The Handbook of Marketing Research: Uses, Misuses, and Future Advances comprehensively explores the approaches for delivering market insights for fact-based decision making in a market-oriented firm. Divided into four parts, the Handbook addresses (1) the different nuances of delivering insights; (2) quantitative, qualitative, and online data gathering techniques; (3) basic and advanced data analysis methods; and (4) the substantial marketing issues that clients are interested in resolving through marketing research.
Chapter 28: Measuring Customer Equity and Calculating Marketing ROI
Measuring Customer Equity and Calculating Marketing ROI
The Managerial Problem
Marketing managers and top executives frequently want to know which marketing expenditures to increase, to forecast the profitability among possible marketing investments, and to track them later to determine their financial returns. For example, they want to know how to compare the return from an advertising campaign with that of a service quality improvement program or an interior store redesign with an upgrade to a Web site. These are not easy tasks. In evaluating marketing expenditures, the path to profitability is indirect, arising through improved customer perceptions and attitudes that result in changed buying behavior and higher revenues. Cost reductions are far easier to identify (“I just fired Joe and ...