How do we calculate Marketing Contribution Impact (MCI)?

MCI is a term you would probably not find in other marketing books, but its application helps you make better marketing decisions. MCI is the difference of contribution due to a marketing action minus the investment for this marketing action. For example, Company X is located in the German-speaking part of Switzerland and is interested in hiring three salespeople for the French-speaking part in Switzerland. What would the MCI be for hiring these three salespeople?

To quantify their profit impact, we need to estimate the contribution of each acquired customer. We measure this with a term called Customer Lifetime Value (CLV), which we will introduce in more depth in the next chapter. Suppose we have three salespeople and assume that they acquire nine customers on average per year, and each customer is generating a contribution of 40,000 Swiss francs . In that case, the additional contribution this firm generates is 1,080,000 Swiss francs. The company’s investment includes the salary for these three people—3 x 120,000 francs—and a 100% overhead calculation. In total, the company invests 720,000 Swiss francs per year. So, the marketing contribution is 1.08 million – 720,000 Swiss francs per year.

The resulting MCI is 360,000 Swiss francs (1,080,000 Swiss francs minus 720,000 Swiss francs).