Consumer Goods and Services Markets are facing a deep transformation.
The rise of new technologies, such as IoT, Big Data, Mobile, Apps, Wearable tools, has introduced new communication channels and has made the “Customer Journey” much more complex through the increase of the touchpoints influencing customers’ behavior.
These disruptive elements make more difficult to analyze customer journey and to define the appropriate go-to-market model and optimized marketing mix, with all their implications on commercial budget allocation.
In the new “multi-channel” environment, several questions are frequently arising:
- Which are the drivers/rationales that guide the budget allocation for marketing initiatives? (per product?, per brand?, per stakeholders?)
- What budget to be allocated in the new digital channels?
- What is the potential Return On Investment (ROI)? The focus is on top-line or bottom-line? Short-term or medium term?
- How to calculate the ROI for the new channels? How to consider the changing competitive environment?
It is evident that the traditional method to allocate budget, based on historical data, is no more effective.
A potential approach should be based on three key pillars:
- The analysis of the Customer Journey, able to identify the weight of each touchpoint and our current market share on each of them.
A structured “decision tree” of the customer interacting with the different touchpoints and stakeholders can be an effective support tool to perform the analysis.
- The Response Curve of each type of commercial investment (i.e. digital campaigns, TV advertising, discounts at the point of sales, sales agent, …), measuring the ROI of the different initiative that can support the identification of the “optimal investment” range.
- The Simulation tools and KPIs in order to define the potential mix of high return marketing actions.
Through the design of simulation tools and the set-up of specific KPIs, each initiative could be evaluated on the basis of ROI, defining the right mix of actions.
How can Organizations deal with this approach?
Based on our experience, most of the necessary information and data are available within a Company (based on internal data, market research, surveys) and you just require putting together in a structured and smart way. Besides, also the integration of such data with WEB based analytics can add high value in Customer profiling and help to track behaviors within different channels/touchpoints.
Moreover, by implementing such models and keeping them alive by feeding with new updated data can help to fine tune.
What is enough clear now days is that the new multi-channel environment will have a significant impact on the marketing mix and that traditional approaches are no more sufficient.
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