»The most effective Way to Success is to create it«
LVH
BELIEVE while others are doubting.
PLAN while others are playing
STUDY while others are sleeping.
DECIDE while others are delaying.
PREPARE while others are daydreaming.
BEGIN while others are procrastinating.
WORK while others are wishing.
SAVE while others are wasting.
LISTEN while others are talking.
SMILE while others are frowning.
COMMEND  while others are criticizing.
PERSIST while others are quitting.
William Arthur Ward, American Writer 1921–1994)



Market Success

In marketing there are just four measurable elements of success:
 
- Profitability,
- Market Share,
- Customer Satisfaction and
- Customer Retention.
1. Profitability:

The very reason businesses exist is to make a profit, or generate more revenue than they pay out. Profitability may be increased by reducing overhead and the cost of goods sold - or by increasing the price to the buyer.
But prices can only be raised so much. Per the laws of price elasticity, as prices rise, unit sales tend to decline. And so does Market Share.

2. Market Share:

Is an important measure of success. It is important to marketers since the greater the share, the more stable the brand's performance is in the marketplace. A product with 63% market share is a force with which to be reckoned. A product with 3% share is vulnerable to a variety of market factors such as competitive pricing, promotions, loyalty to better-known brands and more.
Financial managers understand the impact of Profitability and Market Share. But concepts such as Customer Satisfaction and Customer Retention are softer items and tend to be treated as lesser by those managers. Yet, the long term success and growth of a brand is highly dependent on them.

3. Customer Satisfaction:
Doesn't appear on a balance sheet. It can't be measured in euros and cents or in pound sterlings and pennies. It's measured by the customer's feelings about a brand. Does the brand deliver its promise? Is it a good value? Does it bring status to the owner? Is the customer generally happy with the product? Customer Satisfaction begets repeat purchases, loyalty, word-of-mouth advertising and, of course, long-term profitability via Customer Retention.
4. Customer Retention:

Is the final measure of marketing success. It is closely tied to Customer Satisfaction, Profitability and Market Share.
A satisfied customer is likely to remain loyal to a brand, thus enhancing market share over the long-term, as new customers are acquired. Retained customers increase the profitability of a brand. In the course of acquiring new customers, retained customers' purchases can be counted on for continued profit performance.
It's widely known that it's five times more expensive to acquire a new customer than it is to keep an old one.
Few business organizations focus on all four elements of marketing success, probably because they're difficult to balance and manage as separate items, yet they're strongly interdependent.

The four elements of marketing success are reasons enough for financial managers and marketing managers to gain a better understanding of one another's' disciplines and work toward the common good of their companies.                                                        

Marc Levitt
 

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