Marketing Optimization by Appleton Greene & Co Global Paris Lyon Zurich London New York Banking Financial Services Technology FMCG Telecommunications
Appleton Greene & Co Global – Today, CEO’s and Board members expect marketing to be accountable: they demand visibility on its business contribution and ROI, as well as how it is constantly optimized. Yet, regular surveys show that what is a standard expectation from other functions, like IT or manufacturing, remains a challenge for a majority of marketers. There is certainly a valid argument for it: the complexity of short and long term marketing interactions makes it difficult to establish a clear causality – let alone a financial relationship – between a marketing activity (advertising, for example) and a revenue outcome.
Appleton Greene & Co Global – This explains why, still today, marketing faces issues in assessing its performance in terms of actual business contribution and ROI. Not that marketers are not willing, nor able to assess their performance. They do measure it, through reach and frequency, cost of GRP, brand equity or digital indicators, to name just a few metrics. Unfortunately, these performance indicators rarely satisfy hard-nosed CFO’s: while they are all legitimate and important, most of them focus on intermediate actions rather than on financial outcome.
Appleton Greene & Co Global – The good news is that new approaches, powered by leading edge modeling technology, now provide a precise measurement of the marketing contribution and ROI, in a way that is both easy to implement and affordable. Such measurement will uncover deep optimization insights, pointing towards both short term improvement opportunities (e.g. evolve a media mix or an advertising concept) and more structural ones, such as brand relevance of marketing portfolio management principles. Because technology now simplifies the critical step of marketing ROI measurement, bringing deep optimization insights in a matter of a few weeks and without “boiling the ocean”, marketers can now set up the tools and processes necessary to meet the expectations of accountability and constant optimization.
Trigger your optimization process by mapping the customer journey
Appleton Greene & Co Global – Accountable marketing requires a clear understanding of its actual business contribution and ROI, as well as a constant optimization discipline. To enable this, the first requirement is to precisely figure out how marketing works or, in other words, how it can positively influence customers along the purchase decision process. This is why marketing optimization always begins with a thorough description of the typical customer journey, i.e. the key stages customers go through, from initial awareness to purchase decision and post-purchase experience, possibly leading to repurchase and loyalty. It is also important to understand whether there is one overall consistent journey or whether different groups of customers may experience different ones. For example, the journeys will greatly differ between customers purchasing directly from a brand on line and others buying in store from sales persons.
Appleton Greene & Co Global – Once described the customer journey(s), a second element comes in play: mapping the impact of the different marketing components across the journey. For example, a TV ad is expected to have an impact on the initial stages of the journey (creating awareness, or bringing the brand in a consideration set), while a promotion or a sales incentive is more likely to impact the purchase stage. Such mapping will therefore seek to identify all meaningful correspondences between the stages of the journey and the key marketing activities.
Appleton Greene & Co Global – Mapping the customer journey will therefore trigger the marketing optimization process. This is why it is critical to develop it and build tight alignment around it, through a review of available market research and analysis of the collective business knowledge.
Leverage your marketing data for on-going optimization.
Appleton Greene & Co Global – “Data is the new oil”, according to the now established expression, and as a matter of fact, robust marketing data is a pre requisite to the analysis and modeling of the marketing performance, which opens the doors to optimization. Marketing organizations usually sit on a large amount of data and should therefore have access to an abundance of “new oil”. Yet, despite the touting of the growing importance of data in today’s marketing, quite a few organizations continue to face significant challenges in identifying, accessing and gathering the necessary data for optimization, as well as asserting its quality.
Appleton Greene & Co Global – The main reason for this is most often linked to a lack of internal awareness and preparation. In other words, quite a few marketing organizations have not yet fully internalized that “data is the new oil” and don’t consider it as an asset that needs to be managed, as all assets in the company. As a result, data is neglected, often stored in different places, inside or outside the company, several owners may cater for different parts, periods may be missing, capture processes may be unclear, quality difficult to assess, etc. It is therefore critical for marketing organizations to internalize the need to leverage their data and execute accordingly. Processes and tools need to be put in place to ensure there is a robust long-term data management solution in place, that will fuel an on going, powerful optimization process.
Bring science in the art of marketing.
Appleton Greene & Co Global – Marketing uses a lot of relevant and useful metrics (e.g. GRP, cost of GRP, Click Through Rate, Brand Equity, Customer Loyalty, etc.), yet they all miss one critical target: they provide little, if no insights at all on the actual financial impact of the activities they relate to. For example, the ‘cost of GRP’ metric informs on the efficiency of the media investment but not on its effectiveness, i.e. whether it achieved or not in market results. In the same way, a digital campaign may reach record high Click Through Rate (CTR) without lifting sales at all, and an increase in brand awareness may have no correlation at all with the sales evolution.
Appleton Greene & Co Global – As a matter of fact, optimizing marketing effectiveness goes well beyond optimizing standard marketing metrics. It is about answering questions such as: how much revenue does the advertising investment bring back? Is it breaking even, is it profitable? How to invest differently across the mix to increase the marketing financial impact?
