Your ROI
System
As the IT People Have Said
For So Long…
As the IT People Have Said
For So Long…
Garbage In…
….Garbage Out!
All ROI Measures Assume
CONSUMPTION of the Media
Forms You Distribute!
If It’s Not Consumed,
Nothing Happens!
All ROI Measures Assume
CONSUMPTION of the Media
Forms You Distribute!
If It’s Not Consumed,
Nothing Happens!
What Do We Know About
Media Consumption?
Very Little!
What Do We Know About
Media Consumption?
Very Little!
Only Media Audiences Know
What Media Forms They
Consume and What Impact
That Has on Their Purchasing
Habits…
Only Media Audiences Know
What Media Forms They
Consume and What Impact
That Has on Their Purchasing
Habits…
What We Really Need Are
Media Consumption Measures
What We Really Need Are
Media Consumption Measures
Response
Media
Exposure
Media
Exposure
Media
Exposure
Media
Consumer
Potential Synergy
Via Simultaneous Media Usage
(Messages Reinforced)
Potential Fragmentation
Of Attention
(Message Impact Diluted)
Foreground/Background Media
Time Allocated To Each Media Form
Media Consumption Measures
Are Complicated by
Simultaneous Media Usage,
Multi-Tasking and the
Importance of the Media Form
to the Receiver!
Media Consumption Measures
Are Complicated by
Simultaneous Media Usage,
Multi-Tasking and the
Importance of the Media Form
to the Receiver!
That Means “Integration”,
But,
Not Just Integrating the
Outbound Messages,
Integrating the Entire
Customer Communication
Experience
That Means “Integration”,
But,
Not Just Integrating the
Outbound Messages,
Integrating the Entire
Customer Communication
Experience
Integration of the Entire
Communication System Is Critical
Integration of the Entire
Communication System Is Critical
Customer
Brand Experiences
Internet Systems
Electronic Systems
Brand Experiences
• Web sites
• Customer Service
• Tech support
• Social Media
• Friends
• User communities
• Blogs
• RSS
• Influencers
• Recommenders
Audiences Retailer Agencies Messages
That Calls for a New Media
and Promotional Planning
Approach…
That Calls for a New Media
and Promotional Planning
Approach…
Allocating the Right Media
Forms to the Right Customers
and Prospects, at the Right
Time, in the Right Amount…
In Short, an Integrated
Approach to B2B Marketing
and Communication..
Allocating the Right Media
Forms to the Right Customers
and Prospects, at the Right
Time, in the Right Amount…
In Short, an Integrated
Approach to B2B Marketing
and Communication..
The Customer Focused
Integration Approach
The Customer Focused
Integration Approach
1. Customer IdentificationFrom Behavioral Data
2. Valuation of Customers/Prospects
3. Creating & Delivering Messages & Incentives
4. Estimating Return-on-Customer- Investment
5. Budgeting, Allocation, Evaluation &Recycling IMC
Using a Customer-Focused,
Inside-Out Approach
Using a Customer-Focused,
Inside-Out Approach
� Solutions
� Information
� Values
� Access
S I V A
S Is for Solution to Customer
Problems and Concerns:
S Is for Solution to Customer
Problems and Concerns:
� Customer Question: � How can I solve the problem I have or
expect to have?
� Brand’s Answer:
� Here’s our solution to your problem
S
I Is for Customer Need for
Information
I Is for Customer Need for
Information
� Customer Question: � Where can I learn more about your
Solution to my problem?
� Brand’s Answer: � Here are the answers to your questions
– ways to get the information, plus the products and services you want or need
I
V Is for Customer Questions
About Value
V Is for Customer Questions
About Value
� Customer Question: � What is the total sacrifice or cost to get and
use your solution to my problem?
� Brand’s Answer: � Here’s the total cost for “our solution” and,
here’s the value you get for the price you pay
V
A Is for the Customer Needs for
Access
A Is for the Customer Needs for
Access
� Customer Question: � Where can I get or find “your solution” and,
how easy will it be to obtain?
� Brand’s Answer: � Here’s where you can find “our solution” ,
here’s the total cost and the experience you will have in obtaining and using
A
A Difference in Where
Integration Takes Place
A Difference in Where
Integration Takes Place
� 4 Ps View
� Product
� Price
� Place
� Promotion
� Selling/marketing at the end of the process
� SIVA View
� Solutions for Customer
� Information for Customer
� Value for Customer
� Access for Customer
� Marketing/branding driving
the process from the beginning
S I V A
With a Customer Focus,
You Can Generate
Measurable, Relevant, Useful
and, Believable
ROI!
With a Customer Focus,
You Can Generate
Measurable, Relevant, Useful
and, Believable
ROI!
What Should Go In?What Should Go In?
Customer Product
Usage
Outputs from the Funnel:
Accurate and Relevant ROI
Financial Value
of Customer
Customer
Media Usage
Estimated Customer
Returns
But,
Where Do We Get the
Necessary Inputs for
Allocation?
But,
Where Do We Get the
Necessary Inputs for
Allocation?
Most of the Data You Need Is
Inside Your Organization….
You Simply Need to Find It
and Then Align the
Organization
Most of the Data You Need Is
Inside Your Organization….
You Simply Need to Find It
and Then Align the
Organization
55
Customer
Channel
DataSales
Credit/
Financial
Data
Accounting
Customer
End-User
Data
Marketing
Traditional
Attitudinal
DataResearch Dept.
Customer
Feedback
Data
Customer Service
Product Use/
Application
Data
Tech Support
Customer/ChannelDatabase
Integration of Planning ProcessesIntegration of Planning Processes
Source: Adapted from Cranfield School of Management
Marketing FinanceHuman
ResourcesInformationTechnology Operations
CEO
Step One: Customer Identification fro Behavioral Data
Step Two: Valuation of Customers/Prospects
Step Three: Creating & Delivering Messages & Incentives
Step Four: Estimating Return-On-Customer-Investment
Step Five: Budgeting, Allocation, Evaluation and Recycling
Cu
sto
mers
This Is the Type of Integrated
Marketing and
Communication Approach
We’ll be Discussing in the
ISBM Seminar in January…
This Is the Type of Integrated
Marketing and
Communication Approach
We’ll be Discussing in the
ISBM Seminar in January…
Agenda As PlannedAgenda As Planned
� A New Marketplace – Meeting
The Challenges
� What We Know Abut IMC
� 7 Basic Concepts
� Marketplace Transitions
Change Integration
Requirements
� “Push” vs. “Pull”
� B-to-B Branding in an IMC
Context
� 4 Stages of IMC
� 5-Step IMC Process
� Applying the 5-Step IMC Process to
a B-to-B case
� Basic Thoughts on Measurement
� The Three Pathway Model
� Pathway 1: Customer Brand Equity
� Pathway 2: Short-Term Sales
� Pathway 3: Brand Valuation
� Challenges of Measurement
� Internal Marketing
� Next Steps in IMC
� Summing Up
Day OneDay One Day TwoDay Two
We Hope You’ll Join Us in
Pittsburgh!
January 13 and 14, 2010
We Hope You’ll Join Us in
Pittsburgh!
January 13 and 14, 2010
For more information contact Paula Dorminy at ISBMPhone: 814.863.2782
E-mail: [email protected]
60
TM
Archived recording of today’s event at www.isbm.org
For more information on ISBM:[email protected]
814-863-2782
Thank You!