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We all know the argument that calculating marketing ROI is expensive. There are all sorts of technical barriers, not to mention lawn issues. Like the constant battle between marketing and sales over who gets credit for what.
In addition, most businesses, especially manufacturers, sell through distribution, which is often an obstacle rather than a source of customer insight.In addition, there are long sales cycles, especially in business-to-business marketing. .
Finally, there’s the issue of attribution (as raised by the “customer journey” proponents): if a prospect sees a new product announcement on social media, they Google it, find it on a web page, Visit, watch videos, and order on Amazon. What tactic is to gain sales “credit”?
Opposite perspective: ROI is easy
On the other hand, there is always someone in the company. Usually he’s the CFO and says marketing just wants a “jailbreak” card. Her ROI is very simple.
In some ways, if you limit yourself to simple math, CFO is right. For example, your marketing budget for a product launch is $100,000 and you sell to 50 customers. So each sale costs him $2,000.
Marketers will quickly rise to the occasion and find that the purely mathematical approach is overly simplistic and ignores the value of brand equity and long-term brand building.
Marketers have come under fire for overcomplicating simple calculations by claiming that it is too difficult or too costly to calculate the return on investment for marketing. And demand a free pass, claiming that marketing is about branding nirvana, in some way liberated from the day-to-day realities of business.
As a marketer, I can tell you it’s not a good idea.and that marketing No on dispute.To do No Get a free pass.
in my book brand vision: Clear vision to align business strategy with marketing tactics, I make a similar argument — marketing cannot let corporate strategy pass freely, and marketing must be the CEO’s best advocate. This is the same as marketing ROI with a new twist It works like Marketers embrace, own and champion ROI. Or give a corporate rival (such as sales) a stick to beat them.
big chance
Those who argue that marketing should be excluded from financial reality undermine their claims. In effect, make sure that marketing is seen as an expense that can be saved during hard times. The first “nice to have” in line to get an axe, perhaps even more expendable than the company’s bowling team.
Worse, they Huge chance. Marketing is an opportunity to be viewed not as an expense that can be cut at the earliest opportunity, but as a critical production input, like the raw materials essential to prosperity and growth. More on that later.
What’s your biggest problem? There is no easy, one-size-fits-all solution. Harvard University guru Michael Porter famously wrote that the more differentiated your strategy, the harder it will be to imitate (and the more successful your company will be). Again, what applies to corporate strategy necessarily applies to marketing ROI. Our ROI methodologies and tools differ from global competitors, industry best practice leaders, and cross-town rivals.because you Different.
Strategies require differentiation and should be tailored to your unique circumstances. So marketing, and measuring marketing ROI, should be similarly differentiated.
game changer
As a result, the benefits of a differentiated marketing ROI approach can vary from company to company. But if done right, the bottom line is simple. Knowing her ROI in marketing is going to be a game changer.
Specifically, understanding what works in marketing provides important insight into how to balance initiatives and adjust budgets.
The right mix of media and tactics
What is the right balance of marketing tactics to use? No We propose to calculate the ROI of Twitter and Facebook posts, emails and searches.
reason? As I wrote before, none of these tactics work in isolation. There are very few sales, even on Facebook and email. Here’s the proof: I was in the same room many times trying to figure out why my client’s search volume suddenly dropped. There are no changes to how search ads are created or how metadata is created on pages. But the answer came from a broader perspective. The client had paused its advertising budget. As a result, fewer prospects see attractive offers and search. Therefore, search volume and sales decreased.
Good news?electronic media Made connected to each other. So instead of wasting time trying to figure out which tactics triggered the sale, focus on the campaign itself.Are you striking the right balance between paid, earned and owned media? Field of Dreamsyou don’t know if people will come even if you create a great web page or shoot a great video. Unless you tell them about it.
As a CEO, you don’t have to worry about whether your posts on Twitter are more effective than your search ads. it’s not your job. Marketers should do it. If you can’t trust them, you need a new marketer. It’s as easy as that.
Therefore, the marketer’s job in this brave new world of electronic marketing is to strike a complex balance between different media and tactics.
budget
How much spending is enough? How much is too much?? That’s not a question we get asked often. However, we have seen many campaigns with minimal paid search budgets and a variety of media. As a result, the search campaign is exhausted in a few days of the month, but the campaign lasted all his 30 days.
Did they underestimate the promotion in search and wasted their money? Specifically, prospects saw an ad or received an email, then clicked on the Google search bar to find out more. Headed to? So some people couldn’t find you without the help of paid search? But I think some were.
Without good analytics tools, good data, and an ROI strategy, there’s no way to know these things.
No, there are no applicable industry benchmarks. Like strategy, effective marketing tactics should be customized to your unique audience, positioning, and offering. Even two years of solid data is worth more than generic “best practice” statistics.
Upcoming campaign
The biggest advantage of mastering ROI is the track record it creates and the ability to pull back the curtain and peer into the future. The way marketing is currently done is as if marketers have some kind of memory impairment and every new initiative is Groundhog Day.
But knowing what went well last year is a great way to start planning for this year’s blockbuster event. What if you only knew that this year’s campaign was about as effective as last year’s? And how much would it cost to generate the leads and sales you want?
It’s hard to imagine a new initiative that doesn’t benefit from this insight. How much should you spend on a new product launch? To capture all the revenue possible before coming up with viable alternatives? By maximizing the key dominating moments in the product lifecycle, before competitors catch up. maximize performance and profits.
Such processes can lead to the inclusion of marketing investments as part of new product development initiatives. So rather than marketing a new product being funded from the start and added at the end, typically a beleaguered marketing department dedicates resources to promote the biggest thing since the slice of bread. I’m having a hard time finding it. Especially when marketing feels uninformed and blind about new products.
the goal? Make marketing more than an expense. And let it be considered as an input for manufacturing. Just as you can’t build a new computer without a chip, you can’t launch a new computer product without marketing.
The first step in calculating marketing ROI is far from perfect. But you have to start somewhere. Think of this as a natural result of continuous improvement efforts, unlike Six Sigma.
Do the marketer a favor and request this. They’ll thank you in the long run. Give them a seat at the table because it makes them a player. Or at least a chance to get one.
Written by Jim Everhart.
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