marketing week 6

marketing week 6

1. view on marketing changes: marketing as contribution to company value

2. Marketing accountability

   • responsibility to achieve measurable gains - long term (company value)
     • extent to which marketing department can link their activities to financial outcomes.

3. Verhoeff en leeflang

   • Capabilties of marketing department (MD)
     • accountability
       • Most important
         • More influence of MD in firm and all 3
         • a lot to gain in accountability and innovativeness.
           • People feel pressure and urge to prove the value of marketing, but don't act like it
     • innovativeness
       • But also factors companies scored lowest on
         • better performance
     • customer connection
       • More business performance
     • cooperation other department
       • more influence of MD inform
   • Marketing metrics - MSI: to track and assess marketing impact .
   • Metrics:
     • define the right metrics
     • analyze and learn over time
     • effect of marketing activities on metrics
     • Effect of metrics on firm performance
   • Why is it so hard to measure marketing impact?
     • Hard to measure the whole process - to many steps in between! not only sales but also brand awareness. Who do you target? attitudes? Chain of effects! Financial non financia l
       • How predictive are views and likes for real success?
     • Main issues:
       • observable vs unobservable effects
         • observable:
           • market share: amount of people that buy your brand
           • shared wallet: per category. What percentage do you buy of the same brand (toilet paper). loyalty!
           • Click trough rate. Clicks/ impressions
         • unobservable
       • short term vs long term effects
         • short term more easy. long term important! The slower measures will have a higher predictive value to the long term and the fast measures for short term.
           • slow: cognition, knowing, affect, liking: awareness, consideration, preference, loyalty
           • Fast: awareness, click, buy, experience, wOM
       • how to assign effect to marketing activity
     • ROMI: return on marketing investment: how marketing influences business performance.

4. Hanssens & Pauwels - 2016 - issues!

   • Issue 1. Marketing objectives;
     • not always about profit max (brand awareness?)
     • effectiveness vs efficiency
       • Highest return? short term vs long term?
     • The scope of marketingL tactics vs strategic
     • marketing budget (investment) of allocation (cost)
       • research more focused on tactics (sales/profit). Not strategy (sustained growth)
   • selection of the right metric: we go too quickly for short term quickk wins
   • Issue 2:
     • Method
       • secondary (historical) vs primary (now) data
       • past behavior vs causality (experiment) vs reasons why (survey)
     • Findings
       • short term vs sustained impact? Innovation & distribution
       • But what about combinations of activities: synergies?
     • soft vs hard metrics
       • Soft vs hard metrics - different characteristics: financial? behavior;? attitudinal?
         • Slow measures better predictors for future! Slow - attitudes, awareness, preference loyalty. Hard measures: buying, clicking, visiting etc
     • Risk issues
       • planning variation, execution
   • Issue 3: communication in org.
     • * multiple markting objectives in dashboard
       • * adapt communication to style of top management : analytical vs intuitive decision style. Numbers vs pictures
         • Adapt communication to marketing organization - minimize resistance

5. Looking for measures that have high predictive value!

6. In sum:

   • Marketing value assessment is essential but difficult
     • 1. short term vs long term
     • 2. soft measures vs hard measures
     • 3. Causality difficult to isolate
   • Currtently, most improvement and knowledge:
     • on tactical level
     • Related to sales outcomes (no soft metrics)
     • used for budget allocations (no investments)

7. Net promotor score : holy grail

   • How likely are you to recommend our org to a friend/ colleague (0-10) - percentage!
   • first:
     • claimed to be the best predictor of company growth
     • better than satisfaction and loyalty measures
     • This single metric better thanmulti metric solution
     • But is this true?
   • Many CEO's adopted it
   • But is it really true?
     • macro method: revenue in growth: correlated but not always stronger related to other factors than the others
     • Strong relations with net promotor and growth but NOT stronger than any other measure.
     • Conclusion: link to behavior is good BUT not better than others measures.
       • depends on industry!
         • Link to share of wallet low!
           • Multi metrics outperform single metrics!!
   • SO: NPS fine measure, ut not very special and industry dependent. Multi metrics model better than single metric