Finding the right KPIs for a more profitable marketing Marc Van de perre Managing partner Interface Marketing
UBA Masterclass 14 October 2010
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Which of these indicators do you use as a KPI? Customer satisfaction Net profit before tax Profitability of customers Employee satisfaction Return on capital employed
The misunderstanding about KPIs Many companies are working with the wrong measures Only few organisations have explored what a KPI actually is Very few organisations really monitor their true KPIs
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Characteristics of a KPI Non-financial measure (not expressed in €) Frequently measured (e.g. daily, 24/7) Acted on by senior management Understanding of the measure and the corrective action required by all staff Ties responsibility to the individual or team Significant impact (e.g. affects most of the critical success factors) Positive impact (e.g. affects all other performance measures in a positive way) Source: D. Parmentier, 2007
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KRI
Tells you how you have done in a perspective looking backward evaluating
PI
KPI
Tells you what to do
Tells you what to do to increase performance dramatically
looking forward forecasting
So, what does this mean for marketing? How do we identify the drivers that have an (substantial) impact on the performance of our marketing (and sales) efforts? How do we find the causal relationships between performance drivers and result indicators? How do we organise for ongoing optimal performance?
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What do we want to achieve? (organisation’s objectives)
Optimise value exchange
What do customers want?
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Value of the customer
Intrinsic value
Brand value
Relation value
Go-to-market
Rational values
Emotional values
Value for the customer
Experience
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KRI
Value of the customer PIs Intrinsic value
PIs
PIs Brand value
Relation value
(K)PIs (K)PIs
(K)PIs
Customer value = f(behavior, margin, retention, disconto)
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But what about the value for the customer? Objective meaning of value
Subjective meaning of value
Product characteristics, financial and economical parameters
Personal experience, expectations, risk, perception and interpretation
Value
Values
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The process of creating a balance between value of the customer and value for the customer
Source: Ken uw Klant, klantwaardemanagement als motor voor uw marketing, M. Van de perre & Ton Kuijlen, 2009
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Case: business travel
Objective & Challenges Enter the SME market What are the needs of SMEs? How do we address them? What do we propose to them and when? Can we do this profitably?
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SME Market share and market potential
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Professional, customeroriented service Online booking
Flexibility
Supplier selection (motivational drivers)
Corporate image, reputation and corporate culture
Personal relation
Portfolio
Prijs
Price/Quality
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Motivational drivers
Source: Ken uw Klant, klantwaardemanagement als motor voor uw marketing, M. Van de perre & Ton Kuijlen, 2009
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Based on the motivational drivers 3 customer profiles could be defined
Solution seekers 20% Internet shoppers 29%
Price-sensitive business travelers 51%
How distinct are these profiles? Looking through the lens of the organisation: How can we make more money? How can we optimise our go-to-market? How can we retain our customers?
Looking through the lens of the customer: What does the customer perceive as added-value? What are the drivers to select a supplier? What are the needs and wants?
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Go-to-market model: acquire and re-activate
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Lead generation approach
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Lead nurturing and NBA
Status of the SME Market research We are able to predict a customer’s or prospect’s outside-in profile (predictive model) This allows us to speak in ‘the language of the customer’ We can forecast customer behavior
We are able to optimally segment the SME market based on inside-out parameters Customer value and potential value
The combination of both the outside-in profile and the inside-out segmentation enables us to build a market segmentation model that: Identifies the enterprises that (will) represent real value to us Spot opportunities Identify quick-wins Optimizes Go-to-Market
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Real figures Objective: 822.000 € from 52 companies Realised in 2009: 90 companies volume: 7.000.000 € total travel 30% solution seekers 50% internet buyers 20% price buyers still 400 hot prospects on average 9% more profit
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Q&A 52
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