Appleton Greene & Co Global – To answer such questions, further science needs to be brought within the art of marketing. This is precisely what marketing mix modeling does: its aim is to establish a robust statistical relationship between an activity, or a set of activities, and a financial outcome. The good news is that this methodology can now be automated through appropriate technology, enabling a broad modeling exploration in a matter of a few days, in a very flexible and transparent way, at an affordable cost. More than ever, it is time now for organizations to bring in the science of marketing mix modeling in the art of marketing.
Make marketing optimization a process, not a project
Appleton Greene & Co Global – The accountability mandate requires marketing to measure and optimize its contribution, and marketing mix modeling is a key step towards this. Companies deciding to use marketing mix modeling as a foundation towards optimization usually start by a pilot project, which is good practice to assess the benefits of the approach. However, a common mistake should be avoided: some companies consider that one modeling outcome can inform decisions over a long period of time (sometime several years) and adopt a sporadic, project-by-project implementation approach. This will actually not deliver the full benefits of marketing optimization. Indeed, because the marketing context constantly evolves, modeling and optimizing needs to be regularly updated to reflect these evolutions and properly inform key processes such as marketing planning. Clearly, once it has been assessed through a particular project, marketing optimization needs to become a process within the organization.
Appleton Greene & Co Global – The good news is that the most cumbersome parts of this process can now be automated. The first step is to automate the data management process (acquisition, cleansing, integration), which is now enabled through different technology options. The second step is to automate the specific modeling and optimization per se, and here again there is technology available that speeds up the modeling (from several weeks to just a few days), makes it flexible, transparent and affordable. With such processes in place, successful companies usually implement at least 2 rounds of modeling per year for the different components of their business (e.g. different brands or product ranges, acquisition vs. retention etc.) and are able to quickly evaluate the impact of a major change in the market. By making it a continuous process, the quality and reliability of modeling improves over time, providing deep business understanding and optimization insights.
Develop a scientific marketing resource allocation process
Appleton Greene & Co Global – Whoever has had to make investment decisions across a marketing portfolio (the matrix of different brands, sub brands, products and countries) knows the complexity of the task and the internal challenges it creates. To start with, one basic rule of marketing budget allocation is that it will never, ever satisfy all the stakeholders. Priorities have to be set up, which by definition means that some will get more than others. The ensuing question is therefore about setting prioritization criteria: should they align with each stakeholder’s business objectives, maximize revenue or profit, ensure breakthrough in a limited subset of geographies, demonstrate support of all stakeholders, etc.? Answers to these questions are rarely clear-cut and usually involve lengthy alignment discussions, where political considerations may sometime play a bigger role than the more “rational” ones. In such context, it is critical for budget holders to be able to argue on a factual, non-emotional, scientific basis, and this is clearly where a modelling led optimization approach will help.
Appleton Greene & Co Global – Applying the modeling discipline to the matrix of brands, products and geographies enables indeed to better understand how each element of the matrix will respond to different types and levels of marketing investments. Equipped with this understanding, the following step is to conduct an optimization exercise at the required level (e.g. one brand across several country, or on the opposite, one country with several brands) and based on the relevant objective (revenue, profit, or combinations of both). Of course, such exercise, if run manually, will be cumbersome. Fortunately, there is now a technology solution that enables to explore different scenarios and define a scientific, fact-based approach to budget allocation across a portfolio.
Mr. Klotz MM MA BA Accredited Executive Consultant (AEC) at Appleton Greene & Co Global
Appleton Greene & Co Global – Mr Klotz is an approved Executive Consultant at Appleton Greene and he has experience in marketing, management and globalization. He has achieved a Master in Management, a Master in Political Science and a Bachelor in Political Science. He has industry experience within the following sectors: Technology; Banking & Financial Services; Advertising; Fast Moving Consumer Goods and Telecommunications. He has had commercial experience within the following countries: France; United Kingdom; Switzerland and United States of America, or more specifically within the following cities: Paris; Lyon; London; Zürich and New York NY. His personal achievements include: successfully re-positioned major global brands; launched brands in emerging countries; developed end-to-end marketing optimization process; established global brand management frameworks and drove go-to-market for new technologies. His service skills incorporate: marketing optimization; brand management; brand re-positioning; go-to-market strategy and agencies management.
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20 Consulting Service Examples
There are currently some 650 Accredited Consulting Services (ACS) provided by Appleton Greene worldwide. Here are 20 examples.
01. Business Administration
02. Business Development
03. Business Optimization
04. Crisis Management
05. Customer Development
06. Energy Management
07. Entrepreneurial Leadership
08. Investment Consulting
09. Marketing Optimization
10. Marketing Transformation
11. Process Excellence
12. Product Management
13. Risk Analysis
14. Soulful Leadership
15. Sustainable Development
16. Transitional Growth
17. Value Innovation
18. Retirement Planning
19. Change Strategy
20. Product Lifecycle
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