Return on Investment or ROI may be the force that drives most Businesses but it is also the most dreaded term in our industry.
I often hear our sales and business development guys say, that many of the prospects (especially marketers and marketing agencies) they meet become vary when it is mentioned that LeadFormix’s marketing automation platform helps in measuring the marketing ROI.
For years marketing folks have presented their case, by stating it is difficult to measure the real ROI for their efforts because, no one can accurately measure, how many people are influenced by an advertisement or a press release or a news report.
The argument is based on the fact that no customer really runs off to a shop or vendor to purchase a product or offering, the moment they read or view a marketing pitch, if they do, the numbers are far and few. Usually people read or view a marketing pitch, register it in memory and act on it at a much later date, than what would be considered when evaluating the ROI of the marketing activities performed.
True, but today we live in tougher times, a technology that is revolutionary today is outdated tomorrow. Customers have the money, the power and the information at hand to make informed choices. In such a scenario, businesses have to be aggressive and accountable for any and every penny they spend on increasing their customer base.
Wether we like or dismiss it, ROI measurement is going to be a key factor in deciding the performance of marketers and marketing agencies. In this post I share a few reasons on why ROI measurement can actually be a boon for a marketer.
Documented Validation
Next time your client makes a sweeping statement, “I am not happy with the way things are going, I don’t see any value in your efforts, I think these campaigns are a total failure”. You have data to prove him otherwise or if the data is in line with what he says, you know its time for course correction.
Helps Optimize your resources
As marketers, we use multiple campaigns and multiple channels to promote these campaigns – knowing which campaigns or channels are bringing in the leads or business enquiries, help you optimize your resources and spends on those campaigns and channels that are yielding you desired results.
Increases your risk-taking quotient
If you can track your performance and the way your efforts yield results, you will be more comfortable taking risks and checking out new avenues and methods of marketing, than the tried and tested formula. The fact that you can measure your returns helps you in limiting your spend the moment you see your marketing efforts are not responding the way you would like it to.
Improved Budgeting
This has always been tricky for marketers, investing your marketing budget on the right channels ensure, you get maximum out of your investments, but deciding on which channels are more popular with your target audience can be tough. You have a choice, you can either go with the popular perception or trend or fall back on real data which shows the channels most populated by your prospects and go with them, even if it is not in line with the latest fad on the marketing circuit. It will be a safe bet.
Better Prospecting
Talk to any CMO and he will tell you, how difficult it is for him to predict how the market forces will work 10 months down the line, especially if he does not have enough data to support his conclusions. Measuring the ROI helps companies to predict and prepare for the future. How your company performed in the previous years, how much did marketing contribute, what were the pitfalls and achievements all become the ground for estimating and evaluating on what the company can safely expect in future from their marketing activities.
Fodder for your marketing collaterals
Measuring your marketing ROI will provide you with enough fodder for your marketing collaterals like, case studies, blogs, whitepapers even any speaker opportunities your company representatives might use for lead generation. It does not matter, weather the outcome is positive or negative, what matters is that there is a learning, which people can benefit from and you can share.
Better strategizing
Be it for your own company or your client, if you have good data at hand to evaluate and analyze you can easily work on improving your overall marketing strategy, add different elements, make it more dynamic, yet practical. You can focus on executing your strategy than on how to be on track with the initial plan. Also, a clearer roadmap ensures more productivity and better performance by your teams.
The reason behind not wanting to measure your marketing ROI, is only one, ‘Fear’.
Fear that such data might be held against you or your agency, fear that it will disclose the faults with a campaign and highlight the pitfalls. But then these will eventually happen even otherwise and maybe at a much higher cost. There is no need to get psyched about tools, methods and people who help you measure your marketing ROI, in the long run, the positives far outweigh the negatives.
(Comic: Bill Hood)
