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Marketing attribution modeling

I just found Mr. Kfir Pravda’s article “Revenue attribution 101”  Mr. Pravda’s key question was: How do you measure revenue attribution – money and profitability for marketing activities. He had split the revenue attribution measurement according to touchpoint sequence from last to first and combined as customer journey. I agree with his measurement frame and guidelines. It’s a great article. I would recommend reading it.

Mr. Pravda’s article got me thinking about how do I actually approach this subject in my planning and implementation process.

First: I always start attribution modeling from owned channels

  1. What is their capacity to bring traffic and visitors (eg. stores and online)?
  2. What is their capability to convert recognized customers?
  3. What do people actually look in to and buy?
  4. Who are the customers actually – what kind of attributes, motives, interest contexts etc. do they share?

Once you have your own channel conversion, increased owned media demand generation impact and marketing automation tuned effective for the first time purchase t’s time to get more people interested.

Second: With the knowledge about contexts, customers and motives that generate interest and traffic it’s rather easy to recognize interfaces and channels that enable you to present a relevant and appealing messages for customers. This first touch planning is very much data directed iterative testing and learning process. What ever works, you scale up and automate in any given channel from online to direct marketing, telesales, face-to-face sales or advertising. I do prefer channels that I can measure direct ROI from, but I’ve also seen how media marketing has created stronger customer relationships and willingness to pay premium. These secondary KPI’s are about brand attributes, preference and willingness to pay premium.

Third stage is about learning and planning how to increase customers’ basket size, purchase frequency and expand customer’s buying behavior to more than one category. This stage is about using marketing automation technology in order to create service automation customer care programs for great customer experience and sales.

This process is completely founded on customer journey analysis and understanding in an omni-channel environment.

I think you might find these articles interesting:

Admap best practice article: How to map customer journey
Marketing’s new and re-designed 7P’s
Managing Brand – The most profound KPI’s and measures /
From marketing automation to service automation
Marketing Do or Die – managing customer interfaces

What about others? How do you approach marketing attribution measurement and planning in omni-channel environment?

About Author

Toni Keskinen ,Chief Editor for Future CMO Movement (http://futurecmo.org)
Toni.keskinen(at)futurecmo.org
http://www.linkedin.com/in/tonikeskinen

The CMO Survey 2013 & insights – What CMO’s should do now?

Screen Shot 2013-05-29 at 8.41.47 AM

The Duke University’s CMO Survey 2013 results highlighted again the need for marketing and CMO’s to carry more responsponsibility and integrate better with the corporate management and operations. It seems to me that marketing is facing the same evolution that car engines have gone thru since 1960’s. In the 60’s car engines were large, heavy, powerfull and impressive but their gas consumption was just terrible and their efficiency unacceptable in current evaluation. Currently engines are much smaller but deliver a lot of power with very low gas consumption. The big and impressive modern engines have amazing power with acceptable gas consumption. The engine game is all about efficiency, as it should be.

This is the case that CMO’s are facing now too. The way to get there is very much about understanding the big picture (customers, their needs and drivers, choice criteria, their cross-channel behaviour and corporate capacity to serve and deliver great customer experience across touchpoints), managing analytics and customer interface operations. The multitude of digital and analogical touch points has exploded and require very much consideration in order to come up with the essentials and focus on what matters. Marketing budget, according to CMO survey, is currently 10,6% of corporate overall budget and if we add to that retail, sales, customer service, customer managament related technology and online service investments, the customer interface investment in total is eventually what runs the company. This combination is what matters most and should be considered as an entity that must be analyzed and managed in an integrated way. See article Marketing do-or-die -managing customer interfaces

According to the CMO survey 2013:

  • 6% of marketing budget is allocated to marketing analytics and it is expected to grow to 10% over the next three years. However, only 30% of company’s projects use marketing analytics and leverage insights from it
  • Social media share of budget is currently 8,5% and it is expected to be 11,5% by the end of the year and 21,6% in the next five years. However, for the past several year the level of social media integration to marketing strategy has remained at the level of 3,8 in a scale 1=not integrated to 7=very integrated. The spending is expected to more than double but even in current situation the value social media could deliver is not being effectively harnessed.
  • The CMO’s role is weakening in the areas of CRM, new product development, sales, pricing, innovation
  • The company’s next 12 months expectations though highlight success in customer retention and profit increase and the companies are concentrating on diversification strategy (new products – new customers) and organic growth.

