By Ed Pierce, President of ITA Communications. Fleet
I have referenced previously the Productivity Conundrum: While improved marketing effectiveness is our goal, quantifying progress is difficult given marketing’s role as an adjacency to goods and services, rather than to their production. Still, there are some possible steps we can take to develop better measures of marketing productivity. Let’s look at two of them:
The first approach is summarized by Jagdish Sheth and Rajendra Sisodia, who state that any measure of productivity improvement for a prospective marketing initiative must include the value of the effort (both customer acquisition and retention).
Customer Acquisition and Retention
The measure for acquiring customers consists of the revenue attributable to marketing actions that bring in new customers, divided by the costs of those actions, adjusted by a Customer Satisfaction Index (CSI).
The measure of customer retention calls for changing the ratio of revenue/cost for existing customers by a Customer Loyalty Index (CLI), which addresses customer “churn.” A marketing initiative’s overall productivity is a function of the weighted combination of both customer acquisition and customer retention.
A related approach for measuring marketing productivity of different marketing initiatives is to focus on improvement in the value of “market-based assets,” according to Rajendra K. Srivastava, Tasadduq A. Shervani, and Liam Fahey in their book, “Market-Based Assets and Shareholder Value: A Framework for Analysis.”
Redefining Market-Based Assets
The authors suggest that marketers should redefine a company’s market-based assets — customer relationships, channel relationships, partner relationships as well as relational and intellectual assets.
Using this approach, a marketer projects the effects that specific marketing budget expenditures will have on the collective value of these assets and the subsequent impact on customer acquisition and retention. They presume that enhancing market-based assets increases shareholder value by accelerating and improving cash flow.
Several interrelated research projects on brand equity, customer satisfaction, and strategic relationships also demonstrate significant value for companies and their shareholders.
Reaching Complementary Target Audiences
I have often been asked to extend effective marketing communications techniques to other business audiences – industry influentials, employees, strategic partners and others. After many years, one soon realizes that, although strategies vary by audience and other situational factors, the goal remains the same.
In every case, we strive to invoke a “call to action.” As it turns out, the same objective applies to education, too. Imparting information is only the first step in a process that hopefully leads to the betterment of a student who will become engaged.
Transformative Marketing
This “transformative learning” suggests that meaningful learning happens only when people use what is taught to challenge their own deep-seated assumptions on a topic – an especially difficult task when dealing with adults who have full-time jobs, families, and entrenched belief systems. Fleet and safety managers need only think about the work involved in changing driver behavior to appreciate the educational challenge!
But, those who study the cognitive and emotional obstacles to learning have identified some key transformative learning concepts that can help businesses build effective “transformative marketing” programs:
1. Effective learning (and communication) requires engagement on many levels. For example, in the realm of driver behavior, an appeal for a change has monetary, safety, employment, societal and other implications.
2. Challenging a wide range of assumptions is a multi-step process. An effective educator-communicator must identify outcomes at the start and then specify all the steps required to achieve them.
3. Every teacher-communicator must explore the assumptions for each new assignment and then develop a customized approach to establishing tasks and measuring success.
I invite you to contact me with topic suggestions or comments at 215-839-1306, or email me at [email protected]
