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The real value ofOperational Marketing Excellence         Concepts from our forthcoming publication “Operational Marketing...
Half of your marketing operations budget is wastedWe can tell you which half                                              ...
It’s the half which keeps you busy with the wrong thingsThings which are executed inefficientlyThings which don’t serve an...
While strategy is the differentiator for  creating competitive advantage,operational efficiency is a prerequisite         ...
You need to develop           A Strategic view on Marketing Operations!         That’s why we’d like to share 3 things wit...
#1The way to position Operational Marketing Excellence                                         © www.mrmlogiq.com 2004-2011
Do you consider your marketing operations to be...                                             © www.mrmlogiq.com 2004-2011
An expense?              © www.mrmlogiq.com 2004-2011
A justified expense?                       © www.mrmlogiq.com 2004-2011
An investment?                 © www.mrmlogiq.com 2004-2011
If you believe marketing operations is an investment,position it like an investment and answer these four questions;      ...
For investors, managing risks is oftenmore important than managing returnsFor many marketers, managing risks is... well, t...
The first rule of business,      protect your investmentEtiquette of the Banker, 1775                                    ©...
Operational Marketing Excellence          comes to the rescue…                                   © www.mrmlogiq.com 2004-2...
Operational Marketing Excellence                comes to the rescue…It Creates EfficiencyLowering the investment          ...
Operational Marketing Excellence                   comes to the rescue…It Facilitates Effectiveness    Increasing the retu...
Operational Marketing Excellence                comes to the rescue…It Embeds Compliancy    Lowering the risk             ...
#2The way to create Operational Marketing Excellence                                        © www.mrmlogiq.com 2004-2011
Where to start                 © www.mrmlogiq.com 2004-2011
To become more efficient and effectiveyou need to see where your processesare weak or broken and need to be fixed         ...
With the Capability Maturity Modelyou can assess processesand map them to...                   5 Maturity Levels          ...
Maturity level 1     Ad hoc, undocumented and reactive;not capturing results and not fitted to learn.                     ...
Maturity level 2       Repeatable, described but not enforced;usage of documents is optional and offers limited           ...
Maturity level 3Well defined, standardized and mandatory;         results are consistent and coherent                     ...
Maturity level 4Adjustable, flexible whilst maintaining quality standards;                       initiated by internal man...
Maturity level 5Integrated, continuously improved and measurable;                      initiated by customer requests     ...
Becoming more mature means climbing up the maturity ladder             step by step            level by level      Lower t...
#3The way to calculate Operational Marketing Excellence                                          © www.mrmlogiq.com 2004-2...
This is the point where your CFO begins to understandhow you create value through Operational Marketing Excellence        ...
There are 3 ways to calculate results:    ROI                     Break even                   NPVReturn on Investment    ...
Let’s go back to the drawing board. The basic NPV formula looks like this...                    return - investmentresult ...
The cost of capital bit of the equation requires some explanation...The best things in life are free, but money is not one...
Let’s go back and add some operational marketing keywords to theelements in the formula...                customer        ...
And let’s add some operational excellence objectives to this formula too...                  customer                     ...
What are the dynamics if your processes “become more mature”?                customer                      organization   ...
Let’s add our 2011 Survey benchmark figures to the equation...                   return - investmentresult =              ...
Using the discounted cashflow method, and based on the 20% riskpremium and our survey benchmark...                        ...
Marketing is the least efficientprocess in business today, whileat the same time being one ofthe most importantRobert Shaw...
Operational Marketing Excellence#1. Creates Efficiency. Facilitates Effectiveness. Embeds Compliancy#2. Can be assessed us...
ContactRomekJansen@mrmlogiq.comwww.mrmlogiq.comEditor@MarketingGovernance.comwww.MarketingGovernance.com                  ...
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Operational Marketing Excellence - MRMLOGIQ 2011

Rationalization of marketing processes and the implementation of specialized marketing technology can lead to huge gains.
Unfortunately, the figures to support this statement are often too isolated or specific to a single case. They can seldom be applied to your situation, leaving you with poor evidence in front of the corporate judges when asking for your project approval.

The aim of this publication is to give you concepts and tool to create the final argument to enter the board room, and secure the budget for your operational marketing improvement project and deliver significant and sustainable value to department, company and shareholders.

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Operational Marketing Excellence - MRMLOGIQ 2011

