The marketing veep from Philips Norelco gave clear, illustrative examples of how the 116-year-old company learned just a few years ago to measure its return on investment. Here is a company whose cash cow - electric shavers - saw money cut from its marketing budget at the end of the 90s because, said Arjen Linders, VP/marketing, "we were unable to explain how we did what we did." In fewer than four years, it had lost one third of its business, but by 2005, working with its ad agencies and with consultants Marketing eVolution, Philips Norelco was able to regain five of the lost 16 percentage points in market share and it's still climbing.
Now they were on the edges of their seats. What happened? A big part of the rebound was proactive: studying the media mix and measured purchase intent in weekly meetings and making necessary changes along the way. In 2006, Philips Norelco for the first time included women in its marketing outreach. "We had never spoken their language," said Linders. At the weekly meetings, the team now not only reviewed the mix and purchase intent but captured what was happening at the retail level.
"We saw what impact the commercial [targeting women] was having on purchase intent, and we could react," he said. "We could make decisions on the spot."
Linders said his department had learned that "if you combine agencies, finance and marketing, you can make a big marketing spend a topic of discussion that is fact-based and not emotional. For the first time in a decade, we are talking about whether we can generate enough funds to do a test by advertising in February instead of only seasonally."
"The last nut we have to crack," he said, "is whether we need a retailer as a partner."
Interesting story. Better still was what Linders had to say about the wildly successful Bodygroomer, the shaver that tackles every hair on a man's body except what's on his face. Marketing eVolution helped Philips Norelco and its agencies conclude that the way to go with this product was to target younger consumers via a low-budget, viral campaign.
"Normally, we would have to wait until the year was over," Linders said of the company's past practice of designing a plan, launching it and then waiting until peak season (holiday gift-giving) was over to see how it worked. "But with this tool [from Marketing eVolution], we got extra budget without financial risk and, our growth was faster." It also was the first time since 1960 that Philips Norelco had launched a product without using TV.
What appears to work best, according to Linders and other speakers, is taking the proactive approach instead of waiting to hear the results of marketing efforts. And it doesn't hurt to hire a consultant who understands how to develop processes that measure effectiveness.
Addressing the assembly with a certain humbleness, Linders admitted Philips Norelco had never been very good at marketing. "But we know what we don't know," he said. "It doesn't matter how big or small you are, if you are able to improve versus a year ago, and you have metrics in place to help you understand whether what you're doing is getting better or worse, and you are able to take action, then you do become better."