Measuring Marketing ROI Part 4 – Not “ROMI Made Easy”

Continuing a series of blogs on Measuring Marketing Return on Investment (ROI):

Measuring Marketing ROI – Why Marketing is Not an Expense
Measuring Marketing ROI Part 2 – Tips to Overcome Challenges
Measuring Marketing ROI Part 3 – Developing ROMI Revenue Metrics

Activity Metrics: Measuring the Marketing Details

Executive management may or not may not want to hear the details about which programs or campaigns deliver the best results, but your marketing team certainly does. After all, your day-to-day program execution – everything from email and social media to webinars and web site traffic – provides the insights that ultimately drives your strategic revenue-building efforts.

The metrics that you can extract from email campaigns, web analytics, webinar attendance and other sources are too numerous to go into here. Since websites are such a crossroads and anchor of many other marketing programs, I’ll look at some website metrics. But first, there are some general Activity Metrics measurement criteria that you can use:

Benchmarking Metrics

Marketers track a wide variety of day-to-day program activities because they are easy to measure. These include benchmarks such as:

  • Email marketing and enewsletter open, click-through and response rates
  • Web site visits and page views
  • Content asset downloads such as white papers or published news stories
  • Web site form completion and abandonment rates

These numbers can be very useful. If your email open rates begin declining from the historical rates you’ve previously captured, then it’s time to examine your email campaigns for potential problems. The same is true for web analytics, especially when you compare current data versus historical trends for page popularity and page abandonment rates.

Social media mentions, connections, “likes” and conversations are similar to other softer benchmarking metrics; you’re often comparing your metrics against your own historical data and searching for trends.

The key here, as with benchmarking metrics, is not to confuse social media success with bottom-line impact. It’s one thing to celebrate a record number of Twitter followers; it’s quite another to demonstrate just how those followers convert into leads, opportunities and revenue for an organization.

Measuring Your Brand Power

Back when I first got into marketing in the mid-90s, Chick-fil-A started their campaign “Eat Mor Chickin.” I remember driving on a highway in Atlanta with my new boss and remarking on this billboard and how clever I thought it was. I’ll never forget his response, “Does it make you want to go eat at Chick-fil-A?” He then explained the difference in branding and call to action advertising. In the previous blogs, we’ve talked about call-to-action. Measuring branding is a lot more challenging.

Your marketing investment seeks to accomplish two main goals: grow sales and build customer perceptions of quality service and best-in-class expertise in your brand.

But how do you measure the brand power of your marketing programs in the marketplace? Continue reading

Measuring Marketing ROI Part 3 – Developing ROMI Revenue Metrics

Continuing a series of blogs on Measuring Marketing Return on Investment (ROI):

Measuring Marketing ROI – Why Marketing is Not an Expense
Measuring Marketing ROI Part 2 – Tips to Overcome Challenges

Developing ROMI metrics

Calculating ROMI is not a perfect science. In developing ROMI metrics, don’t let a quest for perfection be the enemy of good. Knowing something about your marketing ROI is better than knowing nothing.

By setting realistic performance targets and integrating the performance targets directly into your marketing objectives you will be able to stay on track. Establishing the right metrics combined with tracking progress will help you assess where improvements and adjustments are needed.

  • Establish ROMI goals in line with marketing and company business objectives
  • Design marketing program and marketing data metrics in tandem to reflect shared marketing program and ROMI measurement objectives
  • Design MROI metrics that speak directly to the bottom line; avoid soft metrics
  • Focus on metrics that provide evidence change and growth in revenue and profitability and, if successful, will improve future marketing effort

ROMI Metric Examples

Measurement of marketing ROI is driven by metrics. Part of the challenge of developing these yardsticks is that there are so many aspects of that effort that can be measured.

There’s no one-size-fits-all guide to determining which metrics are right for your marketing. The right metrics provide insight into performance, and help focus your efforts and refine your strategies.

Albert Einstein once observed:

“Not everything that can be counted counts.”