  1. 1. The real value ofOperational Marketing Excellence Concepts from our forthcoming publication “Operational Marketing Excellence” Jansen & Riemersma, © www.mrmlogiq.com 2004-2011
  2. 2. Half of your marketing operations budget is wastedWe can tell you which half © www.mrmlogiq.com 2004-2011
  3. 3. It’s the half which keeps you busy with the wrong thingsThings which are executed inefficientlyThings which don’t serve any strategic purpose Basically, things which prevent you from investing resources in happy customers, better results and creating value © www.mrmlogiq.com 2004-2011
  4. 4. While strategy is the differentiator for creating competitive advantage,operational efficiency is a prerequisite Michael Porter Many marketers focus on marketing strategy - branding, positioning, segmentation, tone of voice - neglecting operational marketing efficiency © www.mrmlogiq.com 2004-2011
  5. 5. You need to develop A Strategic view on Marketing Operations! That’s why we’d like to share 3 things with you#1. The way to position Operational Marketing Excellence#2. The way to create Operational Marketing Excellence#3. The way to calculate Operational Marketing Excellence © www.mrmlogiq.com 2004-2011
  6. 6. #1The way to position Operational Marketing Excellence © www.mrmlogiq.com 2004-2011
  7. 7. Do you consider your marketing operations to be... © www.mrmlogiq.com 2004-2011
  8. 8. An expense? © www.mrmlogiq.com 2004-2011
  9. 9. A justified expense? © www.mrmlogiq.com 2004-2011
  10. 10. An investment? © www.mrmlogiq.com 2004-2011
  11. 11. If you believe marketing operations is an investment,position it like an investment and answer these four questions; What are the returns? When are they expected? What is the investment? What are the risks? © www.mrmlogiq.com 2004-2011
  12. 12. For investors, managing risks is oftenmore important than managing returnsFor many marketers, managing risks is... well, they never really thought about itIt is one of the reasons why marketersalways get slaughtered in the cost cutting massacre © www.mrmlogiq.com 2004-2011
  13. 13. The first rule of business, protect your investmentEtiquette of the Banker, 1775 © www.mrmlogiq.com 2004-2011
  14. 14. Operational Marketing Excellence comes to the rescue… © www.mrmlogiq.com 2004-2011
  15. 15. Operational Marketing Excellence comes to the rescue…It Creates EfficiencyLowering the investment © www.mrmlogiq.com 2004-2011
  16. 16. Operational Marketing Excellence comes to the rescue…It Facilitates Effectiveness Increasing the return © www.mrmlogiq.com 2004-2011
  17. 17. Operational Marketing Excellence comes to the rescue…It Embeds Compliancy Lowering the risk © www.mrmlogiq.com 2004-2011
  18. 18. #2The way to create Operational Marketing Excellence © www.mrmlogiq.com 2004-2011
  19. 19. Where to start © www.mrmlogiq.com 2004-2011
  20. 20. To become more efficient and effectiveyou need to see where your processesare weak or broken and need to be fixed © www.mrmlogiq.com 2004-2011
  21. 21. With the Capability Maturity Modelyou can assess processesand map them to... 5 Maturity Levels © www.mrmlogiq.com 2004-2011
  22. 22. Maturity level 1 Ad hoc, undocumented and reactive;not capturing results and not fitted to learn. © www.mrmlogiq.com 2004-2011
  23. 23. Maturity level 2 Repeatable, described but not enforced;usage of documents is optional and offers limited guidance and benefit © www.mrmlogiq.com 2004-2011
  24. 24. Maturity level 3Well defined, standardized and mandatory; results are consistent and coherent © www.mrmlogiq.com 2004-2011
  25. 25. Maturity level 4Adjustable, flexible whilst maintaining quality standards; initiated by internal management © www.mrmlogiq.com 2004-2011
  26. 26. Maturity level 5Integrated, continuously improved and measurable; initiated by customer requests © www.mrmlogiq.com 2004-2011
  27. 27. Becoming more mature means climbing up the maturity ladder step by step level by level Lower the risk Lower the investment Increase returnsCreate sustainable value © www.mrmlogiq.com 2004-2011
  28. 28. #3The way to calculate Operational Marketing Excellence © www.mrmlogiq.com 2004-2011
  29. 29. This is the point where your CFO begins to understandhow you create value through Operational Marketing Excellence © www.mrmlogiq.com 2004-2011
  30. 30. There are 3 ways to calculate results: ROI Break even NPVReturn on Investment Payback Time Net Present ValueReturns Returns x ReturnsInvestments Investments InvestmentsRisks/Cost of Capital x Risks/Cost of Capital Risks/Cost of Capital © www.mrmlogiq.com 2004-2011
  31. 31. Let’s go back to the drawing board. The basic NPV formula looks like this... return - investmentresult = 1 + cost of capital (interest rate + risk premiun) © www.mrmlogiq.com 2004-2011
  32. 32. The cost of capital bit of the equation requires some explanation...The best things in life are free, but money is not one of them. Investors want to have their money back, plus a bonus. The bonus is the “cost of capital”. The cost of capital contains a risk free “interest rate” - let’s say 6%, close to what the banks ask -, plus... - a “risk premium”, reflecting the risk element of the investmentThe higher the risk, the higher the premium requestedMarketing investments are risky investmentsCompanies that calculate a risk premium for marketing have it set at least at... 20% © www.mrmlogiq.com 2004-2011
  33. 33. Let’s go back and add some operational marketing keywords to theelements in the formula... customer organization resources return - investmentresult = 1 + cost of capital (interest rate + risk premiun) checks © www.mrmlogiq.com 2004-2011
  34. 34. And let’s add some operational excellence objectives to this formula too... customer organization resources return - investmentresult = 1 + cost of capital (interest rate + risk premiun) checks Increase legal compliancy © www.mrmlogiq.com 2004-2011
  35. 35. What are the dynamics if your processes “become more mature”? customer organization resources return - investmentresult = 1 + cost of capital (interest rate + risk premiun) checks Increase legal compliancy © www.mrmlogiq.com 2004-2011
  36. 36. Let’s add our 2011 Survey benchmark figures to the equation... return - investmentresult = 1 + cost of capital (interest rate + risk premiun) © www.mrmlogiq.com 2004-2011
  37. 37. Using the discounted cashflow method, and based on the 20% riskpremium and our survey benchmark... © www.mrmlogiq.com 2004-2011
  38. 38. Marketing is the least efficientprocess in business today, whileat the same time being one ofthe most importantRobert Shaw & Philip Kotler The business case for Operational Marketing Excellence can be enormous If you use the right arguments, metrics & calculation © www.mrmlogiq.com 2004-2011
  39. 39. Operational Marketing Excellence#1. Creates Efficiency. Facilitates Effectiveness. Embeds Compliancy#2. Can be assessed using the Capability Maturity Model#3. Can be calculated using the NPV calculation, showing sustainable value © www.mrmlogiq.com 2004-2011
  40. 40. ContactRomekJansen@mrmlogiq.comwww.mrmlogiq.comEditor@MarketingGovernance.comwww.MarketingGovernance.com © www.mrmlogiq.com 2004-2011

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