The proliferation of brands and channels is forcing companies to restructure their marketing efforts significantly.
Mae West said, "Too much of a good thing is wonderful." Today's top marketing managers would disagree.
Their biggest concern is that an explosion in the customer, product, media, and distribution channel segments has made marketing more complex, more expensive, and less effective.
There is evidence of this proliferation throughout our environment. Consider the increasing fragmentation of customer segments. Modern society is more multicultural, due to immigration, and is more divided because these groups have become polarized into rich and poor. Both trends create additional and different customer segments.
Simultaneously, there is intense competition and a desire for growth, and supply chain innovations have enabled today's companies to target more demanding customers within smaller segments. Consequently, the product and service options available to customers in consumer goods industries bundled with financial services have doubled or tripled.
As sub-brands and extension lines multiply, so do the messages and the media required to sell them. Twenty years ago, major companies used an advertisement on three television networks to reach 80% of the US population; they currently need up to 20 messages and programs to achieve the same reach. Marketers benefit from some of the new media, but marketing programs are complex and difficult to measure.
Finally, distribution channels such as the Internet, product resellers, retailers, and television sales providers have become important to companies that sell to both consumers and businesses. Many Telecom providers, for example, require up to four channels to reach their diverse customer base. The increase in the number of channel options further fragments your sales efforts while increasing the possibility of conflict with the channel.
All of these factors taken together have greatly increased the complexity and cost of managing a marketing program, coinciding with the time when shareholders and CEOs have been pushing through their top marketing managers to improve the rate of return. to marketing expenses.
It is no coincidence that 50% of large US commercial firms, according to recent surveys, have said that a major restructuring of marketing models will be necessary to profitably solve this new scenario of segments, products, channels, and media..
The new model will force companies to change many of their paradigms of internal administrative operation.
The "marketers", pressured by this new reality, are needing and demanding a highly accurate cost estimate.
This is where ABC / ABM can be of decisive help.
The central objective of any ABC / ABM model is to increase profitability by creating value for customers. To do this, the analysis of value by customer or customer segment is key and should focus on the activities that they consume.
Consider two customers who buy the same number of products from us, but the first does it with a single purchase invoice while the second asks for 20 purchase invoices: Do they have the same cost of care?
ABC / ABM allows you to "track" each customer, family of customers, sales channels, etc. according to the demand for activities that you carry out. This provides an accurate calculation of the costs for each client.
With the increasing demand for commercial diversification, these calculations become essential to succeed in a correct marketing policy.
