06_81_rubrique_markcom
12.05.2006
19:39 Uhr
Seite 81
Photo: Andres Lejona
xxxxxxx ROI (return on xxxxxxxxx investment) marketing is all about maximising the return on your marketing investment, and getting to those customers who have yet to arrive.
M A R KC O M
Upgrade your marketing MarkCom, the Luxembourgish Federation of Communication Consulting Agencies, is currently made up of nearly 15 agencies specialising in publicity, communication, and marketing. www.markcom.lu
With declining budgets, decision makers are paying greater attention to the results of their expenditures. The phrase ROI (return on investment) is now commonly spoken by Chief Marketing Officers (CMOs) who need to justify high expenditures in balance with sales activities. ERM (effective response marketing) is a strategy based on two elements: ROI and CCA (customer-centric approach). Optimising investment return is really a way of upgrading the function of marketing. Using a select series of indicators, a company can effectively measure its performance. ROI involves looking at what happened before, looking at the current business model, and trying to test the parameters for the future. The eventual model is the company’s record plus the record of the market players. What a company can hope to achieve is not just a change in the paradigm of the marketing but possibly a change in the business, a reorganisation of the structure of a company, or a shift in the focus of the production or service offering. ERM is effective response marketing. It can sometimes be a hard sell to companies because it can show up weaknesses and many people within companies are resistant to change. It creates links between a company’s departments to improve communication (i.e. between the marketing and the sales department who might habitually ignore each other). But ERM offers a longer-range picture and is a constant
monitor of progress. This is especially timely in light of the accelerated rate of change in the business world. Dinosaur businesses become extinct; they must continuously evolve and react to global opportunities to survive. An example used in the industry of a global company that successfully transformed itself through ERM is Samsung, which underwent a serious repositioning in tandem with an augmentation of its marketing budget that has paid off enormously. In less than ten years the company went from “a purveyor of cheap TVs and microwaves to one of the world's most innovative and exciting brands” (Garvin School of Intl Mgmt). Larger companies like Samsung might employ more complex CRM (customer response monitoring) techniques, but a small company can benefit in similar ways with basic Excel sheets. The concept is the same – to create a direct link between investment and return. It is a more professional and customer-centric approach. Instead of focussing your marketing efforts on the 20% of industry customers you have, ERM seeks to plug the hole in your marketing investment bucket, by investigating how to attract the other 80% as well. || Mary Carey
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