That Dammed Denominator

23 Nov 09 - Mark Klein

The fashionable marketing metric today is Marketing Return on Investment (MROI), meaning simply how much revenue do you get for your marketing dollars.  This is expressed as a ratio: you divide your total revenue (the top number, or numerator) by the total of all of your marketing costs (the bottom number, or denominator). In principle this is clean and neat and tells you whether your marketing efforts are earning their keep. In practice it is a mess. It’s easy to find your total revenue. The problem is that damned denominator. What goes into total marketing costs? Is it what it costs to send out a campaign? Do you include advertising? The salaries and benefits of your marketing team? Is marketing’s share of the company overhead part of the total costs? There are too many possibilities, so MROI becomes a very squishy number.

Six things I've learned during this recession

13 Nov 09 - Arthur Einstein

Over the years I’ve discovered business is more fun when times are flush.  But I’ve also learned a lot in times when customers are pinching pennies.  What I’ve learned in past year may seem obvious at first - but if everyone was following these lessons, nobody would need us.

1. Take good care of the customers you have.  They don’t want to switch vendors if they don’t have to - it’s time consuming and disruptive.  We work hard at customer happiness and in this miserable business climate the loyalty of our customers seems better than ever.

2.  Segmenting customers and contacting them based on their needs is one excellent customer care tactic. (You can’t cut costs forever).  Dollar for dollar a differentiated customer contact strategy is a better way to improve revenue and profits.