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Marketing ROI: The Path to Campaign, Customer, and Corporate Profitability Hardcover – July 16, 2003

ISBN-13: 978-0071413633 ISBN-10: 0071413634 Edition: 1st

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Marketing ROI: The Path to Campaign, Customer, and Corporate Profitability + Data-Driven Marketing: The 15 Metrics Everyone in Marketing Should Know + Marketing Metrics: The Definitive Guide to Measuring Marketing Performance (2nd Edition)
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Product Details

  • Hardcover: 268 pages
  • Publisher: McGraw-Hill; 1 edition (July 16, 2003)
  • Language: English
  • ISBN-10: 0071413634
  • ISBN-13: 978-0071413633
  • Product Dimensions: 1.1 x 6.2 x 9.1 inches
  • Shipping Weight: 1.2 pounds (View shipping rates and policies)
  • Average Customer Review: 4.0 out of 5 stars  See all reviews (8 customer reviews)
  • Amazon Best Sellers Rank: #512,342 in Books (See Top 100 in Books)

Editorial Reviews

From the Back Cover

A 2004 Berry-American Marketing Association Book Prize Finalist!

"This book is an indispensable, step-by-step guide to calculating what works and what doesn’t in the notoriously difficult to measure areas of marketing and public relations. When a CEO wants to know what he or she got for their investment in marketing, the processes and formulas presented in Marketing ROI help get to the most credible answer possible. More importantly, marketers can now confidently eliminate waste from their budgets and improve productivity."

-Tom Nicholson, Former Director Public Relations and Communications, Sears, Roebuck and Co.

A powerful program for making every marketing dollar count by accurately measuring its impact on your company's bottom line

Return on investment (ROI) is today's key business tool for measuring how effectively a company uses its assets, yet few marketing managers receive any ROI training at all. Marketing ROI changes that, showing marketing practitioners at all levels how to employ ROI and other financial tools to quantify their organizations' strategic marketing decisions and maximize the incremental profits generated by each dollar invested in their marketing programs.

The first comprehensive, easy-to-follow guidebook on using ROI to improve the effectiveness of virtually any marketing program, this results-focused book provides step-by-step guidelines on how your organization can:

  • Align marketing measurements and goals with operational objectives
  • Track marketing performance and provide feedback for improvements
  • Include all decision makers in the success of its marketing program

For far too long, marketing efforts and expenditures have been seen as a world unto themselves, logically and logistically separate from labor, plant, and other more traditional costs. Marketing ROI presents a program for removing the veil of mystery from marketing efficiency by measuring the validity and success of marketing investments and dramatically improving the ROI for each dollar spent in your organization's marketing program.

"The goal of this book is to serve as a comprehensive guide for effectively using marketing ROI to improve profitability. There is tremendous opportunity to have an impact on profitability at the campaign, customer, and corporate levels. The information presented will provide insight to executives, marketers, financial managers, and research analysts."

--From the Introduction

Marketing ROI presents an idea whose time has come. The idea? That marketing is an integral component of any organization's profitability (or lack thereof), and it is reasonable--in fact, beneficial--for executives to expect a measurable return on marketing investment, just as they expect returns on capital, technology, and other essential expenditures.

Built around a straightforward formula that can be adapted and implemented by organizations to match their own operational and financial requirements, Marketing ROI follows a three-step process for introducing, understanding, and implementing marketing ROI:

  • Understand ROI Principles: Introduces key concepts for and the rationale behind marketing ROI
  • Build the ROI Formula: Explains techniques and examples for measuring marketing ROI and aligning measures with decisions
  • Applying Marketing ROI: Provides methodologies and strategic applications for implementing, standardizing, and managing marketing ROI

Today's increasingly intense competitive environment, coupled with constant demands to improve shareholder value, has ratcheted up the pressure on companies to increase spending efficiency whenever and wherever possible. But with traditional paths to profitability more crowded than ever, companies are finding it virtually impossible to gain meaningful ground while using the same concepts and calculations as their competitors. Businesses need an approach that compares virtually every marketing investment with its incremental return, improves the measurements of the financial value of an organization's marketing investments, and ensures that the underlying principles remain valid.

Marketing ROI presents a new and better way to strengthen your competitive position by solidifying the tracking of your marketing expenses. Let it show you a proven path to accurately measure the efficiency and effectiveness of each of your marketing expenses--from targeted price reductions to direct marketing campaigns to revamped distribution channels--and use that data to increase the bottom-line return for every marketing decision you make.

About the Author

James Lenskold is principal of Lenskold Marketing Group, a specialist in developing strategic marketing programs and implementation services. A world-renowned speaker and consultant on marketing ROI and multichannel marketing strategies, Lenskold is a former marketing executive with AT&T, where he developed strategies and implemented consumer marketing programs that helped AT&T evolve from a telecommunications monopoly into a respected innovator and competitive marketing organization.


More About the Author

Jim Lenskold, an international speaker and recognized marketing expert, has developed innovative and comprehensive Marketing ROI processes, strategic applications and tools developed over a 20-year career and 5 intensive years of research and development. His critical thought leadership integrates key principles from strategy, marketing, sales, and finance to offer companies in all industries a resource for increasing marketing and customer profitability.

In 1997, Jim launched the Lenskold Group, a provider of strategic consulting, market planning, marketing ROI, customer profitability management and marketing innovation services to corporate and emerging businesses. Jim's career began at AT&T where he helped evolve the telecommunications leader from a monopoly to a well-respected competitive marketer in the mid-1980s through early 1990s. Jim earned his Master of Business Administration from Rutgers University Graduate School of Management where he supplemented his marketing and strategy experience with studies in entrepreneurial consultation and business finance.

Customer Reviews

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Most Helpful Customer Reviews

47 of 51 people found the following review helpful By Scott H. Strickland on November 25, 2003
Format: Hardcover
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.
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6 of 6 people found the following review helpful By Ian Rhys Palmer on March 13, 2008
Format: Hardcover
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.
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3 of 3 people found the following review helpful By Andrew Everett on July 6, 2008
Format: Hardcover Verified Purchase
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."
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7 of 10 people found the following review helpful By Sandra M. Burrowes on October 17, 2006
Format: Hardcover
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.
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