To me these results mean, that CMO’s are actually shying away from the corporate center. The best companies are already using Customer Journey design tools and managing customer interfaces in an integrated way, which really enable CMO’s to fine tune their engines and deliver much higher return on investment. These companies are rare though. The results show that in majority of cases CMO’s and marketing department’s role is weakening. Over time this can only mean declining budgets or declining role of CMO.

We are currently living in very rapidly changing environment from which the marketing has best understanding and the board has least understanding. The boards are now more interested in customers than ever, and they need answers. Sheryl Pattek’s (CMO for Forrester research) article highlights how National Association of Corporate Directors (NACD), a group of board-of-director members from the US’s most prestigious companies is discussing the topic: How to keep corporate boards relevant in the 21st century. This is Sheryl’s view on the discussion:

The discussion that morning focused on the need to respond to and keep pace with the rapid change in customer behavior to stay competitive. It also addressed how current board members could keep up with the evolution of customer touchpoints to understand the new digitally-based strategies that are increasingly being shared with them. What I found striking about the discussion after some reflection was that the realization of the critical importance of customer behavior on the future success of top companies has made it all the way to the boardroom. The age of the customer that Forrester first identified in 2011 has really arrived and goes well beyond marketing. Why now? Corporate boards are starting to realize that to provide the strategic guidance and governance that their role requires, they need to better understand customers and how the relationship between them and the companies they direct are changing. And they need to understand it fast. The market is moving and changing too rapidly to be left behind.” (see the full article here: CMOs, Is Joining A Board of Directors Part of Your Career Plan? If Not . . . It Should Be.)

This is the time when marketing can really, finally become corporate center – driver for management change and change management.  Mr. Steven Cook, the founder of Fortune CMO network has made a great presentation about this subject with some cases. Enjoy.

 

SEE ALSO:

FutureCMO definitions

Lost insights and Corporate Blind Spots

Business Design with customer centricity

How to enable smart company and avoid corporate autism

Author: Toni Keskinen, Marketing Architect & Customer Journey Designer

http://www.linkedin.com/in/tonikeskinen

Join FutureCMO Movement LinkedIn Group here
 
 
 
 

Christine Moorman is the Director of The CMO Survey®
http://youtu.be/gqOGVZE-tMo

The CMO Survey 2013 results in full:

Brand as a road sign – foundation for a Customer Journey

Branding is a quite debated management prioritization area right now. In a challenging financial environment companies are often looking for rapid payoff instead of long-term profitability. These two approaches used to be considered as opposites and in some cases they still are. In my opinion it is just ignorance. The communications scene has changed so dramatically over the past decade that former rules no longer apply.

One thing has not changed: Brand is the No1 contributor  to the customer journey dynamics.

Brand = demand (or the lack of it) 

The importance of the brand has not diminished, it has been amplified in the border-less global economy. What has been changed is the way how you create great brands. Mass-media advertising used to be the only way, that is no longer true.

Brand demand or sales

If we consider the brand from the customer’s perspective, it is a road sign. Well known and respected brand equals the highway to destination and un-known brand is a detour without a map. Brand is a very strong heuristic tool and has a lot of things attached to it. Take a look at this road sign:

Cities are very good example of how brands work. You can imagine these cities, what kind of contexts you connect them with, who you would travel there with etc. The one below is a little village I am coming from. To the world this city is just a label without anything attached to it. Only thing interesting about it is the reason it has been listed with the others above it. To me it represents home.

Your current Brand health and status as a road sign determine how you should allocate your marketing investments and budget. The stronger your brand is, the more you should invest in your own channels and experiences. On the other hand, if you are representing a weak brand, you need to deliver such experience that your brand becomes home to those who choose it against all odds. They can then tell others how great your brand is to the others living oblivious of your amazing brand. That is how you can deliver optimal return on marketing investments (ROMI)

See next:

The most meaningful Brand KPI’s https://futurecmo.org/2013/02/01/managing-brand-the-most-profound-kpis-and-measures/

Customer Journey stage 1: Brand as a platform

Customer Journey stage 2: Initiation

Customer Journey stag 3: Choosing and buying – cross-channel influence

How to map and study Customer Journey

Author: Toni Keskinen, Marketing Architect & Customer Journey Designer

http://www.linkedin.com/in/tonikeskinen

Join FutureCMO Movement LinkedIn Group here

 

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