Marketing Operations ROI: It`s Simpler and Way Harder Than You Think

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Marketing Operations ROI: It`s Simpler and Way Harder Than You Think

  1. 1. Marketing Operations ROI: It’s Simpler . . . And Way Harder Than You Think Center your business on customers as the key to growth: accountability, alignment & agility
  2. 2. About Your Guide: Gary M. Katz © 2012 Marketing Operations Partners, Inc. All Rights Reserved. • Founder and Chief Strategy Officer of Marketing Operations Partners • First ready-to-go COO and change management team for the marketing department • Chairman of Marketing Operations Future Forum • 20+ years experience leading corporate marketing, marcom, PR, IR, demand gen & change management • Certified Strategic Planning Process Facilitator (ICA) • Noted educator, author, speaker and leader in Marketing Operations field • MS in Organization Development, BA in Public Relations
  3. 3. » Why is Measuring Marketing ROI so Freaking Difficult? » Marketing Operations Maturity • What it takes to get to Meaningful ROI » Exercise: Measuring ROI – What’s Behind the Numbers • Marketing Operations Mini Self-Assessment » What is Marketing Operations 2.0? • 1.0 vs. 2.0: What’s the difference? • Six top marketing challenges and how MO tackles them From a Marketing ROI Fantasy to a Marketing Operations Mindset © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  4. 4. • Number reporting the use of ROI and profitability metrics has remained steady since 2008 • Organizational pressure from senior management is quite high • Firms using ROI are more likely to report expecting greater growth than competitors • Firms reporting that they calculate ROI are 3 times more likely to report marketing as “highly effective and efficient” Key Findings – 2009 Marketing ROI and Measurements Study Source: 2009 Lenskold Group / MarketSphere Marketing ROI and Measurements Study Available at www.lenskold.com. Marketing ROI Tied to Effectiveness © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  5. 5. But There`s a Lot More to ROI than a Number © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  6. 6. Why is Measuring ROI So Difficult? Metrics, Metrics, Too Many Metrics …
  7. 7. • Revenue • Profit • Gross margin • Market share • Number of customers • Stakeholder satisfaction • Brand equity • Distribution availability External Measures • Customer lifetime value • Share of wallet • Up-selling ÷ customers • Cross-selling ÷ customers • References ÷ customers • Reference-driven new customers • New customers ÷ average # of customers • Lost customers ÷ avg # of customers • Win-back customers ÷ avg # of customers • % Dissatisfied, neutral, satisfied • % customers who would rebuy • % customers who would recommend brand • % target market aware of brand • % customers preferring brand • Perceived quality vs. brand competitor • % customers who know USP Customer Management • Awareness of goals • Commitment to goals • Resource adequacy • Skill levels • Freedom to fail • Employee satisfaction Internal Measures Source: Used with permission: © 2008 ClearAction. All rights reserved. Organizational © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  8. 8. • Revenue ÷ sales calls • Costs ÷ sales calls • Daily calls ÷ salesperson • Sales call time ÷ contacts • Entertainment cost ÷ sales calls • Orders per 100 sales calls • New customers per period • Lost customers per period • Sales force cost ÷ total sales Sales Force Efficiency • Cost ÷ 1K buyers reached per vehicle • % Audience who remember an ad • Opinions on ad's content & effectiveness • Before-ad & after-ad brand attitudes • Inquiries stimulated by an ad • Costs ÷ inquiries • CTR = click-through-rate • Effective frequency or reach Advertising Efficiency • Logistics costs ÷ revenue • % Orders filled correctly • % On-time delivery • % Error-free invoices issued Distribution Efficiency • Logistics costs ÷ revenue • % Orders filled correctly • % On-time delivery • % Error-free invoices issued Sales Promotion Efficiency Efficiency Source: Used with permission: © 2008 ClearAction. All rights reserved. © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  9. 9. [Valuew/Investment] - [Valuew/o Investment] ÷ Investment = ROI • Benefits ÷ costs • Includes non-cash benefits & costs Return on Investment { [% Brand's U.S. sales in a region] ÷ [% U.S. population in the region] } x 100 = BDI • BDI = Brand Development Index { [% Category's U.S. sales in a region] ÷ [% U.S. population in the region] } x 100 = CDI • CDI = Category Development Index Sales Potential [Penetrated market ÷ target market] • Customers = penetrated market • Potential market: product interest • Available market: interest + capability • Served market: available mkt niche Market Share • Frequency = [Exposures ÷ Reach] • GRP = [Reach x Frequency] • CPM = [Ad Cost] ÷ [Subscribers ÷ 1K] • GRP = gross rating points = exposures = gross impressions • CPM = cost per thousand exposures Advertising Potential Performance Source: Used with permission: © 2008 ClearAction. All rights reserved. © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  10. 