Return on Ideas Report
A joint working party of Chartered Institute of Management Accounts, the Chartered Institute of Marketing and the Direct Marketing Association has launched Return on Ideas: Better results from finance and marketing working together to improve the working relationship between finance and marketing departments by establishing a set of clear, effective practices that will help both to communicate in a ‘common language’.
Return on Ideas addresses the perennial issue of accurately assessing the financial value that marketing departments add to the bottom line of corporations. While the apparatus of direct marketing makes it the most accountable form of marketing because of its ability to provide a clear outline of return on investment, companies often lack a sufficient blend of marketing and accountancy acumen, either to establish the value of their marketing campaigns or to account to shareholders on the effectiveness of investment in marketing. This is particularly important at a time when the economy is stalling and companies need to make well informed decisions when cutting costs.
Return on Ideas was authored by Dr Robert Shaw, Honorary Professor of Marketing Metrics at Cass Business School. Dr Shaw surveyed more than 100 organisations to understand where marketers succeed and fail in working with their finance business partners to create and demonstrate marketing’s financial worth. Dr Shaw also researched current academic measurement theories that are commonly used by accounting firms, consultants and marketing service firms. The outcome of this candid research led to Dr Shaw’s development of the Infinity Model, a practical framework that can be used by any size of organisation in any market to create greater sustainable value.
The Infinity Model encompasses the following principles:
- The processes that deliver ideas, predictions and demonstrations of value must run smoothly and should be aligned with other corporate processes
- It is also a matter of ensuring that marketing kicks off the business planning cycle and that marketing and financial plans are aligned throughout the financial year
- A well-balanced team has the mix of people needed to imagine, predict and demonstrate value, with a creative tension between ideas and numbers
- Good ideas can come from not only marketing but finance, sales, customer service, production and suppliers
- Marketing people should be allowed the freedom to imagine and create value-adding ideas
- Rigour should be achieved through leadership and motivation, with marketing insisting on rigorous cost-benefit analysis of their own ideas
- Ideas should not be killed off or subjected to prolonged delays just because the data about them is not perfect
