The most recent Marketing and Firm Value publications include i) an 85 page monograph, “Marketing and Firm Value”, Hanssens and Sirnivasan, which was published by Foundations and Trends on July 6, 2022. It was followed by ii) an 11 page summary written by the authors and lastly a iii) Marketing Sciences Institute webinar was held on January 31, 2023 conducted by them as well.

Hanssens is also co-author of the iconic text, iv) Marketing Response Models, second edition published 2001

As a frame of reference for Hanssens’ Marketing and Firm Value initiative, the following quote is from (i) above:

“In recent years, there has been a renewed emphasis in demonstrating that marketing investments can translate into profitable growth.”

Further confirmation of marketing’s importance to the firm is provided by a recent CMO survey.  Quoting:

“Demonstrating the impact of marketing actions on financial outcomes is #1 C-suite communication challenge (CMO survey 2019-2022). 11% of revenues are in marketing investments, yet only 41.6% are able to quantify its impact.”

The Operational Income Statement (OIS)’s marketing-driven analytics contribute a variety of new firm advantages for the Marketing and Firm Value initiative including:

1. As described, OIS solves a previously insoluble marketing problem: sizing, allocating and measuring the marketing budget for best possible profit.
2. The solution is a new income statement that includes a new, most profitable forecast something never before possible. All the resource required to make and fulfill the new forecast are in the new income statement

3.  OIS is always up to date assuring the firm is always on course for maximum profit

4. OIS has a high p and high q on the Bass diffusion model

• • high p because the business case for early adopters is simple and persuasive
  • high q for followers because there are a variety of organizations (i.e., potential OIS partners) who have developed workarounds for the limitations of the budget all of whom have members who have clients. As soon as a success with an early adopter is available, it will be shared with these new partners. They, in turn, will quickly share with their members who will, in turn, share it with their clients. Voila…

5. OIS maximizes the ROI of sales and marketing expenditures

6. OIS determines profitability by customer and demand area

7. OIS fits very nicely in the corporate organization.  It becomes a corporate analytic “wheel house” for the CFO and CEO.

8. OIS allows the firm to evaluate other marketing firm business models than profit

1. 1. 1. revenue
      2. share hold value: economic value analysis
      3. customer life time value
      4. customer equity:

9. OIS provides other income statement related benefits in addition to 1-8, above, that are unrelated to the budget.

10. OIS’s advantages and benefits are necessarily the best  possible

11. OIS will be a valuable financial planning enhancement for the CEO/CFO to share with the wall Street analysts that the follow their firm.

In conclusion, OIS is a unique and significant addition to the initiative’s analytics portfolio. It places marketing at the center of the firm’s financial planning activities as their response functions drive OIS.