Marketing Operations ROI: It`s Simpler and Way Harder Than You Think

Marketing Operations ROI:
Facilitate Customer-Focused Transformations
GARY KATZ
VP MARKETING OPERATIONS

ClearAction Continuum
2© Copyright ClearAction Continuum. All rights reserved.
About Your Guide: Gary M. Katz
• Founder and Chief Strategy Officer of Marketing Operations Partners
• First ready-to-go COO and change management team for Marketing
• Chairman of Marketing Operations Future Forum
• 20+ years experience leading corporate marketing,
• Marcom, PR, IR, demand gen & change management
• Certified Strategic Planning Process Facilitator (ICA)
• Noted educator, author, speaker and leader in Marketing Operations field
• MS in Organization Development, BA in Public Relations

» 2) Why is Measuring Marketing ROI so Freaking Difficult?
» 4) Marketing Operations Maturity
• What it takes to get to Meaningful ROI
» 1) Exercise: Measuring ROI – What’s Behind the Numbers
• Marketing Operations Mini Self-Assessment
» 3) What is Marketing Operations 2.0?
• 1.0 vs. 2.0: What’s the difference?
• Six top marketing challenges and how MO tackles them
From a Marketing ROI Fantasy to a Marketing Operations Mindset

• Number reporting the use of ROI and profitability metrics has
remained steady since 2008
• Organizational pressure from senior management is quite high
• Firms using ROI are more likely to report expecting greater
growth than competitors
• Firms reporting that they calculate ROI are 3 times more likely
to report marketing as “highly effective and efficient”
Key Findings – 2009 Marketing ROI and Measurements Study:
Source: 2009 Lenskold Group / MarketSphere Marketing ROI and
Measurements Study Available at www.lenskold.com.
Marketing ROI Tied to Effectiveness

But There`s a Lot More to ROI than a Number

Why is Measuring ROI So Difficult?
Metrics, Metrics, Too Many Metrics . . .

• Revenue
• Profit
• Gross margin
• Market share
• Number of customers
• Stakeholder satisfaction
• Brand equity
• Distribution availability
EXTERNAL MEASURES
• Customer lifetime value
• Share of wallet
• Up-selling ÷ customers
• Cross-selling ÷ customers
• References ÷ customers
• Reference-driven new customers
• New customers ÷ average # of customers
• Lost customers ÷ avg # of customers
• Win-back customers ÷ avg # of customers
• % Dissatisfied, neutral, satisfied
• % customers who would rebuy
• % customers who would recommend brand
• % target market aware of brand
• % customers preferring brand
• Perceived quality vs. brand competitor
• % customers who know USP
CUSTOMER MANAGEMENT
• Awareness of goals
• Commitment to goals
• Resource adequacy
• Skill levels
• Freedom to fail
• Employee satisfaction
INTERNAL MEASURES
Source: Used with permission: Metrics You Can Manage for Success,
© 2008 ClearAction. All rights reserved.
Organizational Metrics

• Revenue ÷ sales calls
• Costs ÷ sales calls
• Daily calls ÷ salesperson
• Sales call time ÷ contacts
• Entertainment cost ÷ sales calls
• Orders per 100 sales calls
• New customers per period
• Lost customers per period
• Sales force cost ÷ total sales
SALES FORCE EFFICIENCY
• Cost ÷ 1K buyers reached per vehicle
• % Audience who remember an ad
• Opinions on ad's content & effectiveness
• Before-ad & after-ad brand attitudes
• Inquiries stimulated by an ad
• Costs ÷ inquiries
• CTR = click-through-rate
• Effective frequency or reach
ADVERTISING EFFICIENCY
• Logistics costs ÷ revenue
• % Orders filled correctly
• % On-time delivery
• % Error-free invoices issued
DISTRIBUTION EFFICIENCY
• Logistics costs ÷ revenue
• % Orders filled correctly
• % On-time delivery
• % Error-free invoices issued
SALES PROMOTION EFFICIENCY
Efficiency Metrics

[Valuew/Investment] - [Valuew/o Investment]
÷ Investment = ROI
• Benefits ÷ costs
• Includes non-cash benefits & costs
RETURN ON INVESTMENT
{ [% Brand's U.S. sales in a region] ÷
[% U.S. population in the region] }
x 100 = BDI
• BDI = Brand Development Index
{ [% Category's U.S. sales in a region] ÷
[% U.S. population in the region] }
x 100 = CDI
• CDI = Category Development Index
SALES POTENTIAL
[Penetrated market ÷ target market]
• Customers = penetrated market
• Potential market: product interest
• Available market: interest + capability
• Served market: available mkt niche
MARKET SHARE
• Frequency = [Exposures ÷ Reach]
• GRP = [Reach x Frequency]
• CPM = [Ad Cost] ÷ [Subscribers ÷ 1K]
• GRP = gross rating points
= exposures
= gross impressions
• CPM = cost per thousand exposures
ADVERTISING POTENTIAL
Performance Metrics

• Program-to-people ratio =
•% program spend/ total Marketing spend
• Marketing productivity ratio =
•marketing program $/marketing employee
• Marketing budget ratio =
•% marketing budget/overall revenue
• Marketing investment change ratio =
•% increase or decrease YoY
OPERATIONAL EFFICIENCY
Functional Metrics

Used with permission ©2008 Alex Eldemir
Performance
Management
Cause &
Effect
Accountability
ROI
What are You Measuring and Why ?

