Marketing ROI: How to Plan, Measure, and Optimize Strategies for Profit
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A 2004 Berry-American Marketing Association Book Prize Finalist!"This book is an indispensable, step-by-step guide to calculating what works and what doesn’t in the notoriously difficult to measure areas of marketing and public relations. When a CEO wants to know what he or she got for their investment in marketing, the processes and formulas presented in Marketing ROI help get to the most credible answer possible. More importantly, marketers can now confidently eliminate waste from their budgets and improve productivity."-Tom Nicholson, Former Director Public Relations and Communications, Sears, Roebuck and Co.A powerful program for making every marketing dollar count by accurately measuring its impact on your company's bottom lineReturn on investment (ROI) is today's key business tool for measuring how effectively a company uses its assets, yet few marketing managers receive any ROI training at all. Marketing ROI changes that, showing marketing practitioners at all levels how to employ ROI and other financial tools to quantify their organizations' strategic marketing decisions and maximize the incremental profits generated by each dollar invested in their marketing programs.The first comprehensive, easy-to-follow guidebook on using ROI to improve the effectiveness of virtually any marketing program, this results-focused book provides step-by-step guidelines on how your organization can: Align marketing measurements and goals with operational objectives Track marketing performance and provide feedback for improvements Include all decision makers in the success of its marketing program For far too long, marketing efforts and expenditures have been seen as a world unto themselves, logically and logistically separate from labor, plant, and other more traditional costs. Marketing ROI presents a program for removing the veil of mystery from marketing efficiency by measuring the validity and success of marketing investments and dramatically improving the ROI for each dollar spent in your organization's marketing program."The goal of this book is to serve as a comprehensive guide for effectively using marketing ROI to improve profitability. There is tremendous opportunity to have an impact on profitability at the campaign, customer, and corporate levels. The information presented will provide insight to executives, marketers, financial managers, and research analysts."—From the IntroductionMarketing ROI presents an idea whose time has come. The idea? That marketing is an integral component of any organization's profitability (or lack thereof), and it is reasonable—in fact, beneficial—for executives to expect a measurable return on marketing investment, just as they expect returns on capital, technology, and other essential expenditures. Built around a straightforward formula that can be adapted and implemented by organizations to match their own operational and financial requirements, Marketing ROI follows a three-step process for introducing, understanding, and implementing marketing ROI: Understand ROI Principles: Introduces key concepts for and the rationale behind marketing ROI Build the ROI Formula: Explains techniques and examples for measuring marketing ROI and aligning measures with decisions Applying Marketing ROI: Provides methodologies and strategic applications for implementing, standardizing, and managing marketing ROI Today's increasingly intense competitive environment, coupled with constant demands to improve shareholder value, has ratcheted up the pressure on companies to increase spending efficiency whenever and wherever possible. But with traditional paths to profitability more crowded than ever, companies are finding it virtually impossible to gain meaningful ground while using the same concepts and calculations as their competitors. Businesses need an approach that compares virtually every marketing investment with its incremental return, improves the measurements of the financial value of an organization's marketing investments, and ensures that the underlying principles remain valid.Marketing ROI presents a new and better way to strengthen your competitive position by solidifying the tracking of your marketing expenses. Let it show you a proven path to accurately measure the efficiency and effectiveness of each of your marketing expenses—from targeted price reductions to direct marketing campaigns to revamped distribution channels—and use that data to increase the bottom-line return for every marketing decision you make.James Lenskold is principal of Lenskold Marketing Group, a specialist in developing strategic marketing programs and implementation services. A world-renowned speaker and consultant on marketing ROI and multichannel marketing strategies, Lenskold is a former marketing executive with AT&T, where he developed strategies and implemented consumer marketing programs that helped AT&T evolve from a telecommunications monopoly into a respected innovator and competitive marketing organization.
AcknowledgmentsIntroductionPt. IUnderstanding ROI PrinciplesCh. 1Profit is the Goal, ROI is the Measure3Ch. 2Getting the ROI Basics19Ch. 3Marketing ROI is Different33Ch. 4More Measurable than Ever39Ch. 5Marketing ROI Process47Pt. IIBuilding the ROI FormulaCh. 6Measuring Return on Investment53Ch. 7Investment and Return Patterns71Ch. 8Profit Dynamics and Key Principles87Pt. IIIApplying Marketing ROICh. 9Adopting the Marketing ROI Process113Ch. 10Managing Corporate-Level Profitability125Ch. 11Managing Customer Profitability149Ch. 12Customer Pathing Strategies163Ch. 13Managing Campaign Profitability173Ch. 14The Measurement Process209Ch. 15Strategic Profit Management223Ch. 16The Implementation Process239Notes251Index257