10. • Program-to-people ratio = •% program spend/ total Marketing spend • Marketing productivity ratio = •marketing program $/marketing employee • Marketing budget ratio = •% marketing budget/overall revenue • Marketing investment change ratio = •% increase or decrease YoY Operational Efficiency Functional Source: Used with permission: © 2008 ClearAction. All rights reserved. © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  11. 11. Used with permission ©2008 Alex Eldemir Performance Management Cause & Effect Accountability ROI What are You Measuring and Why ? © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  12. 12. • Measurable data in 2000 Metric Data Fine granularity needed for better decisions Metric Data • Measurable data now Information Overload © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  13. 13. Source: Courtesy of Aprimo, 2007 GIGO Dashboards © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  14. 14. Product Mgmt Marcom Lead GenSocial Media PR Channel MktgEvents Web Alliances Silos © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  15. 15. • Enterprise Strategic Objectives • Gap Closing • Over some period of time • Objective #1 • Objective #2 • Decisions & Doing • Investments • Measures • Programs • Initiatives • Activities • Alignment • Gaps to Close •Priorities •Leverage •Now vs. Later • Goals & Gaps • Economic • Experience • Business (Ethics, Principles, Values) Alignment of Stakeholders with each other Balanced Returns to Each Stakeholder Maximum Overall Satisfaction Success! START Misalignment with Enterprise Strategy? © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  16. 16. • Your metrics for success are ill-defined • Your people are slammed • Your institutional memory is leaky • Your innovation and creativity are suffering from constipation • Your team, cross-functional or supplier relationships are poorly- aligned • Your decision-making process is tough to justify • Your marketing portfolio is not delivering expected results 7 Deadly Sins, Letterman-Style © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  17. 17. • “I’ll just hire me one of them superstars” • “If everyone just picks themselves up by their bootstraps (or works smarter, etc)” • “If we can just get some of that Marketing Automation, that will solve our problems” • “If we can’t quantify it, we shouldn’t do it” • “I don’t care what it takes, just get it done” • “We can’t spare a dime to invest in research” • “We don’t have time to examine our own navels” Myths Marketers (& Their Bosses) Gotta Stop Buying © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  18. 18. • Trusted Data and Actionable Insight • A Clearly-Defined and Well-Aligned Strategy • A Means to Mobilize People • Processes to Manage the Chaos • Metrics That Matter • Technology to Aid Tracking, Measurement, Reporting • In other words, a “Marketing Operations Mindset” Behind the ROI © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  19. 19. What is Marketing Operations 2.0?
  20. 20. Defining Marketing Operations 2.0 A Strategic Foundation for Marketing Excellence A Holistic Framework Alignment Integration A Best Practice Enabler Consistency Sustainability An Operational Discipline Efficiency Accountability MO 1.0 MO 2.0 ✓ ✓ ✓ ✓ ✓✓ ✓✓ © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  21. 21. Scaling for Growth Enterprise Strategic Agenda Customer Profitability Buying Acceleration Accountability Alignment with Stakeholders Marketing Intelligence © 2012 Marketing Operations Partners, Inc. All Rights Reserved. Marketing Operations: Sphere of Influence
  22. 22. Lack of Confidence in Business Intelligence Challenge: Converting Insight into Value 6 Top Marketing Challenges & How MO Tackles Them © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  23. 23. Lack of Confidence in Business Intelligence Solution: Converting Insight into Value Benchmark Best Practices Validate Market Demand Assess Insight/ Opportunity Gaps Baseline What We Know/What We Don’t MO Breeds Actionable Insight and Innovation © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  24. 24. The Price of Acquiring & Keeping a Customer is Growing Challenge: Maximizing Customer Profitability © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  25. 25. The Price of Acquiring & Keeping Customers is Growing Solution: Maximizing Customer Profitability Calculate Customer Lifetime Value Capture Customer Decision Drivers Win Back At-Risk Customers Mobilize to Meet Customer Expectations MO Delivers Customer Experience © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  26. 26. Every Strategy/Budget Cycle -- a Free-for-All Challenge: Delivering the Strategic Agenda © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  27. 27. Catalyze Shared Vision Strategy / Budget Cycles are Free-for-Alls Solution: Delivering the Strategic Agenda Ensure Message Integrity Live the Brand Socialize Marketing Change MO Realizes Strategy © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  28. 28. No or Slow - Growth... Disappointing Revenue Results Challenge: Accelerating Selling/Buying Process © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  29. 29. No or Slow Growth Solution: Accelerating Selling/Buying Process Integrate Buying/Selling Cycle Feed Sales Pipeline Optimize Sales/ Marketing Hand-offs Leverage Loyalty Assets MO Aligns Sales/ Marketing Effort © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  30. 