The Hindu Business Line : Integrity window

Rumi, you may know, as a 13th century Persian poet, who sang, “Close the language-door and open the love-window. The moon won’t use the door, only the window.”

So with, truth, we may say, to a world that has gotten used to you-know-what. Which is why Lynn Upshaw’s new book from Amacom ( www.landmarkonthenet.com), despite its apparently anachronistic title, Truth, may yet be the right prescription.

Benchmark against a new ROMI, urges Upshaw in a chapter on achieving return on market integrity. ROMI, or ‘return on market investment,’ became “a hot topic about a century after some marketing exec was first asked to justify his budget,” narrates the author.

“Delivering ROMI is now a pervasive and difficult challenge because there is no widespread agreement on how it should best be measured, or even if it really can be measured at all with any consistency.”

For starters, the formula to calculate ROMI is: (Gross margin – market investment) upon ‘market investment’. “So if a company spends $1 million for a marketing programme that generates $5 million in gross revenue with a 30 per cent gross margin, then the company has achieved a ROMI of 50 per cent.”

Adding ‘integrity’ to the formula, the author suggests that we can calculate a different kind of ROMI, the ‘return on market integrity,’ as follows: (Integrity-related revenue minus marketing integrity investments) upon ‘marketing integrity investments’.

The integrity of a company or brand is really what the customer is buying in the long run, because it guarantees that the company will deliver on its product or service promises, reasons Upshaw. “Marketing integrity investments might include prorated research costs that relate directly to tracking how well the company/brand is respected, trusted, and relied upon by its customer base.”

Integrity can be a return worth measuring, the book argues. “Measuring the impact of integrity can help marketers learn some key reasons why customers may remain loyal, leading to increased profitability.” Commitment, as Upshaw defines, is the difference between buying and believing, between purchasing out of habit and investing in something that you count on.

“The 90 per cent of Infosys customers who return year after year are there for one major reason: They can count on Infosys to deliver what they promise because they believe in the company’s integrity,” reads an example.

“In these sceptical times, integrity can be a powerful draw for some disillusioned buyers who are looking for a new place to land. Getting a firm fix on the impact of integrity may facilitate that conversion.”

Another acronym in the chapter is COMA, for costs of marketing atrophy. “A coma is a sleep-like state of unconsciousness, which is an apt description of many marketing programmes that are eviscerated by budget cutbacks or neglect,” explains Upshaw. “The term ‘atrophy’ refers to a wasting away of some part of the body, usually because of lack of exercise and/or sustenance; it is also a pretty good summary of the impact of malnourished marketing programmes.”

For some companies, brand atrophy is only one cutback away, he cautions. “The undermining of a brand’s assets may begin when costs must be cut somewhere and, rather than trim more tangible assets like sales-force personnel or capital investments, management cuts all or part of the marketing spending because it is hard to quantitatively defend…”
The immediate COMA impact may include short-term declines in top-of-mind awareness (usually the first to erode), waning familiarity with brand details and news, and the beginnings of trial or reuse slippage, elaborates Upshaw, in an eerie paragraph. “Similar declines in harder business numbers then follow, including early volume and revenue downward movements.”
Ideal read for those who would fit the following description, as in one of Rumi’s mystical poems ( www.rumi.org.uk): “He is not a merchant and trafficker in the market of the world that I should beguile him with enchantment of gain and loss. He is not veiled that I should make myself out sick and utter sighs, to beguile him with lamentation…”

D. M.
http://BookPeek.blogspot.com

More Stories on : Books | Marketing | Books of Account

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Enforcing universal standards

Generation of surplus comes first, its usage later

Piecemeal solutions

Tibet uprising and its implications for national security

Kickback is the most prevalent form of fraud

Integrity window

Hike in salary

Moneylenders are happy

Infrastructure investments

Reverse mortgage