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building superior brands... while focusing on accountability of promotional expenses and investments Frans Cornelis managing director Group marketing and communications NIMA Expert Class Accountability – December, 2009

Frans Cornelis

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Page 1: Frans Cornelis

building superior brands...while focusing on accountability of promotional expenses and investments

Frans Cornelismanaging director Group marketing and communications

NIMA Expert Class Accountability – December, 2009

Page 2: Frans Cornelis

December 2009 NIMA Expert Class Accountability2

marketing basic philosophy 4 x “P”

P P

P P

P = product = what you offer

(in our case, services! And not just services, it is a whole methodof working, which is what we call a “Concept”)

Accountability: Cval, Depreciation, many others, see also price

P = place = how you offer productin all the places and moments where it is needed

(branches, people,web, business partners, channels, licencees,franchisees….)

Accountability:Channel costs, Transport & Service costs, Training costs, etc

P = price = what you ask in return for your product

(a fee, a percentage, otherelements like servicecosts, memberships, orbarter elements)

Accountability:

- Contribution- Direct Product Profitability- Act. Based Costingsee also Product

P = promotion = how youensure people know aboutyour product

(and how you make them desire your product more thananyone else’s, by using PR,advertising, sponsoring, allother brand building actions)

Accountability:

- See this presentation!

Own people development

Processdevelopment

Providing physicalevidence

Page 3: Frans Cornelis

“promotion” accountability - basics

• focus on accurate costs measurements, versus:• accurate effect measurements

• costs: set up a proper measurement system• effects: count resulting additional gross margin or Ebita,

NEVER just additional revenues

• involve your control/finance department• involve your agency/advisors/suppliers

• next sheets: Randstad examples

December 2009 NIMA Expert Class Accountability3

Page 4: Frans Cornelis

December 2009 NIMA Expert Class Accountability4

how society sees a corporate identity(2003 actual service industry example - based on Leeflang/van Riel/Fombrun/Cornelis)

Overall viewin a (mass) market

by the generalpublic

Correlationfactors

(Potential)Clients -58%

(Talent/Flexworkers)

(Potential) Workenvironment - 10%

(Potential)Investment - 14%

Social/PoliticalImage - 12%

NB: others - 6%On the vertical axis

Clear Message Reinforce Satisfactionplus the right with the result

Sufficient spending image (experience)20 to 25% 20 to 25% 50 to 60%

Page 5: Frans Cornelis

December 2009 NIMA Expert Class Accountability5

also a guide for investments and ROI!

Overall viewin a (mass) market

by the generalpublic

Correlationfactors

(Potential)Clients -58%

(Talent/Flexworkers)

(Potential) Workenvironment - 10%

(Potential)Investment - 14%

Social/PoliticalImage - 12%

NB: others - 6%On the vertical axis

Clear Message Reinforce Satisfactionplus the right with the result

Sufficient spending image (experience)20 to 25% 20 to 25% 50 to 60%

Page 6: Frans Cornelis

what are the tools used?

Clear media and DM advertising messages

Consistent and defined Brand image projection long term

Strong concepts that are executed in a superior way (=resulting in high customer satisfaction)

Labor market communications in media and PR etc

Consistent and defined Brand image projection long term

Best people methods in selecting, motivating, promoting etc plus meaningful work (=high employee satisfaction)

Specific IR press meetings, annual report, one-on-one’s etc

Consistent and defined Brand image projection long term

Strong management of operational results and shareholder value

Active press, PA coverage of defined issues vs stakeholders

Consistent and defined Brand image projection long term

Achieving effects in society on desired issues

Marcom

Int.comm

+HR

Ext.Comm

+IR

Ext.Comm,

PA

December 20096 NIMA Expert Class Accountability

Page 7: Frans Cornelis

how society sees a corporate identity

Clear Message Reinforce Satisfactionplus the right with the result

sufficient spending image (experience)20 to 25% 20 to 25% 50 to 60%

Correlationfactors

mostlyawareness

related

mostlyimagerelated

mostlyoperations

related

December 20097 NIMA Expert Class Accountability

(Potential)Clients -58%

(Talent/Flexworkers)

(Potential) Workenvironment - 10%

(Potential)Investment - 14%

Social/PoliticalImage - 12%

NB: others - 6%On the vertical axis

Page 8: Frans Cornelis

what gets measured, gets done: actual examples

(Potential)Customers -58%

(Potential)Employees - 10%

(Potential)Investors - 14%

Social/politicalImage - 12%

Clear message Stressing the Satisfaction plus sufficient right image with the result(ad) spending components (experience!)

