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"BUSINESS INSIGHTS”
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you getting the most
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 short and long term
benefit of the company?
2. What
are the specific returns from our marketing expenditures? Are they
acceptable?
3. Are
our customers satisfied 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:
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Margins and profits - accurately quantifying the profitability behind products, services, customers, markets and sales programs.
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Customer profitability - determining the value of individual customers and relationships both for the long and short term.
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Sales force management - determining the effectiveness of the sale force organization, performance, compensation and market coverage.
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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 memebers do a better job in increasing shareholder value. What you can measure, you can manage.
About Ken Wilson: Ken is the president of the Wilson Marketing Group, Inc., a firm specializing in business-to-business and industrial marketing. Ken has over 32 years of practical consulting experience in business-to-business marketing and management. He has also been a member of the adjunct faculty at the Graduate School of Business at the University of St. Thomas for over two decades, teaching graduate level courses in strategy, marketing and product management and he has lectured on planning and strategy at the University of Minnesota, Carlson School of Management, Ken would be happy to answer your questions by e-mail at ken@wmg-mn.com or by phone at 763.476.2216.
Copyright ©2017 by Ken Wilson
All rights reserved.