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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
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
“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
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%
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%
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
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
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
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
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
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
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
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
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
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
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
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
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!
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
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
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
shaping the world of work