20 to 25% 20 to 25% 50 to 60%

n =966 n=857 n=972

MerkTop of mind bekendheid

Spontane bekendheid

Geholpen bekendheid

Top of mind bekendheid

Spontane bekendheid

Geholpen bekendheid

Top of mind bekendheid

Spontane bekendheid

Geholpen bekendheid

KPN 50% 72% * 46% 71% * 53% 76% *KPN Telecom 4% 14% 98% 4% 10% 96% 3% 19% 96%KPN Mobile 0% 5% 76% 0% 3% 86% 0% 12% 84%PTT Telecom 12% 22% * 7% 10% * 8% 19% *

Hi 0% 5% 77% 0% 3% 79% 1% 10% 75%Hi <34 jr 0% 6% 91% 0% 11% 92%Libertel 10% 60% 96% 8% 49% 97% 7% 50% 96%Telfort 3% 33% 93% 3% 26% 94% 3% 30% 91%Dutchtone 2% 33% 86% 2% 28% 88% 2% 33% 86%Ben 4% 54% 90% 7% 44% 91% 4% 51% 90%Vodafone 0% 2% 51% 0% 3% 47%Orange 0% 0% 26% 0% 1% 27%Q 0% 0% 8% 0% 1% 8%

One.Tel 5% 17% 66% 3% 10% 67% 3% 16% 66%Tele2 8% 23% 75% 15% 29% 85% 12% 33% 81%Versatel 0% 3% 37% 0% 1% 43% 0% 5% 46%Priority Telecom 0% 0% 17% 0% 0% 12% 0% 1% 14%Scarlet 0% 1% 12% 0% 0% 12% 0% 1% 9%Primus 1633 0% 2% 13% 0% 1% 7% 0% 1% 7%

okt-00 sep-01 okt-01

©C

opyr

ight

200

1 Co

nsul

t

KPN Telecom, Siemens, Microsof t, HP en IBM arethe strongest brands

MCI Worldcom

0

50

100

50 100Brand Stature

Bra

nd V

itality

Iomega

Novell

Lotus

NECDigital

Dell

Fujitsu

Intel

Olivetti

Tulip

Toshiba

CompaqApple

IBM

Hewlett-Packard Microsoft

Lucent Technologies

BT/British Telecom

AT&T One.tel

Versatel

Telfort

Tele2

UPC

EricssonNokia

Siemens

0

Ben

FlexiBelDutchtone

Hi

Libertel

KPN Telecom

Decision makersVaste Telecom

Mobiele TelecomComputermarkt

2000

ReputationIndex Pulse

ReputationIndex Pulse

Effect measure-ments of job ads,Best plave to work

ReputationIndex Pulse

0244 CM (v/h 0403)

% Tevreden over levering% Tevreden over monteur

% Goed functionerend opleveren

% Tevreden over factuur

% Klanttevredenheid over totale keten% Tevredenheid advies verkoper% Maken tweezijdige afspraak% Nakomen tweezijdige afspraak

% Beantwoording < 20 sec.

% In 1x goed functionerend opgeleverd

TNS variousTNS

BAV

e.com ranking

Factiva ranking

employee turnover

annual HR culture survey

share performance

MSCI, DJSI,GRI, issue list

RI

net promotor scoresales growthpricing power

December 20098 NIMA Expert Class Accountability

Page 9: Frans Cornelis

Randstad global marketing cost categories(managed for marketing by F&A depts)

December 2009 NIMA Expert Class Accountability9

Outdoor window / street mediaTV media (including cinema)Radio mediaIn-store merchandising and branding mat.External design and production expensesMarket researchSponsoring and Public relationsRelationship management expensesConsultancy costsCorporate branding chargeMonthly advertising and marketing costsMonthly external & supportive expensesOne-off project expenses

Advertising and marketing expenses

RevenuesExpenses marketing personnel

Adv. expenses as % of revenuesA&M exp.&pers. exp. as % of revs

Supportive exp. as % of advertising exp.

