More than ever marketers are required to justify their budgets. But business leaders think in term of future sales while marketing measures and projects all kinds of stuff.. except future sales. This presentation discusses how marketers can get onto the same page with CEO, CFO and business owners by continuously valuing the source of future sales - customer base. All marketing activities, however different in nature, can be compared and prioritised, if their effect was estimated/measured in terms of additional customer value they generate. With this approach all the different metrics currently used in marketing will fall into their logical places, creating coherent picture of the business, its customers and their interactions

1. MEASURE
MARKETING ROI
AND JUSTIFY
MARKETING BUDGET
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2. BUDGET SQUEEZE
More than ever marketers
need to justify their budgets
and explain the value they
deliver to the business
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3. SHOW ME THE MONEY
The CFO, CEO, business owners and boards ask:
• How will the new campaign, shiny website, smart analytics
pay for themselves?
• What are the early signs of success or failure?
• How can we mitigate risks?
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4. NO SIMPLE ANSWER
• Various marketing metrics
cannot be easily converted to
the one that matters – money!
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5. NO SIMPLE ANSWER
• Various marketing metrics
cannot be easily converted to
the one that matters – money!
• Instead we have increasing
fragmentation and complexity
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6. NEW CHANNELS
• We now have a number of digital channels:
• Companies websites
• Social media
• Digital TV and videos
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7. NEW METRICS
• Channels have their own sets of metrics: views,
visitors, likes, shares, interactions etc.
• They do not compare easily with each other or old
metrics like TV ratings or print circulation.
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8. DOWN-THE-FUNNEL ACTIVITIES
• Most of the marketing dollars go to feed the top of
the sales funnel. But do you need more exposure,
more leads … if they don’t become customers?
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9. DOWN-THE-FUNNEL ACTIVITIES
• Most of the marketing dollars go to feed the top of
the sales funnel. But do you need more exposure,
more leads … if they don’t become customers?
• How do you plan and prioritise the need to improve
the website or customer service versus generating
leads when these activities are not measured in
comparable metrics?
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10. USE CUSTOMER VALUE –
SIMPLE, UNIVERSAL METRIC
Evaluate all marketing activities in dollars of future
sales:
• Get onto the same page with CFO, CEO and
business owners.
• Value your most important asset – customer base
• Forecast the additional value proposed marketing
effort will generate
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11. DON’T SELL YOURSELF SHORT!
• Don’t just measure your campaign by
the immediate sales it generated assess the longer-term potential of the
new customers
• Don’t just measure the number of
customers – measure their quality and
potential
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12. VALUE YOUR BIGGEST ASSET
• Your customer base is your biggest asset –
understand how much is it worth using common
accounting principles
• Account for sales and profits that are some time
away – use discount cashflow model.
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13. EVALUATE ANY ACTIVITY
• Compare and prioritise any proposed marketing
activity by the value it will add to the customer
base
• Lead generation versus conversion improvement
versus customer retention
• If it does not add value –should you really do it?
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14. GET METRICS IN ORDER
Translate channel raw metrics into:
• People
• likelihood of conversions
• potential customer value
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15. TV METRICS
• TV reach and frequency shows how many people
have seen the ad.
• TV viewers have low probability of conversion
• Different segments of audience will have different
value that you can gauge from your existing
customer base
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16. WEBSITE METRICS
• New non-bounced visitors – people interacting with
your brand – higher probability of conversion
• Repeat visitors – engaged people with highest
probability of conversion
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17. SOCIAL METRICS
Multiple functions within the same action/metric.
Eg: like’ of the company page has 2 functions:
1. Lets you market to the Facebook user and her
friends – value like a record in your mailing list
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18. SOCIAL METRICS
Multiple functions within the same action/metric.
Eg: like’ of the company page has 2 functions:
1. Lets you market to the Facebook user and her
friends – value like a record in your mailing list
2. Conveys positive sentiment – along with positive
comments increases conversions – valued by
conversion increase
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19. MORE INFO AND DISCUSSION
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