What Marketing Controls should your company implement in 2018

Customer Satisfaction and Marketing Systems to Improve Profits of your Growing Enterprise

I believe beginning of year is a good time to Evaluate the Marketing performance of your Enterprise,
Startup, Small /Medium sized business in the past year and put Marketing Processes in place to make
sure that 2018 is going to be much better than 2017. As the old saying goes ‘If anything can go wrong, it
will.’’

It is a well known fact derived from research across companies over the years that most companies have
inadequate control procedures. Key aspects of the lack of marketing control processes are:

 Small companies do poorer job of setting clear objectives and establishing systems to evaluate
performance
 About 1/3 rd of companies have no regular review procedures for understanding problems from
their products
 Almost half of companies fail to compare and analyze their 4Ps including pricing, warehousing or
distribution cost
 Same number of companies fail to conduct a formal evaluation of advertising effectiveness or
review sales force performance

One of the key Marketing Controls that every company should put in place in the beginning of the year
is the Annual Plan Control. The purpose of this control is to examine achievements of the planned
results for sales, profits and other goals. The four steps in this Marketing Control process are as follows:

Corrective
Goal setting Performance Performance
action
What do you measurement diagnosis
What should
want to What is Why is it
we do about
achieve? happening? happening?
it?

The five Tools one can use to check on plan performance are:

i) Sales Analysis

As the name indicates, this measures and evaluates the actual sales against the goals. This is broken into
Sales Variance analysis and Micro-sales analysis. Sales Variance analysis is used to measure the relative
contribution of different factors, such as Price, Volume (No. of Software licenses sold etc.), to the gap in
sales performance. Micro-sales analysis looks at specific factors like Products, Territory and so forth in
order to understand the cause for decrease in sales.

ii) Market Share Analysis

While doing sales analysis, one of the missing factors is the company’s comparison to its competitors.
The different types of market share are Overall market share (Comparing with overall target market),
Served market (Considering the specific target market) share, Relative market (Taking into account the
top 3 competitors) share, and Relative market (Comparing to the leading competitor) share.

iii) Marketing Expense to Sales Analysis

This is an important ratio to calculate as part of the Marketing Control analysis. This includes five
different ratios - Sales force to sales, Advertising to sales, Sales promotion to sales, Marketing research
to sales and Sales administration to sales. The changes in these ratios need to be measured taking into
account the fluctuations. The fluctuations can be tracked using a Control Chart Model which allows
companies to measure the deviations between desired, upper and lower limits. When the Marketing
expense to sales ratio is out of control, disaagregative data can be used to track the problem. An
example of that is a graph which shows Quota Attainment (percentage) on x-axis and Expense
Attainment (percent) on the y-axis in order to do a comparison and revenue deviation by region. This
will show which region achieved its sales quota close to the expected expense levels and which region
exceeded the quota with expenses being proportionately higher. This type of graph will also show the
troubling regions which achieved less than 80% quota with disproportionately high expenses. These
deviant regions can then be mapped with the associated sales representative to further analyze the
reasons for the same.

iv) Financial Analysis

In order to see how and where the company is making money, the Marketing Expense to Sales ratio
needs to be analyzed in an overall Financial Framework. A company can use the below Financial Model
for calculating the Return on Net worth.

v) Customer Satisfaction Tracking

The above measures of Financial Analysis, Marketing Expense to Sales Analysis and others are
quantitative measures, which are important but not sufficient. Every company needs to have qualitative
measures as well. These measures can provide them early warnings of market share erosion. Proactive
companies need to set up systems to monitor satisfaction of not only their customers, but their dealers,
and other market systems participants. Putting this monitoring in place will provide early signs regarding
changes in customer satisfaction/preference in order to take appropriate actions to prevent the effects
of these changes on company’s sales and profits.

The main Customer Satisfaction Tracking Systems are as follows:

a) Complaint and Suggestions System

In today’s customer experience era, a market oriented company needs to record, analyze, and respond
to oral and written complaints from their customers on their products and services. Research suggests
that well advised companies encourage, facilitate and even compensate for customer complaints. This is
an important system for the Digital, fiercely competitive and commoditized era where every growing
company is trying to provide the best customer experience ever. This could be seen as a starting point
towards better customer retention because it will increase the consumer’s expected utility from the
product.

b) Customer Panel

In this system, companies create and run panels of customers which communicate their attitude on a
regular basis. This feedback can be collected through phone call or questionnaire. The information
collected is important as it is more representative of the range of customer attitudes towards the
company’s products and services. Creating this kind of panel also shows your customers that you are
listening to them and are interested in what they have to say.

c) Customer Survey

Customer surveys can be done in a formal manner by mean of a standardized yet locally sensitive
questionnaire. This will help the company determine the needs and attitudes of customers. Once this
data is compared with the financial data, expectation plus past attitude information, the company is
able to determine its strengths and weaknesses plus their probable causes. The next step is to
determine where and how effort should be applied to correct the weakness and preserve the strengths
as per the results of the survey. This needs to be a continuous process which starts with the managers
taking action and maintaining it in order to keep evolving in terms of the customer changes.

When the company performance deviates too much from the Marketing Plan and Goals, corrective
action needs to be taken. Normally, the company needs to start with minor corrective actions and if
they fail to work, more drastic measures need to be taken in order to reduce the deviation with the
Marketing Plan and increase the overall performance. The importance of the core Marketing Models,
Tools and Systems cannot be overemphasized in today's Digital world.
Have the most profitable year 2018.