Finance Director presentation on improving marketing effectiveness - Oct '08

1. Using our Finance Skillset to help Improve Marketing Performance Robert Shaw Founder and MD of Demand Chain Partners [email_address] Honorary Professor, Cass Business School

2. Agenda 1. Introduction 2. Money skillset 3. Process skillset 4. Information skillset 5. Conclusions

4. About me Clients Robert Shaw Cass Business School 25 yrs 7 yrs CIM DMA IPA ISBA

7. Agenda 1. Introduction 2. Money skillset 3. Process skillset 4. Information skillset 5. Conclusions Rewards and risks Budget setting and allocation Costing and procurement Commitment accounting Money skillset Process skillset Information skillset

8. Asking the right questions about money Are sales bonuses justified? Are jobs costed competitively? Are budgets justified? Are cost commitments reported? Are customer deals justified? Money skillset Process skillset Information skillset

9. Are bonuses justified? Bigger bonus Basic pay Bigger bonus Bonus Revenues minus sales and marketing costs Money skillset Process skillset Information skillset

10. Risks and Rewards – Alcoholic Beverages Money skillset Process skillset Information skillset

11. Budget Setting and Allocation - Telecoms STOP! Money skillset Process skillset Information skillset

12. Budget Setting and Allocation - Global Oil Co. Money skillset Process skillset Information skillset

13. Budget Allocation - Top 20 Accounting Firm Advertising Direct Mail Brochures Events Corporate hospitality Telemarketing Locations Sectors Lines Marketing Mix Strategic Prioritization Audit Consulting Advisory Recovery Forensic PPP/PFI Investment Tax Central Government Education Financial Services Leisure and Lifestyle Local Government and Health Property and Construction Social Housing Utilities and Infrastructure Manufacturing Technology London Birmingham Bristol Cambridge Dublin Edinburgh Hemel Leeds Manchester Money skillset Process skillset Information skillset

14. Costing / Procurement - Entertainment Money skillset Process skillset Information skillset

15. Marketing Commitment Accounting Money skillset Process skillset Information skillset

16. Agenda 1. Introduction 2. Money skillset 3. Process skillset 4. Information skillset 5. Conclusions Process efficiency Process risks - regulatory Process risks – accountability Process risks - contractual Money skillset Process skillset Information skillset

17. Marketing Process Issues Ideas Production Distribution Demand projects collateral stimuli costs costs costs Compliance? Audit trail? Efficiency? Value for Money? Fraud? Corporate or self-interest? Complexity Money skillset Process skillset Information skillset

18. Process Efficiency - Telecoms Money skillset Process skillset Information skillset

19. Process Risks - Regulatory Money skillset Process skillset Information skillset

20. Process Risks - Accountability Money skillset Process skillset Information skillset

21. Process Risks - Contractual Deliverables Time and materials Payment by results Transparency Briefs Signoff Rework Money skillset Process skillset Information skillset

22. Agenda 1. Introduction 2. Money skillset 3. Process skillset 4. Information skillset 5. Conclusions Transparency & audit trail Scorecards Econometrics Forecasting and S&OP Money skillset Process skillset Information skillset

23. Transparency and Audit Trail … from marketing expenditure to market share, revenues, profits, and ultimately, value Money skillset Process skillset Information skillset Total Discretionary Marketing Budget Total Discretionary Marketing Budget Advertising Advertising Public Relations Public Relations Channel Promotions Channel Promotions Channel Training Channel Training End-User Promotions End-User Promotions Master Brand Adv. & PR Master Brand Adv. & PR Point-Product Adv. & PR Point-Product Adv. & PR Stackable Stackable Modular Modular NICs NICs Broadband Mod. Broadband Mod. Home Networks Home Networks Internet Devices Internet Devices Allocation by Product Allocation by Category Brand Awareness Share of Channel Investment Share of End User Promotions Market Share

24. Scorecards – Beverages Firm 1. Imagine 2. Predict 3. Demonstrate Money skillset Process skillset Information skillset

25. Econometrics 0% 5% 10% 15% 20% 25% 49 77 105 133 161 189 Week Sales uplift 0 5 10 15 20 25 30 35 40 45 50 Thousands Sales uplift Spend Money skillset Process skillset Information skillset

26. Demand Forecasting Is growth slowing down? 22% 19% 8% ? Money skillset Process skillset Information skillset

27. Statistical analysis: temperature as variable Slowdown not as bad as extrapolation suggests 22% 19% 8% 21% 15% 12% wk 1 wk 27 wk 1 wk 27 wk 1 wk 27 wk 1 wk 27 Sales volume Actual Model Money skillset Process skillset Information skillset

29. THAT’S ALL FOLKS Questions? Robert Shaw Founder and MD of Demand Chain Partners [email_address] Honorary Professor, Cass Business School Example Presenter photo