Marketing ROI : The Path to Campaign, Customer, and Corporate Profitability

By James D. Lenskold

Book Overview

ROI (Return on Investment) is today's key business tool for measuring how effectively money was spent--yet few marketing managers receive any ROI training at all. Marketing ROIchanges all that, showing marketing pros at every level how to use ROI and other financial metrics to support their strategic decision making.

This comprehensive book details how an accurate working knowledge of ROI is essential for using the latest marketing measurements, and provides insights for gaining the greatest competitive advantage from the skilled use and understanding of ROI concepts.

• Format: Hardcover
• Language: English
• ISBN: 0071413634
• ISBN13: 9780071413633
• Release Date: July 2003
• Publisher: McGraw-Hill Companies
• Length: 256 Pages
• Weight: 1.30 lbs.
• Dimensions: 1.1" x 6.3" x 9.3"

Customer Reviews

Marketing Meets Finance

I give this book four stars. The writing style is dull, but the content is intelligent and thorough. Lenskold provides models to evaluate the expected return on investment (ROI) and profitability of marketing campaigns under consideration. The author rightly points out that the net present value (NPV) of gross margin - not revenue - is the basis for these calculations. Campaigns with an ROI lower than the cost of capital will be rejected. Remaining options can be prioritized in favor those with the highest ROI. The models all include projected results of the campaigns. Projections can be based on historical results or tests. While reading the book, I was thinking that companies not already using an ROI approach to make marketing decisions probably lack historical data to correlate sales with specific marketing investments, making accurate projections difficult to say the least. But you've got to start somewhere. Another challenge that comes to mind is the long sales cycle of a big-ticket product. The customer may be influenced by a variety of exposures, such as advertising, direct mail, and tradeshow presence over a long period of time. The author does cover residual value (the impact one marketing investment has on the performance of future investments) and the effect of integrating campaigns versus implementing them independently. Nevertheless, I think understanding your sales process and making informed judgments is smarter than being a slave to imperfect data. What about brand awareness advertising, that has no measurable linkage to incremental profits? Lenskold writes, "The short-term financial value of awareness is $0."

Solid Read, Great for Marketers within Larger Corporate Settings

Marketing ROI aims to serve as a comprehensive reference for marketers to understand ROI principles and formulas and apply marketing ROI. In my opinion, this books is meant primarily for senior/seasoned marketers - marketing directors to VPs of Marketing - as well others in executive management, and primarily for larger Fortune 500 type companies. The strengths of this particular book are its areas of focus on the foundation of marketing ROI principles, outlines of key financial concepts, identifying where ROI measurements go wrong, analyzing investment and return patterns - acquisition and retention, assessing ROI thresholds, reinforcing the marketing manager's responsibility for campaign performance, and reviewing issues that are prevalent within larger corporate settings. This is worth the cost of investment, but additional information would be useful in any reprints - more detailed implementation tactics, ROI forecasting strategies for small and mid-market companies, and emphasizing in greater detail the decision making trees for applying ROI.

Clear and welcome tools for justifying marketing investment

Calculating the ROI for marketing expenditures has long been a challenge. In the absence of financial justification, marketing budgets are often cut by companies unwilling or unable to show a clear relationship between such expenses and the bottom line. Naturally, then, it is in the best interest of marketing and corporate leadership to determine marketing ROI. After all, the value of attracting and keeping long-term customers is significant. By identifying the steps to determine marketing ROI, marketers have the tools to implement stronger marketing campaigns. More effective campaigns lead to greater profitability. Greater profitability creates financial health that allows companies to invest further in creative and productive marketing initiatives. I found that MARKETING ROI offers immediately useful information that helps guide marketing planning, and ties such spending directly to the bottom line.

Marketing ROI : The path to Campaign , Customer , and Corpor

Excellent business book. Well organized and packed with a lot of thoughts and adviceses that I could apply on my current job right away. I am using it as an Executive Training Program Reference Book now.

Introducing Rigor to Marketing Spending

With Marketing ROI, Jim Lenskold has introduced a very useful level of financial rigor into what the typically imprecise process of targeting investments in marketing and then measuring their impact on company profits. Two key concepts introduced are how Marketing ROI is correctly calculated (many companies do it wrong), and more importantly, how the Marketing ROI informantion is used to manage marketing investments, looking at the incremental investment in marketing, and its incremental effect on sales and profitablity. Jim covers the subject from a big company perspective, focusing on multi-product, multi-customer segment environments, but the concepts in the book can also be applied to small companies concerned with spending marketing dollars most effectively.This is a key text to be used along with the latest in customer relationship management techniques and customer information technology to manage the profitability of a company's demand chain.