Matthew Palmer, Deloitte Consulting

Matthew Palmer,

Deloitte Consulting

Marketing Effectiveness

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The 7th IDM B2B Marketing Conference

Matthew Palmer

• Head of Deloitte’s Financial Services Marketing practice

• Leads Deloitte’s offerings on brand, marketing cost reduction and operating models

• Background in consulting and advertising

• Typical projects include: – Corporate transformation

– Brand valuation and optimisation

– Sales and marketing effectiveness

– Channel strategy

– Operating model improvement

• Clients include: – Lloyds Banking Group, HSBC, Aviva, Standard Chartered

Bank

– IBM, Microsoft, Sony, BT, Vodafone, T-mobile, Siebel, SAP

– Diageo, Pernod Ricard, Habitat, Royal Mail, Centrica, VOSA


What will we cover today?

• What has changed and what has stayed the same post recession

• How to get your marketing budget approved - and the executive board on your side

• How to increase marketing ROI

• How to cut costs without slashing performance


Which trends have changed, which have stayed the same

• Increasing power of individuals on corporate buying decisions (especially in FS and technology)

• Longer sales cycles • Wider DMU • Exploitation of social media and

opinion management

• Getting marketing’s voice heard• Focus on lead quality and

management • Getting sales and marketing

working together better • Cost cutting and effectiveness • Accountability and measurement • Channel and partner

management • Differentiating offerings • Making global work

Marked change in trend Continuation of trend


We will focus on three main areas

• Increasing power of individuals on corporate buying decisions (especially in FS and technology)

• Longer sales cycles • Wider DMU • Exploitation of social media and

opinion management

• Getting marketing’s voice heard• Focus on lead quality and

management • Getting sales and marketing

working together better • Cost cutting and effectiveness • Accountability and measurement • Channel and partner

management • Differentiating offerings • Making global work

Marked change in trend Continuation of trend


Getting marketing’s voice heard

In order to help the organisation attain its goals Marketing needs to be able to influence at board level

The challenge facing marketers is making sure the rest of the business understands the value they create.

Our research found that C-level execs do not have a common understanding of marketing and its role in the company


The CMO’s view


The CFO’s view


The CEO’s view


81%

of CEOs identified marketing as a key driver of growth

84%

of CEOs identified marketing as being crucial to devising strategy

1in3

CFOs did not believe that marketing is crucial in determining strategy

16%of Board level discussions are about marketing according to CMOs.

CEOs believe that the

figure is nearly double at 33%

Board level views of marketing are mixed


Impact of marketing’s lack of influence

Seen as a cost

Not seen as ‘Commercial’

Link between marketing

metrics and company

performance not

understood

Limited voice

Not involved in key

decisions

Constant pressure to

justify expenditure and

reduce costs

Budgets frequently

rejected or slashed


Marketing gets its budget approved when it:

• Actively engages with Finance and other functions throughout the year

• Uses easy to understand metrics to show outcomes of past programmes and how these relate to proposed activities

• Can explain where and how money is spent • Uses zero based budgeting linked to specific programmes and

outcomes • Prioritises its own spend with stretch and retrenchment options • Presents options to stop some activities to pay for others • Clearly links programme outcomes to corporate targets (eg revenue

growth, EBITDA, free cash flow)


CMOs recognise this as an issue and are trying to improve measurement and accountability

What are your top three marketing issues?

44%

39%

34%

28%

24%

CMOs acknowledge that accountable and effectiveness are important

‘By 2012, the CMO’s priorities will shift from creative brand building to an accountable, business-oriented, customer loyal-driven focus in 55% of organizations’

‘Financial accountability will be an imperative for 60% of marketing’s budget by 2012, up from less than 20% in 2007’

‘Marketing strategy and processes will need to change radically during the next 5-10 years in order to answer to pressures to manage costs and drive revenue’

Analysts predict that marketing accountability and effectiveness will become

increasingly important


How to cut costs while increasing revenue and profits


Cost cutting


Some common cost cutting mistakes

• Cutting costs by the same amount across the board

• Choosing an arbitrary percentage cut

• Trying to do everything with less money

• Failure to plan for budget challenges like ‘tell me what you could do with 20% less money”


So what works?

• Improve your focus: concentrate on the areas that add most to your business

• Only pay for what you need

• Make sure you get what you pay for

• Instil a real culture of fact based decision making, and act on it • Become more accountable

• Improve relationships with the rest of the business, especially finance


Improve focus

Value Drivers

Asset Value Revenue Growth Operating Margin

Maximize Brand Equity

OptimizePricing

Retain & Grow Current Customers

Acquire New Customers

Profit From Higher Margin Products /

Customers

OptimizeMarketing Spend

Maximize Price

Potential

Capture Price

Potential

Increase LENGTH of Current Relation-

ships

Increase VOLUME of Current Relation-

ships

Increase BREADTH of Current Relation-

ships

Penetrate New

Customer Segments

Increase Share in Current

Customer Segments

Realign Products

& Channels

Improve Marketing Program Spend

Efficiency (MRM)

Optimize Marketing Resources

Leverage Brand Value

Create Innovative Products

& Services

Strengthen Brand Value

Increase Shareholder Value

Value Drivers

Asset Value Revenue Growth Operating Margin

Maximize Brand Equity

OptimizePricing

Retain & Grow Current Customers

Acquire New Customers

Profit From Higher Margin Products /

Customers

OptimizeMarketing Spend

Maximize Price

Potential

Capture Price

Potential

Increase LENGTH of Current Relation-

ships

Increase VOLUME of Current Relation-

ships

Increase BREADTH of Current Relation-

ships

Penetrate New

Customer Segments

Increase Share in Current

Customer Segments

Realign Products

& Channels

Improve Marketing Program Spend

Efficiency (MRM)

Optimize Marketing Resources

Leverage Brand Value

Create Innovative Products

& Services

Strengthen Brand Value

Increase Shareholder Value

Be clear how your programmes, products and target

customers contribute to corporate objectives


Get what you pay for, only pay for what you need

• 3rd party suppliers services and SLAs

• Don’t over-specify or gold plate

• Standardise where heterogeneity doesn’t pay

• Many suppliers are trying to grab share coming out of the downturn: use this to negotiate

• Demonstrate your control over marketing spend to the CFO and finance community


Make decisions based on facts, become more accountable

• Understand how your money is being spent – Audit of marketing spend based on effectiveness and value

• Test, analyse, learn and implement – So you can maximise returns on your marketing spend

• Use the knowledge to approach the leadership team to discuss opportunities for cost reduction or growth

• Involve finance, commercial and other parts of the business to create joint programmes


Increase revenue and profits


Most effective changes to boost revenue and profits are often

• Improve lead management – Quality – Fix leaky buckets – Recycle leads

• Focus on winning brands, products and segments

• Free up local offices to be entrepreneurial within the overall company strategy

• Introduce formal programmes to iudentify what works in your organisation and roll it out


Further information

Marketing in 3D Benchmark

Take part in our new online Marketing in 3D Benchmark survey

www.deloitte.co.uk/marketing

Marketing in 3D Report

Read the summary of key findings from our latest

research

Contact

Matthew Palmer

Tel: +44 (0) 207 007 7293

Mob: +44 (0) 07764 939920

Email: [email protected]

Structural Cost Cutting in Marketing

Read the summary of key findings from our latest

research

Documents

Matthew Palmer, Deloitte Consulting