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Finance Directors Forum
 

Finance Directors Forum

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Finance Director presentation on improving marketing effectiveness - Oct '08

Finance Director presentation on improving marketing effectiveness - Oct '08

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  • Marketing is the hardest parenting job in the world. Let me tell you about it. Marketing is about creativity and creativity is about playfulness So we employ creative people who see marketing as the best toy set in the world, they have enormous energy and enthusiasm, they’re like big kids. They want to show off, they show me their PowerPoint slides just as my kids show me computer games. And they want pocket money to buy more games. And you marketing directors are like parents of these creative big-kids; you control their pocket money; you want them to do their homework, pay attention and concentrate; get good marks and spend their pocket money sensibly. And when you have problems with your big kids, mostly you sort it out yourself, sometimes you call the school, or hire a private tutor for the kids.

Finance Directors Forum Finance Directors Forum Presentation Transcript

  • Using our Finance Skillset to help Improve Marketing Performance Robert Shaw Founder and MD of Demand Chain Partners [email_address] Honorary Professor, Cass Business School
  • Agenda 1. Introduction 2. Money skillset 3. Process skillset 4. Information skillset 5. Conclusions
  • About you Stories and Myths Symbols Paradigm Control Systems Org Structures Power Structures Rituals
    • Cars
    • Offices
    • Terminology
    • Statistics
    • Lunch
    • Jargon
    • Take credit for others work
    • Research withheld
    • Lack of structure
    • Internal focus
    • Always in meetings
    • Unaccountable
    • Untouchable
    • Expensive
    • Slippery
    • Planning
    • Delegating
    • Deadlines
    • Off site meetings
    • 10.00-16.00 hrs
    • Soft measurement
    • Lunch
    • Travel
    • For self
    • Golden child
    • No loyalty
    • Costs
    • Mud doesn’t stick
    • Quick promotion
    • Experience
    • Churn
    Source: Cranfield School of Management survey 2001 How finance views marketing
  • About me Clients Robert Shaw Cass Business School 25 yrs 7 yrs CIM DMA IPA ISBA
  • Finance and Marketing
    • Finance has important skills that are needed to improve marketing performance
    • Both parties must be actively involved on equal terms
    • Finance brings skills with money, process and information
    • Marketing brings skills with customers, competition and creativity
  • Agenda – Finance’s Involvement in Marketing
    • Budget setting, allocation and re-forecasting
    • Risks and Rewards (external and internal)
    • Costing / procurement
    • Commitment accounting
    • Regulatory risks
    • Control and decision-taking risks
    • Efficiency of the marketing process
    • Contract and briefing risks
    • Scorecards and performance reports
    • Transparency / audit trail / record-keeping
    • Demand analysis / econometrics
    • Forecasting
    Money skillset Process skillset Information skillset
  • Agenda 1. Introduction 2. Money skillset 3. Process skillset 4. Information skillset 5. Conclusions Rewards and risks Budget setting and allocation Costing and procurement Commitment accounting Money skillset Process skillset Information skillset
  • Asking the right questions about money Are sales bonuses justified? Are jobs costed competitively? Are budgets justified? Are cost commitments reported? Are customer deals justified? Money skillset Process skillset Information skillset
  • Are bonuses justified? Bigger bonus Basic pay Bigger bonus Bonus Revenues minus sales and marketing costs Money skillset Process skillset Information skillset
  • Risks and Rewards – Alcoholic Beverages Money skillset Process skillset Information skillset
  • Budget Setting and Allocation - Telecoms STOP! Money skillset Process skillset Information skillset
  • Budget Setting and Allocation - Global Oil Co. Money skillset Process skillset Information skillset
  • Budget Allocation - Top 20 Accounting Firm Advertising Direct Mail Brochures Events Corporate hospitality Telemarketing Locations Sectors Lines Marketing Mix Strategic Prioritization Audit Consulting Advisory Recovery Forensic PPP/PFI Investment Tax Central Government Education Financial Services Leisure and Lifestyle Local Government and Health Property and Construction Social Housing Utilities and Infrastructure Manufacturing Technology London Birmingham Bristol Cambridge Dublin Edinburgh Hemel Leeds Manchester Money skillset Process skillset Information skillset
  • Costing / Procurement - Entertainment Money skillset Process skillset Information skillset
  • Marketing Commitment Accounting Money skillset Process skillset Information skillset
  • Agenda 1. Introduction 2. Money skillset 3. Process skillset 4. Information skillset 5. Conclusions Process efficiency Process risks - regulatory Process risks – accountability Process risks - contractual Money skillset Process skillset Information skillset
  • Marketing Process Issues Ideas Production Distribution Demand projects collateral stimuli costs costs costs Compliance? Audit trail? Efficiency? Value for Money? Fraud? Corporate or self-interest? Complexity Money skillset Process skillset Information skillset
  • Process Efficiency - Telecoms Money skillset Process skillset Information skillset
  • Process Risks - Regulatory Money skillset Process skillset Information skillset
  • Process Risks - Accountability Money skillset Process skillset Information skillset
  • Process Risks - Contractual Deliverables Time and materials Payment by results Transparency Briefs Signoff Rework Money skillset Process skillset Information skillset
  • Agenda 1. Introduction 2. Money skillset 3. Process skillset 4. Information skillset 5. Conclusions Transparency & audit trail Scorecards Econometrics Forecasting and S&OP Money skillset Process skillset Information skillset
  • Transparency and Audit Trail … from marketing expenditure to market share, revenues, profits, and ultimately, value Money skillset Process skillset Information skillset Total Discretionary Marketing Budget Total Discretionary Marketing Budget Advertising Advertising Public Relations Public Relations Channel Promotions Channel Promotions Channel Training Channel Training End-User Promotions End-User Promotions Master Brand Adv. & PR Master Brand Adv. & PR Point-Product Adv. & PR Point-Product Adv. & PR Stackable Stackable Modular Modular NICs NICs Broadband Mod. Broadband Mod. Home Networks Home Networks Internet Devices Internet Devices Allocation by Product Allocation by Category Brand Awareness Share of Channel Investment Share of End User Promotions Market Share
  • Scorecards – Beverages Firm 1. Imagine 2. Predict 3. Demonstrate Money skillset Process skillset Information skillset
  • Econometrics 0% 5% 10% 15% 20% 25% 49 77 105 133 161 189 Week Sales uplift 0 5 10 15 20 25 30 35 40 45 50 Thousands Sales uplift Spend Money skillset Process skillset Information skillset
  • Demand Forecasting Is growth slowing down? 22% 19% 8% ? Money skillset Process skillset Information skillset
  • Statistical analysis: temperature as variable Slowdown not as bad as extrapolation suggests 22% 19% 8% 21% 15% 12% wk 1 wk 27 wk 1 wk 27 wk 1 wk 27 wk 1 wk 27 Sales volume Actual Model Money skillset Process skillset Information skillset
  • Conclusions
    • Finance can and should use its skillset to improve marketing performance
    • Both parties must be actively involved on equal terms
    • Financial skills help improve budgeting, set appropriate rewards (for customers and internal staff) and spend money more wisely
    • Process skills help increase efficiency, reduce regulatory and contractual risks, and learn to take decisions more effectively
    • Information skills improve transparency, report performance impartially and gain insights and foresights about demand and cash inflows
  • THAT’S ALL FOLKS Questions? Robert Shaw Founder and MD of Demand Chain Partners [email_address] Honorary Professor, Cass Business School Example Presenter photo