(I’ll get to the rest of the quote later)

Some of these potential metrics are soft, nice-to-know measurements – often referred to as vanity metrics – such as increases in Facebook “likes” or your number of Twitter “followers.” Unless a Facebook “like” converts to a completed contact form on your website, this metric otherwise has no impact on sales.

Others are good-to-know measurements of marketing department activity, response rates, website visits and PR editorial coverage.

The most important are essential- to-know metrics that gauge the actual ROI impact of marketing programs on revenue.

The good news is that you don’t have to measure every possible data point to build a successful strategy. In fact, the best course is to focus on a relatively small set of clear metrics that capture the most relevant and meaningful data.

Focus on two categories of metrics: Continue reading

Measuring Marketing ROI Part 2 – Tips to Overcome Challenges

Calculating return on marketing investment has been a growing battle cry at companies of all sizes. There is increasing agreement that measuring ROMI is an important and valuable task. Otherwise marketers and companies may be blindly throwing dollars at marketing programs that are not delivering sufficient bottom line value.

But there’s more a battle than a battle cry. As more senior marketers enter the age of marketing metrics and quantifying the value of marketing to the bottom line, many are finding it to be an uphill battle.

It’s easy to ask the question, “What kind of financial results do my programs deliver?”  However, determining the answers can be challenging.

Multiple touches

Measuring the ROMI contributions of individual tactics of a multi-tactic campaign can be another challenge.

I like to compare a multi-tactic marketing campaign to football. There are a lot plays that go into reaching the end zone. From a measurement standpoint, you have tactical teamwork – passes, runs, blocking – all working towards the goal of a touchdown. Even though one player ultimately scores, it’s hard to assign credit for the touchdown to one player – it’s a team effort.

So is an integrated marketing campaign. You’re running trade ads focusing on customer service innovation. The ads’ call to action includes requesting a customer service white paper. There’s ongoing trade PR. There’s a promotion – say, discounts for multiple shipments, which is supported by direct mail, your e-newsletter and Facebook. From a marketing ROI standpoint, as you successfully get leads and conversions, how do you measure the impact of the individual tactics on sales?

It typically takes multiple touches to convert a cold lead into a sale which can take place over months, even years. These cumulative touches can range from face-to-face sales calls and exposure to marketing communications to digital interactions. This fact can make it difficult to link an ultimate sale to any specific touch.

Solution: However, you are still left with assigning credit. If you are going to assign credit to individuals and not the whole, be consistent. Attribute all the ROI value to the tactic that originally brought the prospect to you – maybe it was a webinar. Or, assign all the ROI value to the last touch as the final marketing activity – perhaps it was a direct mail piece, that converted a prospect into a customer. The trick is, be consistent.

Knowing when to measure

The money you invest today will have an uncertain impact at an uncertain point in the future. Last month’s trade show may deliver results next month or perhaps not until next year, but marketers need to decide where to invest their budget today.

Solution: Start measurement at the beginning of a marketing tactic’s sales cycle and continue for at least a year. Don’t quit too soon. A common mistake is giving up on tactics before they are done bearing fruit. Sometimes, prospects don’t act on something for months. Continue reading

Measuring Marketing ROI – Why Marketing is Not an Expense

Has your boss or client ever asked you the dreaded question, “How will this marketing specifically impact lead generation and sales?”

When I’ve spoken on this topic in front of fellow marketing professionals, my audience has typically answered the question with statistics featuring increases in Facebook “likes” or number of Twitter followers.

Unfortunately, unless a Facebook “like” converts to a completed contact form on your website, this metric otherwise has no impact on sales.

Let’s face it… most heads of companies look at marketing as an expense. When sales or profits are down, expenses are usually reduced or cut. My philosophy is marketing is an investment, not an expense to be cut. Like any investment, you should expect a return. So, how do you measure Return on Marketing Investment (ROMI)?

There are several versions of calculating ROMI, but the typical ROMI formula looks like this:

Return on Marketing Investment equals the revenue gain from a marketing program minus the cost of the program, divided by the cost of the program.

ROI = (gain – cost) / cost

For example: Let’s assume that you started a new advertising program, and it cost $50,000 in its first year, and it gained $600,000 in incremental sales during the same year, and that the gross profit from these sales was $200,000.

