“Only 56% of respondents feel that the marketing function is clearly defined within their company,” says Petra Hazenberg, partner responsible for Deloitte Luxembourg’s Customer and Market Strategy team.

The survey, completed by 45 companies, focuses on measuring the effectiveness of the marketing function throughout the value chain: from defining strategies to the planning and operational implementation of various activities as well as the calculation of return on investment.

The survey’s main findings:

• The marketing department has a key role in the support of corporate strategy in Luxembourg

80% of heads of marketing feel that their marketing strategy is aligned with their company’s corporate strategy and 72% point out that their superiors support this position. However, only half of them feel that employees in their company recognise the importance of marketing and understand the technological requirements that need to be met in order to implement their strategy. According to Petra Hazenberg, “The marketing department is generally considered to be a key function within companies in Luxembourg, though it is true we are still a long way from the ‘marketing-centric’ model developed and widely used in consumer companies, in which the company’s entire value chain relies on marketing input.”

• Areas for improvement: project governance and collaboration between departments

The survey detects governance failures both within the marketing department and the other departments with which they work. Within the marketing department, only half of all heads of marketing feel that roles and responsibilities are clearly defined when it comes to the planning of initiatives. Interactions between the marketing function and other departments are no better. Only 20% of Chief Marketing Officers (CMOs) consider that marketing coordinates efficiently with the IT, HR and finance departments. “However, this figure jumps to 61% when talking about the coordination with the sales department,” adds Julie Marizien, senior consultant in the Customer and Market Strategy team.

What obstacles must be faced in order to establish effective governance across all departments? According to the survey, it seems that the challenge lies in the lack of culture regarding the measuring and sharing of data within the company. Two thirds of CMOs who took part in the survey have yet to put in place key performance indicators to measure their activities and feel that data is not openly shared within their company.

• Processes for measuring marketing performance: Luxembourg can do better

Generally speaking, Luxembourg companies lack experience in terms of measuring the performance of their marketing activities, particularly regarding the return on marketing investment. The main performance measurement processes are not sufficiently integrated within Luxembourg companies. Only half of participants effectively evaluate key indicators such as customer acquisition and loyalty rates (in comparison with 70% in all of Europe). Furthermore, most heads of marketing recognise that they have not established processes to automatically evaluate the return on marketing investment, particularly regarding media investment: less than half of respondents feel that their companies correctly assess their conventional media activities (compared to 60% in all of Europe).

• Measurement of the return on investment must be automated and integrated at the heart of the company

“At a time when marketing budgets are under close scrutiny, it is crucial that marketing departments establish a culture of performance measurement so as to highlight successes, showcasing the need to invest in them,” says Julie Marizien. “Many companies in Europe are increasingly using campaign management tools to automate the production and analysis of the marketing activity results”.

Here again, the survey highlights a widespread failure among Luxembourg companies to communicate the results of marketing activities to management. 50% of respondents confirm that they have not put in place the required resources to analyse the effectiveness of their marketing activities and only 39% of the people surveyed communicate the results of their activities to their board of directors on a regular basis. This failure to monitor and report performance adversely affects the ability to take corrective action: only 42% of participants claimed to take past activities into account when planning future activities.

Only the financial sector stands out, with companies applying marketing strategies that are more reliant on measuring data depending on past activities: 66% of heads of marketing in the financial sector claim to adopt such approach, compared to only 37% of heads of marketing across all sectors.

“While it is considered an essential function in supporting corporate strategy, the marketing function in Luxembourg needs to continue to optimise its organisational and analytical capabilities to ensure that its importance is given due recognition within the company,” concludes Petra Hazenberg.

The full version of the marketing effectiveness survey among Luxembourg companies is available on Deloitte Luxembourg’s website at the following address: http://www.deloitte.com/lu/survey/marketing-effectiveness-survey