Supportive expenditure ('overhead', goal max. 11%):

external design and production expenses, market research, consultancy costs and various advertising costs

Page 10: Frans Cornelis

2002 B2Cindirectbenchmark• Actual example

of external benchmark

• (10 similar companies)

• Interesting specifics:

Trade spending, sales force and promotions

• TV use

• Light market research but still 2%

• Compared with packaged consumer goods: even heavier advertising and trade spending

December 200910 NIMA Expert Class Accountability

Page 11: Frans Cornelis

shareholder value champion:benchmarks for judging internal marketing efficiency

Above the line:

gross media andawareness/image

sponsoring

costsCo

ncep

t &

Pro

duct

ion

cost

s

Below the line:

costs of

Direct Mail,

brochures, relationship mgmt

etc.

85% minimum 15%

1-2%Measure

Efficiency action By whom?

Media rebates (15-50%) CMOTotal spending level BUPlanning efficiency BU

Overall agreements CMO

CRM, DM Response, etc. BU

Campaign evaluation BUEvaluation policy, partners CMO

Financial discipline All

December 200911 NIMA Expert Class Accountability

Page 12: Frans Cornelis

December 2009 NIMA Expert Class Accountability12

supportive external marketing expendituresas % of total marketing expenditures (“overhead”): what does that look like?

0%

5%

10%

15%

20%

25%

30%

35%

40%

RNL* TT

Capac

Yacht N

L

Yacht D

E

Belgi

um

Fran

ceSp

ain

Italy

Germ

any

R-UK

MW

AUSA

Canad

a

Portu

gal

Suiss

e

Denm

ark

Swed

en

Polan

dactual sheet with %”supportive costs” from one year to the next by country

Page 13: Frans Cornelis

tool to drive down internal costs:web-based international MRM system

• ‘one brand, one voice’

• central design, central sourcing

• webshops for photo database, designs, marketing materials, housing and

branding elements

• design wizards

• uniformity/consistency

• headcount savings -/- 20 %

• savings design/printing/other -/- 25 %

December 200913 NIMA Expert Class Accountability

Page 14: Frans Cornelis

example: web communications toolkit

web getting close to other mass media in reach and efficiency

important for image buildingalso

network-centered functions grow (“web 2.0”)

marketing techniquesbecoming more known

December 200914 NIMA Expert Class Accountability

Page 15: Frans Cornelis

awareness: tools, initial USA cost estimatesexamples from work sessions – in CPM, reach(cost per thousand, subjects reached/contacted)

TV advertising Peak, all public $27 > 1.000.000Radio advertising Peak, AB+ (AM drivetime) $6 >100.000Web newsletter ad AB+ business audience $24 >100.000Newspaper ads Upmarket adults $39 >1.000.000Magazines Upmarket adults $22 >50.000Outdoor adv. Large $728 >>500.000Event sponsoring Golf event $500.000 approx 30Event sponsoring Concerts (popular/stadium) $1.000 approx 40000Trade show Branded Booth + sponsor $5.000 app. 300 - 5000Seminar Regional/community $10.000 50 maxClub/comm. Sponsor Business club $50.000 200 maxClub/comm. Sponsor 4th July concert $100 5000?DM only small $1.100 any numberDM + gift national $3.500 any numberSales call Phone $10.000 any number

Conclusion: awareness effects vs costs of various marketing communications tools vary widely.

