It’s one thing to ask, “What’s my Marketing ROI?” However, determining the answer can be very difficult.
So what factors should you consider measuring the effectiveness of your marketing strategies and programs?
Timing is everything
Unfortunately there’s no way of knowing how your investment today has an impact at any point in the future. Last month’s sampling campaign may deliver results next month or perhaps not for 18 months, however you need to decide where to invest your marketing funds now. Making assumptions and monitoring actual results of all activities will enable you to
Attribution of multiple customer touch points
Marketing theory says that there are at least seven touch points needed in order to convert a cold lead into a sale. Even if this is not the correct number, the theory conveys an element of truth that every marketer should understand in that it takes multiple touch points to inbound a customer. So when you are considering each touch point for your Marketing ROI analysis how do you allocate revenue to any specific touch point?
The significance of multiple influencers
The average procurement committee ranges between four to six people. In the case of larger companies or more complex purchases, procurement committees can involve 20 or more influencers. Your marketing programs persuade each individual differently, so it is extremely hard to know which programs have the most impact on each individual.
Extraneous variables outside your control
Factors outside the control of Marketing can significantly impact program results – from macro-economic trends, to the climate, to the quality of your sales team. Let’s say revenues increased because the economy improved, can marketers attribute their initiative to the better ROI?
Additional factors to consider in your Marketing ROI analysis
- Point of comparison - Which of your marketing programs are most effective when compared with historical data? Which ones have and have not added significant value? Be careful of the ‘apples and oranges’ comparison trap, so think of ways to normalise data.
- Quantity and quality of data inputs - Which areas need further data collection and which have already been thoroughly investigated?
- Strategic intent – Was the intent of the initiative acquisition of market share via customer penetration or perhaps the intent was to drive higher weights of purchase from existing customers? Different strategic intents can significantly influence outcomes
Clearly measuring Marketing ROI is not going to be a walk in the park. However, just because it isn’t easy and fool proof doesn’t mean it’s impossible or worth persevering with. Understanding the factors above is the first step on your journey to measuring the effectiveness of your marketing initiatives.