I subscribe to The McKinsey Quarterly, an online newsletter that offers insight into this leading strategy consulting firm's thinking. A June 2005 article,"Boosting Returns on Marketing Investment," caught my eye. (It does require a premium membership to read the full text.)
Even though this article is directed mainly at consumer products, retailers, and automotive manufacturers, it offered some interesting insights that could help professional service firm CMOs. "It's time for marketers to be consistent in applying investment fundamentals -- such as clarifying the objective of investments, finding and exploiting points of economic leverage, managing risk, and tracking returns."
This is an interesting notion. Imagine yourself with your financial planner; You know the questions they typically ask! Wouldn't it make sense to ask your firm's senior executives the same questions: "What are your investment horizons? Your growth expectations? Your appetite for risk?" These, say the authors, are the basics for good return-on-investment calculations later on.
A second good point was that CMOs should distinguish between "maintenance" and "growth" objectives for different segments and marketing channels. Distinguishing between these two types of investments, although sometimes challenging, can help CMOs become more economically disciplined. CMOs should also distinguish between "proven" marketing vehicles and those that would be considered more "experimental." In this matrixed fashion, featuring a planned emphasis on the four areas mentioned, CMOs can better track the return on their investments.
Food for thought.
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