In the financial market, it is difficult to increase returns without taking on more risks. But for most companies, selective risk reduction is one of the key factors to improve return on investment; smart strategists will use a phased strategy to lower risk. In the past, when the media environment was relatively stable, the risk of marketers was relatively small; but now, marketers must use the same tactics to control risk. Even in a decentralized marketing environment, marketers must work to ensure that 75% to 80% of marketing spend is spent on proven media to spread successful information, and the level of marketing spending on this information is already in practice. Confirmed. Even for these successful marketing programs, marketers should test and validate, as many of them have done before. The remaining 20% ​​to 25% of marketing expenses should fund well-planned experimental projects.
A better way to judge the investment return principle adopted by marketing organizations is to randomly select a point in time to assess the breadth and quality of the media or information experiments that the organization is conducting during this period. Some trials are simple, such as trying to increase the level of marketing spending on successful information or putting it on new media; reducing the frequency of direct mail delivery, seeing if the response rate has changed; and experimenting with new areas Advertising information, etc. Other trials are very different from everyday marketing methods, such as experimenting with new information and new media for a growing group of profitable customers. However, it is a pity that marketers who try new methods may not be able to keep up with the pace of changing media formats, or when the market changes, they have to bear a lot of risk because they are pressing on untested marketing plans. But while adopting these unique marketing options may be a huge success, it may be too risky to abandon most of the existing successful marketing programs.
To improve the return on investment, you must carefully measure the return on investment – ​​a concept that seems simple, but for companies that look at marketing spending and measure success in a narrower perspective, it makes a difference. A very effective approach is to record all expenses and ensure that the salesperson communicates the right information to the right consumer. Previously, marketers only had to evaluate marketing budgets, but now, it's important to consider all the expenses of the marketing plan, including at least all sponsorships, major media spending, and related sales mortgage fees.
Many companies must also include promotional expenses and store-level spending. A more effective approach is to record all expenses and ensure that marketers pass the right information to the right consumers. It is necessary to make expenditures transparent, but it is not enough to do so. While all marketers track the progress of marketing projects, few end-to-end tracking, such as tracking the impact of marketing spend on brand drivers, and then tracking the impact of these drivers on consumer loyalty, then consumers The impact of loyalty on income and profit is later whether this marketing expenditure has brought about the expected profit growth. Only by tracking from start to finish, marketers can not only understand the current return of marketing plans, but also understand why these plans are effective or ineffective, which is important to improve future returns.
Most CMOs are now preparing to incite leverage that will increase the return on their marketing investments. They should start by integrating existing research data and data sets, which are often left in the file cabinet. Then, based on this information, we will develop a unified solution to improve the return on marketing investment through the following steps. Transparency of spending is achieved by identifying all important items in consumer communications spending, even including spending items that are not within the marketing function. On the basis of similar comparisons, simple and uniform standards are used to adjust the distribution of marketing expenditures among brands and regions. These standards should distinguish between “maintenance†marketing investment and “growth†marketing investment, and distinguish successful carrier investment. Invest with experimental carriers. Identify the more important drivers of each brand and track the impact of these drivers on different consumer groups and across different media channels.
Marketers will also find opportunities to selectively invest in new tools, capabilities and relationships as they delve into the return on investment.
Exciting developments are just around the corner. Some emerging technologies have begun to track the specific details of consumer engagement with the media and relate these details to the actual purchase behavior of consumers. The new modeling approach combines econometric tools with brand driver analysis revealed by consumer research to create more sophisticated simulation scenarios. As third-party advertising companies, market research organizations, and media companies, they must also work hard to respond to the changing marketing environment, and they may be willing to adopt new ways of collaboration. In addition to adopting new tools and technologies, marketers need to change the way of thinking and behavior that has followed the golden age. This imperative transformation is a major challenge for most marketing organizations, advertising agencies and media partners.
To strengthen the return on investment thinking and incorporate this way of thinking into everyday marketing plans, companies must make a series of changes to their processes, culture and people. Some of the changes are symbolic, such as vetoing a “sacred and inviolable†sponsorship that the CEO likes after a cool investment return analysis. Other changes include formal training for marketers, training them on how to target and how to use the necessary tools and processes. Business planning processes, performance assessments, and team structures also need to change. Unless the organization's way of thinking and behavior are changed, efforts to increase the return on marketing investment will only go to waste. Marketers who want to achieve high returns should first consider themselves as investment managers of marketing budgets. This may be more difficult and time consuming than relying on old rules of thumb or new analytical methods, but in today's marketing environment, this is the way out.
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