Selection of optimal tool critical, mass media can be veryefficient if scale, circumstances permit efficient use

December 200915 NIMA Expert Class Accountability

Page 16: Frans Cornelis

awareness related to media planning efficiency

€ -

€ 140.000

€ 280.000

€ 420.000

€ 560.000

€ 700.000

€ 840.000

€ 980.000

€ 1.120.000

€ 1.260.000

€ 1.400.000

17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 48 50 52 2 4 6 8 10 12 14 16 18 20 22 24

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

bruto best. Vedior bruto best. Adecco bruto best. Randstadbruto best. Content bruto best. Manpower bruto best. Startbruto best. Tempo Team evoked set Randstad 'voor uitzendkrachten' evoked set Adecco 'voor uitzendkrachten'evoked set Content 'voor uitzendkrachten' evoked set Manpower 'voor uitzendkrachten' evoked set Start 'voor uitzendkrachten'evoked set Tempo Team 'voor uitzendkrachten' evoked set Vedior 'voor uitzendkrachten'

December 200916 NIMA Expert Class Accountability

Page 17: Frans Cornelis

effects can be predicted fairly accurately

Source: Mindshare ATG

and KPN Corporate Marketing

department 2000

Tracked versus Modelled Awareness

actual campaign example

0

10

20

30

40

50

60

okt-9

8

nov-

98

dec-

98

jan-

99

mrt-

99

apr-9

9

mei

-99

jun-

99

jul-9

9

aug-

99

sep-

99

nov-

99

dec-

99

jan-

00

feb-

00

mrt-

00

apr-0

0

mei

-00

jul-0

0

aug-

00

sep-

00

Awar

enes

s

0

200

400

600

800

1000

GR

P

GRPs Base Level Frequency Model GRP Model TrackedDecember 200917 NIMA Expert Class Accountability

Page 18: Frans Cornelis

Awareness with Decision makers, Relationship of awareness and sales visits mid 2003

Correlation Coefficient = -0.91

Spontaneous awareness vs Visits

0,00

20,00

40,00

60,00

80,00

Barcelo

na

Malaga

Sevilla

Zarago

za

Region

Spon

tane

ous

Awar

enes

s

01020304050

Núm

ber o

f Vis

its ConocimientoEspontáneoRandstadMediaConocimiento 7GrandesVisitasnecesarias P aA (media 2003)

SpontaneousAwareness Randstad

AverageAwareness 7 largest

Visits needed from Prospect to

Active client

Conclusion: higher awareness = easier sales process

NB: disguised data

Big

city

1

City

2

City

3

Big

city

4

City

5

City

6

City

7

December 200918 NIMA Expert Class Accountability

effects of awareness

PS: measure in termsof sales costs effect, NOT revenues!

Page 19: Frans Cornelis

December 2009 NIMA Expert Class Accountability19

effect of Micro Marketing test actions - USA

filldatabase

makecalls

getappoint-

ment

getnew

order

makematch Bill !

with media before during campaign Medium city 1 2,6 1,2Medium city 2 1,9 1,4Major city 3 6,6 3,3

control groupMedium city 4 1,8 1,9Medium city 5 2,7 3,7Major city 6 4,4 4,619

Page 20: Frans Cornelis

December 2009 NIMA Expert Class Accountability20

examples from Randstad local actionsgross margins

185 440 €

139 740 €

159 470 €146 750 €

176 800 €150 170 € 157 690 €178 600 €

0 €

50 000 €

100 000 €

150 000 €

200 000 €

Avril Mai Juin Juillet Période

20042005

149 220 €

220 670 €

73 140 € 71 840 € 96 440 € 94 000 €

112 060 €126 080 €

0 €

50 000 €100 000 €

150 000 €200 000 €

250 000 €

Avril Mai Juin Juillet Période

20042005

Region 2 (€70K investment)Region 1 (€60K investment)

Region 3 (€60K investment)

242 850 €272 880 €

166 250 €181 260 €

236 890 €196 060 €224 690 €

243 770 €

0 €50 000 €

100 000 €150 000 €200 000 €250 000 €300 000 €

Avril Mai Juin Juillet Période

20042005

Conclusions:- sales, margins, productivity in action areas significantly higher increase than Opco or market average

-margin boost easily pays for campaign

Page 21: Frans Cornelis

conclusions

• it is not difficult…

• but it takes:• time!

• consistency

• perseverance

• breaking through the silos

• the benefits:• added up it can make a difference of

50% to 100% in effectiveness

December 2009 NIMA Expert Class Accountability21

Page 22: Frans Cornelis

shaping the world of work