Value-Based Marketing? A Question of Attitude. Dr Christian Böing, the CEO of Strato AG, delivered a guest lecture on value-based marketing
Everyone knows the Internet, and everyone uses it. In Strato's promotional video a big blue-gray sphere demonstrates the host company's advantages to consumers.
On 23 January 2015 Dr Christian Böing visited the Institute for Value-Based Marketing. Using Strato's current television spot as a starting point, he demonstrated to master's students the practical relevance of value-based marketing.
Böing cited thought-provoking examples which clearly demonstrate that in the world of business the principles of value-based marketing are not always applied as they ought to be. Even experienced marketing managers will often rely on gut instinct rather than facts. Instead of carrying out fine-grained analyses, managers will frequently engage in rambling and unfocused discussions when they are trying to decide whether a measure has paid off. The triumph of instinct over rationality sometimes results in marketing budgets being frittered away by incompetent people who will say: ‘We have some money left over. Let's spend it on a few television spots.’
Böing takes the line that marketing ought to be based on facts. Never before have there been so many ways to measure the effectiveness and the efficiency of marketing (e.g. price mechanism indicators, conversion rates, the number of new contracts, or analyses of data relating to the number of people who visit a website). In Böing's view, it is wrong to takes measures whose effectiveness cannot be measured. If a marketing mesure has no immediate measurable impact, it is safe to assume that the measure in question will never have any effect. Unlike some comparable operations, Strato's latest television advertising campaign had a significant impact which the company's marketing experts were immediately able to verify by precise measurements.
Böing said he believed that all the staff members who are responsible for marketing ought to be given access to the relevant data. He went on to make a number of recommendations with a view to enhancing the effectiveness of marketing measures:
- Firstly, top managers should establish a corporate culture where value-based marketing is given pride of place. Otherwise no one will feel responsible for the process by which a company attempts to gain the maximum impact from its marketing strategies and initiatives.
- Secondly, marketing measures should not be accompanied by changes in the marketing mix (e.g. price or product adjustments).
- Thirdly, customers should be asked why they decided to buy some particular product. Information obtained in this way may shed light on the effectiveness of certain channels of distribution.
- Fourthly, the entire brand funnel (especially brand awareness and brand image) ought to be measured before and after big marketing investments. Such measurements make it possible to quantify the impact of investments on sales.
Questions and Answers
Q: What qualities do you expect a marketer to possess?
If you would like to be successful, you ought to study statistics and IT, and you shouldn't fight shy of mathematics. In marketing – as in other domains – decisions are taken on the basis of facts and figures.
As a student at the University of Münster I learnt a lot of useful things, especially in the accounting courses.
If you want to be a marketing specialist, you should learn to see things from the viewpoint of an entrepreneur. Before taking a measure you should always ask yourself whether your company will benefit by the action you are contemplating.
Q: What are the challenges faced by marketing specialists in your branch, and what trends have you observed?
In our branch data protection and cyber security pose substantial challenges. When we store and use customer data in our customer relationship management system, we have to be able to guarantee the highest possible level of data security. In addition, we have to ward off numerous attacks by hackers.
Dr Christian Böing, a graduate of the University of Münster, is currently chief executive officer of Strato AG and chairman of Marketing Alumni Münster. After writing his doctoral thesis under the supervision of Professor Heribert Meffert, Böing worked for three years as project manager at BBDO Consulting. After that he occupied managerial posts in the marketing and sales departments of Vodafone D2 GmbH. Before taking over his current post as CEO at Strato AG, he expanded his field of expertise by working as head of international product management at I & I Internet AG and General Manager for Media Sales at Telegate AG.