How Much Are You Really Spending On Marketing Collateral?

Prompted by growing demands from CEO’s and CFO’s for greater accountability, marketers have become very focused on improving the productivity of marketing. For several years, marketers have been working to improve the effectiveness of marketing campaigns and programs by using data analytics and personalization to more precisely target marketing campaigns and to make marketing messages more relevant and persuasive.

More recently, marketers have begun to focus on improving the efficiency of marketing operations. Marketing operations refers to all of the activities and processes that are required to perform the marketing function, such as coordinating the work of external marketing services firms and managing the procurement, production, and distribution of marketing collateral materials. Marketers now recognize that improving the efficiency of marketing operations is one powerful way to stretch marketing dollars. The equation is simple: The dollars saved by improving the efficiency of marketing operations can be used to fund new or expanded campaigns and programs. So today, companies are putting operational activities and processes under close scrutiny, and they are looking for ways to make those activities more productive.

One area that offers huge opportunities for improvement in most companies is the procurement, production, storage, and distribution of marketing collateral documents and other marketing materials such as promotional items and point-of-sale displays. The potential for cost savings in this area is substantial because of the number of people and firms that request marketing materials and the number of unique marketing items that companies use.

So, how can you determine how much you’re really spending on marketing collateral documents and other marketing materials? To get an accurate picture of your real costs, you have to identify all of the collateral management activities your company performs and then assign costs to those activities.

Number of requests processed: Suppose that your company has 150 outside salespeople and that, on average, each salesperson submits one request for collateral documents per week. This means that you are processing and fulfilling about 7,800 requests per year (150 requests per week X 52 weeks per year = 7,800 requests per year).

Average request processing time: Assume that the average request requires 20 minutes to process and fulfill. This means that you are devoting about 2,600 hours per year to processing and fulfilling requests (20 minutes per request X 7,800 requests = 156,000 minutes per year) (156,000 minutes per year / 60 = 2,600 hours per year).

Hourly processing labor costs: Suppose that the average base wages of the employees involved in processing and fulfilling collateral requests is $45,000 per year. To get an accurate picture of total labor costs, you’ll need to consider other labor-related costs such as payroll taxes and employee benefits. If these costs amount to 20 percent of base wages, then the “all-inclusive” labor costs would be $54,000 per year ($45,000 X 1.2 = $54,000). Assuming that employees work 2,000 hours per year, the hourly labor cost would be $27 ($54,000 per year /
2,000 hours per year = $27 per hour).

Annual request processing cost: Using these example numbers, your total annual labor cost of processing and fulfilling requests for marketing collateral documents is $70,200 (2,600 hours per year X $27 per hour = $70,200).

As this example shows, collateral management costs can be substantial. And, keep in mind that this example only covers one component of these costs. A comprehensive analysis of your marketing collateral supply chain would also look at product obsolescence, procurement management, shipping costs, as well as other factors.

The good news is that there are effective ways to reduce your collateral management costs. A marketing collateral management system can automate the process of ordering, producing, and fulfilling requests for marketing materials and thus streamline your marketing collateral supply chain.

If you would like us to email you this whitepaper, please contact Kacey Kennickell at kacey@kennickell.com.