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Gauging revenue growth

Gauging revenue growth
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First Published: Mon, Jun 25 2007. 12 15 AM IST
Updated: Mon, Jun 25 2007. 12 15 AM IST
Choosing a marketing strategy need no longer be based on subjective parameters. Taylor Nelson Sofres Plc. (TNS), a leading UK-based market research group, has launched a new survey tool called the revenue growth manager (RGM) to enable marketers determine which marketing investments contribute the most to revenue growth.
How it works
By combining client information with customer survey data on brand perceptions, brand loyalty and purchase behaviour, the tool addresses three key issues: which customers to invest in, what kind of marketing programmes to adopt, and how well those investments will pay off.
RGM’s simulator analyses the impact of a marketing initiative and calculates a return on investment (RoI) in terms of customer equity or long-term profitable growth.
“With RGM, clients can evaluate a range of marketing investment scenarios and build an understanding of the current and future profitability of existing and future customers,” says Kevin Waters, global innovation adviser, TNS.
RGM provides an RoI analysis of alternative marketing initiatives before potentially expensive decisions are taken, he adds.
The USP
RGM is a versatile tool that can be used with other products such as the segmentation tool (a methodology to determine the composition of the market segment and consumers within the market segment) and the brand image tool (an application to evaluate how consumers and competitors perceive a brand).
“Unlike other market research tools, such as marketing-mix modelling and customer relationship management, which rely exclusively on historical data, RGM works with existing survey data and does not require extensive historical data,” Waters says.
The tool helps companies calculate future profit potential, he adds.
The target
The product is targeted at all marketing or market research professionals, innovation managers, advertising executives, brand and product managers and senior management. It can also be used across sectors, including financial services, technology, fast moving consumer goods and retail.
Critics’ view
Experts say assessing returns on various marketing initiatives has always been one of the primary concerns for marketers across the world. Yet, there is no fixed, scientific basis for such an evaluation.
“If this tool enables more discipline in allocation of marketing expenditure, it will be of great value—particularly to consumer product companies,” says Preeti Reddy, vice-president, consumer insights division, Technopak Advisors Pvt. Ltd.
Marketers, however, say it’s too early to draw any conclusions about the product. “There are several branded and indigenous tools to measure return on marketing investments with varying degrees of success,” says Tejaswini Aparanji, deputy general manager, branding entertainment, P9 Integrated, a film marketing company.
“We will have to wait and see if this tool offers first rate solution,” she adds.
What marketers are concerned about is the extent to which the tool can be adapted to a specific market segment or industry.
“Ideally, it should be possible to adapt it to a specific market environment. Assessing marketing RoI for a telecom service is very different from doing the same for a toilet soap or shampoo,” says Technopak’s Reddy.
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First Published: Mon, Jun 25 2007. 12 15 AM IST
More Topics: Marketing and Media | Campaign |