1. Marketing Balance Sheet A Balanced Scorecard? Ted Mitchell

2. Traditional Balance Sheet at a Point of Time Assets (Short Term) Cash Inventory Accounts Receivable Major Equipment net of depreciation Total Assets Liabilities Accounts Payable Loans Owner ’ s Net Worth (or Retained Earnings) Total Liabilities

3. Marketing Balance Sheet Assets (Short Term) – Cash – Inventory – Accounts Receivable – Customer Satisfaction – Customer Retention – Market Share – Product Quality Levels – Brand Equity – Advertising Carry Forward (Awareness) Major Equipment – Trained Sales Force – Trained PR Dept. Liabilities – Accountants payable – Customer Dissatisfaction – Amount Sold on Deals – Product Return Rates – Switching Rates – Customer Churn Rates – Channel defections – Product Development Gap – Loans Owner ’ s Equity

4. Internal Marketing Metrics Calls per Salesperson Order Close Rate Cost per Thousand Expense per Call Sales per Employee Sales per Square ft. Inventory Turn Days Accounts Receivable Cost per Inquiry % Sales on Deals Return on Marketing % Coupon Redeemed Revenue per call Defect/Return Rate Late Deliveries Billing Errors Sales Force Turn

5. External Marketing Metrics Customer Satisfaction Relative Quality – Product – Service Buying Process – Awareness – Preferences – Intention to Purchase Market Share Relative Share Market Growth Rate New Product Sales % Sales per Customer New Customers % Customer Retention Average Account Life

6. Classic scorecards look backwards Wanted a more balanced scorecard Wanted a more forward looking scorecard

7. How much weight to put on the individual factors of the scorecard?

8. What has the firm done lately? 1) Current Profit 2) MROS What has the firm done in the past? 3) Cumulative profit What are the indicators of future success? 4) Market Share 5) Customer Satisfaction

9. What has the firm done lately? 1) Profit 30% 2) MROS 10% What has the firm done in the past? 3) Cumulative profit 40% What are the indicators of future success? 4) Market Share 10% 5) Customer Satisfaction 10%

10. Classic indicators of future success? Market Share (Sales, Heart, Wallet, etc) Customer Satisfaction Customer Retention Rates Awareness to Preference Rates Product Trial Rates (Coupon Redemption) Switching Rates What are the New indicators of future success? ?

11. Classic indicators of future success? Market Share (Sales, Heart, Wallet, etc) Customer Satisfaction Customer Retention Rates Awareness to Preference Rates Product Trial Rates (Coupon Redemption) Switching Rates (Share of Account volume) What are the New indicators of future success? Web site visitor rate (hits, password registrations) Patronage levels (Redemption rates)

12. Managers and Investors Do Use Balanced Scorecards and They Use Different Scorecards!!