return on strategy

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Cashiers, Conversationalists and CMOs.

March 10, 2010 in Brand Planning, Digital Marketing, Marketing, Marketing Strategy by Steve Poppe | 0 Comments

There are two factions in online marketing these days: Cashiers and Conversationalists. 

Cashiers

Cashiers care about the sale. They have the small dashboard that tracks click-to-sale and spits out an ROI calculations. Cashiers can’t wait to wake up in the morning to see the new numbers. They are in to usability testing, shopping cart abandonment, media optimization and other measures but their interest and energy pretty much stops at the sale. The buck stops there.

Conversationalists

Conversationalists are a daintier.  They immerse themselves in the process.  They want to make friends.  (Like the kid with the runny nose in grade school, sometimes they just walk right up to you and ask “Do you want be my friend?”)  In my world, conversationalists are actually more likely to find truths and insights about their products and win in the long term.  All the pop marketing gurus today are into the conversation. They are not technologists, thank God, so they are easy to listen to and learn from but their failing is that they’re a little too caught up in the sausage making, not the sausage tasting.

CMOs

For a CMO it’s great to have both types of people on staff.  A Yin and Yang thing. Cashiers are imperative for sales now. Conversationalists care about future sales, and loyalty and sale predisposition. But it’s hard to take predisposition to the bank. Good CMOs have a brand plan in place that gives direction to the factions.  A brand plan is informed by the work and findings of both factions, but it drives them.  A brand plan helps Cashiers and Conversationalist organize “claim and proof” in a way that creates Return on Strategy near and long term. Peace!

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ROI and a Field of Weeds!

February 19, 2010 in Digital Marketing, Featured Articles, Marketing by Steve Poppe | 0 Comments

People sometimes jokingly ask me “What is the idea? referring to the name of my consultancy. My answer, borrowed from Sergio Zyman of the Zyman Group, is “sell more stuff, to more people, more times, at higher prices.”  That’s the ultimate goal of marketing, no? The quadruple crown.  Interestingly, unit sales, market penetration, per capita consumption, and higher margins are different measures. Linked, yes, but different. 

When writing a marketing plan, I typically start out with an exercise called The 24 Questions.  It’s traditional marketing stuff that follows the money. Who’s buying? When? Who is involved in the decision? Most profitable customers? Margins? Channels? Etc. Once I get the money part of the equation I delve into brand questions and from the points of view of management, employees and customers. Some of the questions are designed to get to the truth and bypass the drama and ass-covering. 

Prioritization.

The hard work starts when ranking the business objectives. Most of my decks (PPT presentations of findings) array a healthy number of business objectives. Prioritizing objectives leads to prioritized strategies which require someone at the company to put one objective at the top — the “On a sinking boat which child would you save?” kind of question. These decisions are the provenance of the brain not the algorithm.  

ROS

ROS (return on strategy) is a metric that measures business and marketing strategy. ROI, on the other hand, ties marketing tactics to dollar return.  Not to minimize tactics, but you can buy a tactic from any marcom agency on the street. And thanks to the web – the greatest marketing tool since paper money — we’re in the midst of something I call Tactics-palooza.  ROS allows you to measure business objectives through a strategic lens. ROS is the way to go. Think of it as a crop producing farm next to a healthy field of weeds. Peace!

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Unrequited ROI

July 27, 2009 in Marketing by Steve Poppe | 0 Comments

Readers know my pet peeve about ROI (Return On Investment) and my contention that the people who talk most about ROI are the ones who aren’t getting any.  ROI can be an addiction. It can turn a normal marketer into a living breathing marketing calculator. But measuring tactic after tactic then correcting and tweaking tends to bypass the most important measure of all — strategy. I favor ROS (Return On Strategy).    

 

Let me use an example. For a ski resort whose brand strategy is “The best groomed mountain in the Northeast,” it’s not that difficult to see how one might measure resort delivery on “best groomed.”  Grooming, on the customer experience side, can be measured based upon customer satisfaction, resort cleanliness, employee politeness. As for the on-mountain experience, measures might include trails opened, snow coverage, icing conditions, etc.  These strategic measures can then be calculated over time against ticket sales and other revenue sources. If the strategy is good, positive revenue should track against positive grooming metrics.   

 

ROI, on the other hand, tends to measure marketing investment, e.g., return on radio advertising budget, return on a give-away promotion, a pay per click campaign.

 

I’m all for measurement, trust me, but measurement without a brand strategy is unrequited. It reminds me of the question “How long is a piece of string?”

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Return on Strategy

June 16, 2009 in Marketing by Steve Poppe | 0 Comments

 

Ad agencies make money selling stuff. Want a TV commercial? That will cost you $350,000. Want a billboard? $25,000. How about a direct mail program? $125,000. Website? $75,000, if we don’t have to outsource it. If there is commissionable media…all the better.

 

As an ad guy coming up in the business a great day was one during which you presented brilliant creative and the client approved it with excitement, energy and money. If the creative really worked and sales followed you could just smell success.

 

But, today, as a brand planner the real excitement comes from presenting a brand strategy that lights up a CEO. When s/he reads the paper or the screen and breaks out in a smile and says “You get me” that’s the home run.  A brand strategy is not the creative, it’s the idea that leads the creative — it is the long term idea that makes the money.  I use a line in presentations all the time “Campaigns come and go, but a powerful branding idea is indelible.” Powerful branding ideas are how agencies should make money. Their ability to deliver on that idea should be the key to remuneration. Therein lies the ROS (return on strategy) conundrum.

 

Any thoughts on how to make this work? Drop me a note at steve@whatstheidea.com Peace!    

 

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Return on Strategy (ROS)

January 26, 2009 in Marketing by Steve Poppe | 0 Comments

Measurement in marketing is the “only” thing. Are sales increasing? Where? Who’s buying? Who’s not?  How are the ads communicating? What are the ads really saying to consumers about the product? Answers to these questions can help build effective programs. No doubt.

But then there is ROI. Return on investment. If you’re in a marketing or meeting and people are prattling on about ROI, you can bet they aren’t getting it. The whole ROI movement began in the 70s with the birth of direct marketing. Then promotion became the ROI pop marketing darling. Today it is pay-per-click and Internet marketing. But what often falls by the wayside while the Excel geeks are crunching the ROI numbers is the role of the strategy. More specifically, the brand strategy. This needs to be measured first and foremost. Return on strategy (ROS) is a marketing building block most overlook. And it is a long term recipe for failure.

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ROS

July 3, 2008 in Marketing by Steve Poppe | 0 Comments

  

Call the economy what you will, but it doesn’t take a brain surgeon to realize most businesses are retrenching. Businesses are cutting people, product, stores, distribution and promotion. One thing businesses will be dialing up, however, is assessment of strategy. The business of marketing has become so tactically focused that one is hard-pressed to look at a company’s consumer-facing efforts and identify a strategy. So, what business will improve during these doldrums? Consulting.  
 
Companies will want to identify their best customers. Their worst customers.  Their most likely new customers. They will want to know which competitor is the weakest and why. They will “follow the money,” and consultants typically can help with this. It’s great that the SEO program is improving click-throughs and that 8% of customers are finding the website more navigable, but in today’s market it’s about validating the business strategy, not the tactic.  I call this ROS — return on strategy. ROI is so last year.
 

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