If you subtract your incremental advertising dollars ($50,000) from the profit generated ($200,000), you see that you have generated $150,000 of net operating profit.

Your ROI is

($200,000 – $50,000) / $50,000 = 3 = 300 percent

In other words, on average, each dollar you spent on the new program brought in three dollars of profit.

Benefits of ROMI

The benefits of ROMI are very real. ROMI allows you to: Continue reading

Marketing is Marketing… Or Is It?

I was sitting in a diner eating breakfast last week with someone who was interested in helping me find my next full-time job when he asked, “I know marketing is marketing, but what industry is your specialty?”

I paused.

And before I gave my answer, I started to have a debate in my head, after being asked versions of that question from potential clients and hiring managers throughout my marketing career. Is marketing the same no matter the industry? Do you need industry experience to be successful in marketing?

The answer is yes and no.

For companies who are seeking individual candidates or third-party vendors, I understand the desire to have a person or firm that knows their industry inside and out. And, I have lost out to others with more industry knowledge, both as an individual and as a firm. But… were they the best marketers?

Perhaps due to my years of working at two different marketing agencies and being in front of potential clients who were wondering if our agency had enough experience in their particular industry, I can confidently answer “yes, marketing is marketing.” Allow me to make my case…

Strategy
I would argue a person who has developed strategy for various verticals and has seen what delivers results (and what doesn’t) offers a different vision than what has typically been done in your industry by your company and your competition. If you are seeking something “outside the box,” you will have good luck in finding someone from a different background.

Tactics
The basics are the same – print & digital advertising, mass & social media, public relations, direct marketing, and so on. I won’t insult anyone by saying digital advertising for ecommerce is exactly the same as for a manufacturer, for example. However, where any good marketing person will show their value is Continue reading

LinkedIn Posting 101 – You Are Being Judged

While on LinkedIn, you may have seen battles surrounding what is considered appropriate content. You have likely seen the “Solve if you are a genius” posts, or posts about politics, or religion, or pictures of attractive women, followed by sporadic comments from people saying “This is Not Facebook,” and admonishing them for doing so.

I am not the LinkedIn Police, nor am I here to judge you.

But, rest assured, you ARE being judged.

As a marketing guy, I’m here to point out perception is reality. So, if you are on LinkedIn to network, keep your personal brand active, seek new employment opportunities, find new clients… you may want to keep the following tips in mind.

Be mindful of what you say and “Like”
Whenever you post a comment or like a post, your actions show in all of your connections homepage feed. Before you comment or like, consider… is this something you want everyone to see? Likewise, if you have a public profile, anyone can go to your profile page and see your recent activity. Current and potential employers and clients will be able to learn a lot more about you in an instant.

Personally, I know connections who tend to make strong comments about politics and religion. I know who “likes” every attractive woman’s posts. I know who spends time solving math problems and captioning photos. Do you think employers and clients will make their own conclusions on your personality or your work ethic? Right or wrong, they will.

Demonstrate your thought leadership
Since your potential employers and clients are seeing your activities, LinkedIn is the perfect place to Continue reading

Tips on What to do When Sales and Marketing are Not in Sync

According to a 2015 report, the misalignment of sales and marketing cost businesses $1 trillion annually in wasted marketing efforts and decreased sales productivity.

Tell me if this sounds familiar…

The company wants to increase sales and has a sales team and marketing team to accomplish this goal. The marketing team is thinking long-term, wanting to strategically grow brand awareness in key verticals. The sales team wants to move quickly because they have quotas to meet. The sales team points to the marketing team because they feel there are not enough quality leads, while the marketing team explains they need a bigger budget and questions what the sales team is doing since so many leads are not being converted.

So how do you get sales and marketing in sync?

Depending upon where I have been in my career, I have been referred as a marketing leader who knows how to sell, or a sales leader who knows marketing. To me, my passion lies with marketing, but I have held sales roles and understand both sides of the equation very intimately. So, here are six tips if you find yourself tasked with getting sales and marketing aligned.

