It is always interesting to see where ideas come from. Therefore, I was interested to read Johnson and Kaplan’s history of management accounting; Relevance Lost. This noted how a few important accounting ideas in business developed. Du Pont Return On Investment Model F. Donaldson Brown developed one of the most impressive views of business that…
Category: Accounting and Marketing
Customer Equity Statements And Financial Reporting
Think of a brilliant move in soccer. The player shows great vision, and excellent passing. There is some fantastic build up play where lots of people are involved. The movement shows amazing promise and then someone slips and blasts the ball miles away from the goal. To my mind that is where we are in…
Management Accounting For Marketers
Marketers often want to make the case that accounting does not treat marketing well. I have good news for marketers, there is a major group of accountants who (should) agree with you. There are accountants who feel that financial accounting standards have subverted their discipline. Managerial accountants, whose job it is to deal with internal…
Internal Measurement Of Brand Value
As regular readers will know I do a lot of work with MASB (the marketing Accountability Standards Board). Some of my colleagues at MASB wrote a paper about brand valuation. I want to highlight and reinforce their message. A key part of this is that the internal measurement of brand value is crucial to bringing…
Marketing Implications Of Financial Accounting
A book chapter I wrote with Jonathan Knowles and Moeen Butt has recently come out in the Review of Marketing Research (vol 18). In our chapter, we sought to give marketers a better understanding of accounting, specifically financial accounting. What then are the marketing implications of financial accounting? Keeping Score Marketers are trying to work…
Customer Accounting, Thanks But
It is great that accountants are looking at the idea of valuing a firm through its customers. I very much welcome this. That said, I do worry that people bringing ideas from outside their field often bring back bad habits with them. (To be clear I am sure I do this when looking at non-marketing…
Angel And Demon Customers
Larry Selden and Geoffrey Colvin had a book back in 2003 that made quite a stir. It introduced the idea of angel and demon customers. This was a catchy way of explaining the notion that not all customers are profitable. Indeed, Selden and Colvin argue that customers should not all be treated the same. What…
Marketers Have To Turn Up
Koen Pauwels, a well-known marketing academic at Northeastern University, has a very useful book on working with marketing data. He focuses a lot on marketing dashboards and analyzing data. Rather than attempt to relay all the points, you can read it yourself, I want to focus on a little anecdote about the creation of the…
A Customer Equity Balance Sheet
The book, Customer Equity, is a bit of a classic in the marketing field. It is an early attempt to refocus companies from products to customers, specifically through measurement of the value of the customer base. The authors introduce a lot of interesting new ideas. They have many admirably big swings and, to be honest,…
Non-GAAP Disclosures and Implications for Marketing
An interesting phenomenon has emerged over recent years in financial accounting which could prove relevant to marketing. This is non-GAAP reporting by companies. What is, could be, the relatonshp between marketing and Non-GAAP disclosures. GAAP: Generally Accepted Accounting Principles The rules of external financial reporting, Generally Accepted Accounting Principles, are known as GAAP. Non-GAAP reporting…