All companies – regardless of their industry (B2C or B2B) – constantly wonder how best to influence and persuade their clients. The following case, drawn from our direct experience with a key global client in the consumer sector, clearly illustrates how powerful the answer to that question can be. Our client’s primary objective, given the growing pressure on margins, was to achieve tangible, short-term results in the effectiveness of their marketing spend.
To do this, we applied our proven methodology for maximizing marketing ROI, built around three steps:
- Identify the issues
- Identify the root causes
- Deliver rapid bottom-line improvements.
A common mistake companies make when dealing with marketing is focusing on only a narrow and incomplete part of the overall picture. In contrast, our approach considers the four key perspectives that truly drive marketing effectiveness:
- I. Internal perspective
- II. Client perspective
- III. Competitive perspective
- IV. Consumer perspective
For instance, our client believed that optimal marketing allocation depended entirely on the competitive context – for example that, in a given category, TV advertising always generated the best results.
However, our analysis – shown in the following chart, comparing the marketing allocations of three equally successful brands (including theirs) – proved that this assumption was completely wrong.
Similarly, the client was convinced they were managing their “direct-to-client” marketing spend effectively, believing that higher direct investments automatically produced better results. Once again, our analysis of key ROI metrics (Sales and EBT) demonstrated that this assumption was incorrect, as illustrated in the graphs below.
Following our methodology, we then investigated the root causes of the client’s ineffective marketing management. One key issue was their lack of understanding of end-consumer behavior – particularly, how consumers responded to different marketing levers and to what extent budgets actually influenced those responses. Our work revealed a complete misallocation of marketing levers, as clearly shown in the following chart.
By integrating all our analyses and applying our methodology, we were able to completely reshape the client’s marketing approach, enabling them to:
- triple their marketing effectiveness
- while simultaneously achieving an immediate 30% reduction in marketing expenditure.