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"BUSINESS INSIGHTS”

                                                                         An Occasional Newsletter

 to our Clients, Readers, and Friends 

 

 

Are you getting the most  for your Marketing Buck?

Today’s CEO’s and board members want marketing executives to speak the language of productivity and return on investment – and to be accountable. Despite its importance, marketing is one of the least understood, least measureable functions within most companies. Most board members and a rising percentage of CEO’s lack deep experience in this field.

How can a CEO be sure that the company is spending the right amount of money on the right kind of marketing that enhances shareholder value? Here are some useful questions to be asking: 

1. Is our marketing expenditure made wisely in context of both the long and short term benefit of the company?

2. What are the specific returns from our marketing expenditures? Are they acceptable?

3. Are our customers satisfies with our service and will they continue to use us?

Without precise answers to these questions, your decisions are at best, uneducated guesses. Measurable performance and accountability have become the keys to marketing success. For example, when marketing declares that customer satisfaction is up, a CEO needs to know whether that extra point of customer satisfaction actually translates into shareholder value. Marketing metrics provide precision and accountability. Some examples of useful marketing metrics:

  1. Margins and profits - accurately quantifying the profitability behind products, services, customers, markets and sales programs.

  2. Customer profitability - determining the value of individual customers and relationships both for the long and short term.

  3. Sales force management - determining the effectiveness of the sale force organization, performance, compensation and market coverage.

  4. Marketing and finance - a financial evaluation of each of the marketing programs, ensuring efficient and effective allocation of corporate resources.

Marketing is often perceived as just a cost center, even though they provide the critical information needed for important business decisions. Marketing metrics facilitate strategic decisions and guide course adjustments. Successful companies manage the way they go to market based on insights gained from accurate and up-to-date metrics, effectively aligning their marketing and sales processes with ROI marketing.

The use of marketing metrics will probably not make the marketing executive’s job easier, but the knowledge gained will help senior executives and board members do a better job in increasing shareholder value. What you can measure, you can manage.

 Marketing is the business. If goods or services aren’t sold, everyone else can go home.

  

About the Author:  Ken Wilson: Strategist, marketing guru, educator, facilitator, author, university lecturer and consultant, he can be reached at ken@wmg-mn.com  or 763-476-2216.

Copyright ©2013 by Ken Wilson    All rights reserved.

Candle Man