1. Establish goals and how to measure them. It is critical both teams have goals that serve the same common goal, and objectives that support them. Further, it is important to have Key Performance Indicators (KPIs) established to help measure the same metrics.

2. Define your target. Is the ideal prospect the same to both sales and marketing? Who are they and where can they be found? What is the best way to communicate with them? Inside information from the people on the front line – the sales team – will be crucial to helping marketing better understand the target, what messaging works, and what channels they prefer.

3. Share strategy. Sometimes, the best marketing plan can fail miserably… if sales isn’t prepared for it. Collaborate on what products or services are being featured, what the messaging and hook is, and which audience is being targeted and when. This way, sales can anticipate and understand the motivation of the buyer and be better prepared. Continue reading

Monday Morning Marketing Minute: Study On Ads Showcasing Diversity, When PR Spokespeople Become the News

Your weekly roundup of marketing news, tips and mistakes! 

Could Vimeo Business Be Your New Video Marketing Service?
The global video-sharing website Vimeo recently unveiled a business-focused subscription plan aimed at startups, small businesses and agencies. You can not only share videos with calls to action buttons and an email subscription service, but also track your viewers’ engagement in targeted email campaigns…

Study: Ads Showcasing Diversity Connect More with Young Consumers
In the past, industry wisdom has suggested that the best business practice is to separate politics from marketing entirely. That may become less prevalent, however, as young consumers become receptive to or even demanding of more nontraditional representation in their ads…

Marketing Mistakes  
Learning from mistakes is critical. Who said they had to be your own?

When PR Spokespeople Become the News
While no one can argue Sean Spicer has his hands full as the White House press secretary and communications director, it became worse when he committed a PR no-no and allowed himself to become the topic of news (and ridicule)…

Need Sales? Create Your Own Hallmark Holiday

There is a debate whether St. Valentine’s Day is a “Hallmark Holiday.” Some regard it as a made up holiday, much like Grandparents’ Day, Secretary Day and Sweetest Day, where companies like Hallmark commercially benefit. Hallmark denies such marketing prowess on it’s website, citing the history of the holiday, dating back to 498 AD. In either case, it should be noted – and hard to place a value on – a company is associated with several holidays.

This got your Guerrilla Marketer thinking…

How can this concept help drive your business? What “holiday” can you create which will generate buzz, increase awareness and drive traffic?

You may have already done the “Anniversary Sale,” or “Customer Appreciation Day.” Those are okay. However, I’m thinking larger. How can you turn a nationally recognized day, and turn it into your own?

For example, I know on the first day of Spring, Rita’s will give out free Italian Ice to everyone. Every year, this is their big push to let the community know they are open for business. In fact, this year is their 25th Anniversary of hosting this event – at now over 600 locations in 30 states and five countries. There will be lines of people, even in cold weather, waiting for their free cone. People driving by will wonder what is going on, perhaps noticing the location for the first time. And, for those who went last year, many will now associate the first day of Spring with this chain.

So, what holiday or nationally recognized day or date can you use to associate with your business?

Can the first days of Summer, Fall or Winter tie in to your business?

What about Continue reading

Monday Morning Marketing Minute: Super Bowl Ad Reactions, Full-Stack Marketing Trends

Your weekly roundup of marketing news, tips and mistakes! 

Heinz’s Brilliant Non-Super Bowl Campaign
Want to call in sick today? You’re not alone. After last year’s unforgettable Weiner Dog Super Bowl ad, Heinz decided this year to start a petition for having the day after the Super Bowl off, and it has gotten plenty of press…

Three full-stack marketing trends for 2017
What is “Full-Stack Marketing?” It refers to someone who has a ‘full stack’ of skills – creative, technology, and data – and can deliver in any one of the areas, or across all three. Here are three trends for 2017 according to the co-founder and Chief Innovation Officer of Emarsys…

 

Marketing Mistakes  
Learning from mistakes is critical. Who said they had to be your own?

84 Lumber Website Crashes After Commercial about Immigration
For an ad considered “too controversial” to air completely on TV and directing viewers to see the rest on their website… wouldn’t it make sense to have the website ready for all the traffic?