Marketing Profitability Diagnostic Questions
Posted by Chris Quinn
In my earlier blog posting I highlighted the fact that marketing lacks credibility at the 'C' level in organization's due to their inability to link the profit impact of their activities to the organizations financial performance.
I think one issue that fosters this credibility gap is the lack of leadership from the senior level manager's within marketing. I have seen that behavior's and outcomes will begin to change when marketing leadership begins to ask different questions and expect different answer's.
The following are a five simple questions to assess the status of your organization's ability to connect marketing choices with financial results:
1. How do you model the profit potential of different marketing program options?
2. Which marketing metrics utilized by your organization have a 'known' relationship with financial profitability?
3. When was the last time you reviewed a marketing plan that clearly articulated the likely profit impact of the recommended investments?
4. When a recommendation is made by marketing to reduce the price on a given product or service offering, do you know the break even market share required to offset the profit reduction?
5. How do you estimate the price elasticities of your target markets when using the historical data available no longer reflects the current market realities?
Marketing leadership needs to 'step up' and address the perceptions that marketing lacks credibility within the majority of 'C' suites by providing robust market based evidence that connects marketing spending with organizational financial profits.
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