Tag Archive for: Marketing Mix Effectiveness

During 2023 global economic recession, economic growth is forecasted to decrease from 6% in 2021 to 2,7% in 2023, causing higher inflation and decreasing consumers buying power. Therefore decreasing investors’ appetite for the private market. The Venture Capital (VC) investors are avoiding risky start-ups and opt a more secure investment, making start-ups are struggling to raise funds and expected to survive at least for the next few years. PT ABC is an Indonesian fintech start-up company, providing payment system that offers free interbank transfer service for more than 7 million users and hundreds of companies and SMEs to date. As a start-up company funded by Venture Capital investors, PT ABC is impacted directly by the decreasing of investor appetite to fund. The survival strategy of PT ABC is to shift the business goal from “market growth” to “revenue growth”, with the implementation of cost cutting and increasing revenue. The functions that get the most of cost cut is Marketing, as employee layoff is not an option in PT ABC. Currently, PT ABC’s CMO does not an existing method to justify the marketing spending and how it ties with annual revenue goal, therefore does not have any insight of which marketing channels are productive and unproductive to revenue gain, which is the basis to determine where the cost should be cut from.

Marketing Mix Modelling (MMM) is a multilinear regression with time series analysis that uses spending of each marketing channel as independent variable and sales revenue as dependent variable, with the purpose to determine the Return on Investment (ROI) as a measure of profitability, added with the Economic Value Added of Marketing (EVAM) as a measure of the production of shareholder value. This research is supported with AARRR framework to understand in which stage of the customer journey flow that requires the most support from marketing and sales. The solutions from MMM analysis are in the form of marketing budget proposals to boost revenue, also the implementation of MMM dashboard. From the AARRR framework, obtained the insight that PT ABC’s users took a longer time to understand the product value, however, once the users are activated, they tend to be loyal user. Therefore, the stage between Acquisition to Activation requires the most attention and support from the marketing and sales team.