More and more businesses are becoming frustrated with their yields on marketing spend. Learn from our Simon-Kucher Elevate experts how optimizing your marketing spend can result in huge growth potential – without needing to increase your budgets.
In the tough economic landscape, traditional marketing approaches are falling flat. Businesses are struggling to derive value out of their marketing strategies, and for several key reasons:
- Data loss due to privacy regulations – (e.g., the EU general data protection regulations that limit ad tracking)
- A huge falling return on marketing investment due to volatile market conditions
- Increased (ad) competition within core marketing channels
- Internal factors such as siloed data and lack of automation
Apart from launching marketing AI tools, a closer look at your budgets, your marketing channels and your lead generation can deliver a huge impact.
How you can counter the decline in marketing opportunities
Simon-Kucher Elevate’s marketing spend optimization models have provided huge commercial uplift potential for our clients. Without spending more, we helped our clients achieve…
- 25 percent uplift in gross revenues and 13 percent uplift in net contribution for a consumer loan company in the Nordics
- 11 percent uplift in gross revenues and 18 uplift in net contribution for an app-based business in the MENA region
- 10 percent revenue per annum due to better marketing spend allocation for a leading D2C consumer goods company
Why traditional marketing mix models fail – and how we can help
Traditional marketing mix models are unable to meet the demands of modern businesses. In a highly volatile and competitive landscape, our data approved marketing mix model can help you avoid the five biggest challenges:
Exclusive reliance on a limited set of data: Typical marketing mix models rely almost exclusively on the usage of transactional and marketing expenditure data.
By gathering a wide range of data, including competitor data and external economic indicators, our Simon-Kucher Elevate marketing models accurately pinpoint the impact of marketing spend on sales.
Inability to attribute conversion on brand and offline campaigns: Many marketing models are limited in their ability to track offline campaigns and use simplistic approaches such as last-click attribution models.
In contrast, at Simon-Kucher Elevate, we use offline spend data combined with advanced statistical mechanisms like spill over to ensure that the underlying attribution logic is as balanced as possible across all relevant customer touch points.
Inability to account for brand equity: Typical models ignore intangible (but extremely relevant) effects due to brand equity, customer perception, and loyalty.
Our Simon-Kucher Elevate experts instead use precise brand equity models to explain the base level of sales that are generated thanks to your brand.
Failure to account for memory and saturation effects of marketing: Brand advertising has an effect over a longer period and marketing spend leads to saturation in returns beyond certain points in time. Out of the box solutions, either ignore memory and saturation effects, or tackle them with a one-size-fits-all approach.
Our Simon-Kucher Elevate experts use their wealth of experience across a wide range of industries to derive values for memory and saturation effects that drive growth for your marketing channels. These memory effects ensure that your marketing spend models consider saturation of returns beyond certain levels of spend. So that you don't have to invest heavily for returns that may never come.
Reliance on marketing agencies to build models: Agencies have an intrinsic interest in driving up marketing budget spend in your marketing channels due to specific partnerships, accumulating costs for your business.
Our models at Simon-Kucher Elevate are developed with no such partnership background. Instead, our marketing budget allocation models are built so that you and your team take operational ownership once they are live.
Four cornerstones for marketing spend optimization
With these four proven tactics, our experts always know how to dive through the challenges of allocating your marketing budgets. We know how to move the levers that are limiting your marketing department and your long-term marketing strategy, unlocking the highest potential growth yield:
1. Automated data pipelines and harmonized data models: A successful model not only requires data collected within your organization (e.g., transactional and spend data) but also data collected by marketing agencies (e.g., target rating point data, sell-out data). In retail, external data such as GDP, inflation, and interest rates collected online and on government websites may have a huge impact. But all data tends to have different structures and granularities.
Our experts know how to handle varied sources of data. We have developed precise data extraction processes that streamline the acquisition of raw data from various singular sources and transfer them in a consistent format to a centralized data warehouse, where you and your team can access them in real-time.
2. Key KPIs to help measure success: Defining key KPIs ensures the ability to measure the impact of your marketing budget allocation efforts. At Simon-Kucher Elevate, we define key KPIs in your business that enhance customer journeys.
For digital businesses, we prioritize metrics such as…
- cost of acquisition
- cost of engagement
- customer lifetime value
- return on ad spend
- and your click-through rates
In offline businesses we also focus on…
- foot traffic
- sales revenue
- customer satisfaction
- brand awareness
- average transaction values
- and promotional effectiveness
The ultimate goal is to increase the results of your marketing efforts in the long run.
3. Machine learning & AI-driven techniques: We use advanced analytical techniques such as Bayesian modeling and machine learning to analyze the impact of marketing spend on sales and break down the contribution of each marketing channel. This enables us to better capture factors such as seasonality and macro-economic factors and better isolate the impact of marketing spend on sales.
4. Strategic budget allocation: Using automated data, KPI measurement, machine learning, and AI modeling techniques combined with intuitive and tailored dashboard interfaces, we incorporate our insights into marketing processes in real-time. When exercised correctly, we can provide the data needed to enable swift adjustments and improvements, maximizing the impact of every single dollar spent on marketing. No more waste of resources.
Simon-Kucher Elevate: Your experts for unprecedented growth opportunities
Our Simon Kucher Elevate team has deep digital expertise and experience with a wealth of knowledge in cutting-edge advanced analytics. We are experts in marketing mix models, helping you allocate your marketing budget across different channels with the goal of achieving long-term, sustainable growth.
Contact us today to learn more and uplift your business to 10-25 percent revenue growth without increasing your marketing spend.