30. Marketing in Reaction Mode Challenge: Scaling Marketing for Growth © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  31. 31. Marketing in Reaction Mode Solution: Scaling Marketing for Growth Diagnose Marketing Health Architect Enabling Shared Processes Optimize Marketing Investment Develop Marketing Competency MO MObilizes Resources © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  32. 32. Marketing on Defensive to Show Contribution Challenge: Demonstrating Return on Marketing “Much of what marketing can contribute right now is seen as less tangible because we lack the metrics” – Dawn Hudson, CEO, Pepsi North America © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  33. 33. Marketing on Defensive To Show Contribution Solution: Demonstrating Return on Marketing Align Marketing/Enterprise Objectives Track Individual and Team Performance Fine-tune Forecasting thru Predictive Analytics Define and Track Key Metrics via Dashboards MO Enables Account- ability © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  34. 34. Marketing Operations Maturity What It Takes To Get To Meaningful ROI
  35. 35. Marketing Operations Best Practice Framework MetricsProcessGuidance Infrastructure Management Technology Strategy Ecosystem Alignment © 2012 Marketing Operations Partners, Inc. All Rights Reserved. A MOdel for Sustainable Success
  36. 36. » With Sales » With Enterprise Metrics > 20% CAGR ’03-’07 Strong Brand Identity Execution Excellence Process Excellence » Budgeting » Brand Management » Customer Management » Planning » Product Lifecycle Management » Predictive Analytics for Revenue » Budget Planning Processes Alignment OutcomesFocus Profile of MO Best Practices © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  37. 37. Change Management Competency Development Enterprise Metrics Alignment Org. Learning Catalyst Strategic Management Fundamental MO Budget Management CRM Marketing Services Vendor Management Expanded MO Sophisticated MO Marketing Automation Best Practices Rewards Alignment Process Design Knowledge Management © 2012 Marketing Operations Partners, Inc. All Rights Reserved. The Roadmap to MO Maturity
  38. 38. Big Investment, Heightened Accountability Dynamic Competitive Market Need to Raise Strategic Game Cross-functional Alignment Critical Under Media/ Regulatory Scrutiny M & A Integration Challenges EXTERNAL DRIVERS VALUE DRIVERS MOBILIZATION DRIVERS © 2012 Marketing Operations Partners, Inc. All Rights Reserved. When Should You Invest in Marketing Ops?
  39. 39. Benefits of Mastering Marketing Ops
  40. 40. © 2012 Marketing Operations Partners, Inc. All Rights Reserved. Internal Transportation System: MO 2.0
  41. 41. © 2012 Marketing Operations Partners, Inc. All Rights Reserved. Highways, Roadways and Bridges . . .
  42. 42. © 2012 Marketing Operations Partners, Inc. All Rights Reserved. Means of Transportation
  43. 43. © 2012 Marketing Operations Partners, Inc. All Rights Reserved. Mechanics Tuning the Engine
  44. 44. © 2012 Marketing Operations Partners, Inc. All Rights Reserved. Driver`s Ed, Training & Licensing
  45. 45. © 2012 Marketing Operations Partners, Inc. All Rights Reserved. Driver`s Handbook
  46. 46. © 2012 Marketing Operations Partners, Inc. All Rights Reserved. Traffic Controls & Signals
  47. 47. © 2012 Marketing Operations Partners, Inc. All Rights Reserved. Navigational System
  48. 48. © 2012 Marketing Operations Partners, Inc. All Rights Reserved. Roadmap
  49. 49. © 2012 Marketing Operations Partners, Inc. All Rights Reserved. Alignment Specialist
  50. 50. Source: ©2006 VisionEdge Marketing More Meaningful Metrics © 2012 Marketing Operations Partners, Inc. All Rights Reserved.
  51. 51. We guide marketing organizations to become a value center We are front-runners in Marketing Operations to create a consultancy dedicated to Marketing Operations to publish an article on MO to create a college course on MO to teach a professional symposium on MO to conduct a benchmarking study of MO practices © 2016 Marketing Operations Partners. All Rights Reserved. 1st 1st 1st 1st 1st Companies we’ve influenced: (partial list)
  52. 52. © 2016 Marketing Operations Partners. All Rights Reserved. Organization-wide efficiency and effectiveness raise Marketing performance, agility and ROI Ask us about our model for Marketing Maturity Strategy: holistic vision, fact-based decision-making Guidance: competency development, governance Process: workflow, lean/six-sigma, supply chain Metrics: profitability, predictive analytics, alignment Technology: enterprise marketing / portfolio mgt Ecosystem: collaboration with key stakeholders Infrastructure: back-end integration of processes, metrics, technology Request your marketing maturity assessment and roadmap ChangeMyMO@MOpartners.com
  53. 53. tel +1 408 243 7881 • Twitter.com/MOpartners Twitter.com/MktgFuture • Slideshare.net/MOpartnersCEO • LinkedIn Groups: Marketing Operations Partners Marketing Operations Future • Youtube.com/c/marketingfutureforum MarketingFutureForum.com Join@MarketingFutureForum.com MarketingFutureForum.com ChangeMyMO@MOpartners.com Center your business on customers as the key to growth: accountability, alignment & agility

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