Information Overload
Measurable data in 2000
Metric
Data
Fine granularity needed for better decisions
Metric
Data
Measurable data now

Is Marketing Truly Aligned with Your Enterprise Strategy?
Enterprise
Strategic
Objectives
• Gap Closing
• Over some
period of time
• Objective #1
• Objective #2
Decisions &
Doing
• Investments
• Measures
• Programs
• Initiatives
• Activities
• Alignment
Gaps to Close
•Priorities
•Leverage
•Now vs. Later
Goals & Gaps
• Economic
• Experience
• Business
(ethics,
principles,
values)
Alignment of
Stakeholders
with each
other
Balanced
Returns to
Each
Stakeholder
Maximum
Overall
Satisfaction
Success!
START

 Trusted Data and Actionable Insight
 A Clearly-Defined and Well-Aligned Strategy
 A Means to Mobilize People
 Processes to Manage the Chaos
 Metrics That Matter
 Technology to Aid Tracking, Measurement, Reporting
 In other words, a “Marketing Operations Mindset”
Behind the ROI

15
15
See the rest of this presentation in
 GETTING & KEEPING CUSTOMERS
 DRIVING GROWTH & INNOVATION
 DATA & METRICS THAT WORK
 CREATIVITY WITHIN BOUNDARIES
 DRIVING ACCOUNTABILITY & COMMITMENT
 GETTING EVERYONE ON THE SAME PAGE
Join today:
https://ClearAction.com/value-exchange
Ask for a demo:
Success@ClearAction.com

ClearAction ContinuumClearAction Continuum
16
Increase: Maximize: Decrease:
• Follow-through
• Ability to prioritize
• Productivity of resources
• Employee engagement
• Strategic vs. tactical work
• Resource acquisition
• Stakeholder satisfaction
• Stakeholder cooperation
• Team collaboration
• Right the first time
• Job satisfaction
• Continuity
• Project stalls
• Duplicated resources
• Redundant efforts
• Rework
• Employee turnover
• Alliance workloadAlignment (bridging silos) is the
next frontier in CX ROI
Design of ClearAction Value Exchange based on research with American Express, Aon, Apple, Ariba,
Clorox, Covidien, Eli Lilly, Global Foundries, HP, Microsoft, NVIDIA, SAP and beta-testing with many others
ClearAction Value Exchange KPIs are multipliers on your CX investments
SaaS for real-time
personalized action plans
to tackle these silos
30-minute bites
AI-curated resources
DIY and interactive
VP-level to intern-level
Shared vision
Collective capability
© 2019 ClearAction Continuum.

ClearAction Continuum closes the brand-customer gap.
ClearAction Value Exchange members in marketing
& customer experience, care & success roles access
real-time, 24x7, bite-sized personal solutions to
navigate silos for customer value performance
ClearAction Advisory clients strategically
operationalize marketing & customer experience
for scalability, resource productivity & enduring
customer value performance
1717
Customer value performance momentum

Ask about the marketing management maturity roadmap
18
https://clearaction.com/marketing-maturity-mobilizes-mojo/
MetricsProcessGuidance
Infrastructure
Management
Technology
Strategy
Ecosystem
Alignment
© 2019 ClearAction Continuum. PROPRIETARY & CONFIDENTIAL.

Ask about customer value performance momentum
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DNA MASTER PLAN™
STRATEGIC RENEWAL™
CLEARACTION VALUE EXCHANGE™
DNA ACTIVATION™
MARKET RESPONSIVENESS INDEX™
DX AGILITY™
DNA TRANSFORMATION™
DX ALTITUDE™
RACE™
(RAPID ANALYTICS CUSTOMER ENVIRONMENT)
VOX MODERNIZED™
VOX ACTIONABILITY™
SHARKTΛINK™
CX growth aspirations:
 Business results via trust-building
 Consistency via silo-bridging
 All-employee engagement
 Prevention and anticipation
 CX as managerial context
 Profit impact in daily decisions
https://clearaction.com/customer-centered-business-10-keys-organic-growth/© 2019 ClearAction Continuum.

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We’re honored to influence these companies
PARTIAL LIST OF CLIENTS

21
ClearAction clients’ experiences
Because each of the ClearAction
team members managed CX in B2B
for a number of years, they provided
personal examples and practical
tools that could be implemented right
away. It was incredibly beneficial for
us to work with them for several
occasions. They elevated our
collective knowledge and helped us
achieve a higher level of CX maturity.
– A. Chu, Dir Customer Experience
ClearAction is an expert in business
operations and has been an
invaluable resource for us to learn
best-practices in many areas. They
taught us things that would not
readily cross our minds, but after they
explain, it makes total sense, and this
increased our efficiency and
accuracy in many areas. I highly
recommend ClearAction.
– K. Van Diepen, Dir Marketing Communications
ClearAction has been at the forefront
of helping companies like ours
reduce chaos, maximize resources
and achieve impactful results.
They’ve provided mission-critical
guidance to begin the process of
building a strong marketing
operations function that supports our
company’s growth, scale and
continuous improvement objectives.
– K. Chalmers, Dir Marketing Operations

Customer value performance momentum

Marketing Operations ROI: It`s Simpler and Way Harder Than You Think

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Marketing Operations ROI: It`s Simpler and Way Harder Than You Think