Leadership Spotlight

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Marketing by the Numbers, for the private and public Sectors
Wharton School publishing's marketing titles include the American Marketing Association's best book of 2006.

This year the top publishing honor from the American Marketing Association (AMA) went to a Wharton School Publishing title. Managing Customers as Investments by Sunil Gupta and Donald Lehman was awarded the 2006 Berry- AMA Book Prize for the best book in marketing. The prize recognizes books published conveying innovative ideas that have had significant impact on marketing and related fields.

This quarter's focus is on marketing titles in the Wharton model—innovative, implementable, and empirically based.

A Financial Approach to Customer Valuation

Managing Your Customers as Investments: The Strategic Value of Customers in the Long Run
By Sunil Gupta and Donald lehmann

It's more important than ever for companies to objectively assess the value of their customers. But conventional measures of "customer lifetime value" haven't been linked to overall business value and haven't been useful to senior managers. Managing Customers as Investments overcomes both shortcomings by bringing together both customer and financial views of marketing, demonstrating a rigorous yet simple approach to measuring the value of customers, and how to use the results to improve marketing decisions and ROI.

Through practical examples and case studies, Columbia Business School professors Gupta and Lehman offer managers in-depth insight into calculating customer lifetime value (CLV) and using CLV to improve a company's bottom line. Furthermore, it provides practical tools such as the "two sides of customer value" framework to identify priority customers and a step-by-step approach to what it takes to become a customer-centric organization." Key takeaways include how customer value calculations impact customer acquisition, service, retention, and segmentation, as well as strategic M&A and alliance decisions.

A Marketing roadmap to improved performance

Marketing in the Public Sector: A Roadmap to Improved Performance
By Philip Kotler and Nancy Lee

It is hard not to consider how government agencies have experienced failures in the past by not reading the market environment correctly. For example, the U.S. Post Office lost a great amount of business by failing to recognize Federal Express and UPS as growing competitors.

How can government agencies meet the increasing pressures to improve performance outcomes and demonstrate a positive return on investment of resources and taxpayer dollars? By implementing a strategic marketing plan.

Marketing in the Public Sector: A Roadmap to Improved Performance, the new book from world-renowned marketing expert Philip Kotler, S. C. Johnson Distinguished Professor of International Marketing at Kellogg School of Management, and social marketing consultant Nancy Lee, shows how a strategic marketing plan can help government agencies create citizen support for its programs, improve public health and safety, increase revenue, decrease operating costs, and ultimately improve customer satisfaction and increase citizen usage of the services they provide.

The book presents readers with a marketing toolbox featuring not only the famous 4Ps (product, price, place, promotion), but up-to-the-minute marketing techniques from the private sector tailored specifically for government agencies. It will help professionals in the public sector understand that successful marketing is more than communications, more than sales, and has at its core, a citizen-oriented mindset.

Using examples from around the world, Kotler and Lee illustrate how the same marketing principles and techniques that are used in the for-profit sector to sell more coffee, for example, can be used in the public sector to create citizen support and influence positive public behaviors. They offer no-nonsense roadmaps on how to create a strong brand identity, gather citizen input, and evaluate efforts.

For example, when it comes to influencing public behavior, Kotler and Lee suggest using social marketing practices. They describe 12 principles you should follow when embarking on a social marketing campaign, with #9 being "Have a Little Fun with Messages."

To this, Kotler and Lee write, "Using humor to influence public behaviors can be tricky, especially for the government.

There are times when it isn't appropriate for the target audience (e.g., victims of domestic violence)....You are encouraged, however, to look for opportunities where it might be appropriate for the audience, where it wouldn't be inconsistent with your brand, and where it may be just the right emotion to garner the attention, appeal, and memorability you want in your campaign."

The example: the city of Austin, TX, Watershed Protection Department's campaign to remind pet owners to clean up after their pets in city parks. The department makes Mutt Mitts available in Scoop the Poop boxes in each park. The public response: the city estimates that they removed 135,000 pounds of pet waste and related bacteria from watersheds in a single year. (www.ci.austin.tx.us/watershed/wq_scoop.htm)

The final chapter pulls it all together by presenting a step-by-step model for a high-impact marketing plan, helping the agencies and non-profits become the "high-tech, high-touch" organizations that we need them to be, while delivering more value for every penny spent.