Marketing Insights - The Art and Science of Creating Demand

Not enough marketers are measuring ROI. ROI – the term I hate to love. I LOVE it – because it is essential to improving campaign performance. I HATE to love it – because it is hard. So hard, in fact, we have a gazillion ways to refer to it: marketing ROI, short-term ROMI, long-term ROMI, closed-loop reporting, marketing effectiveness measurement, direct revenue impact, influenced revenue, etc.

Call it whatever you want – you need a way to tie revenue impact to your campaigns (across marketing-initiated campaigns, sales-initiated prospecting campaigns, partner-driven campaigns, etc.). And, let’s be clear – you don’t need it just so you can prove your worth as an employee to your organization. You need it so that you can trend, compare, and optimize your campaign performance in the short term and better plan for the long term. This is about trend over baseline metrics to make educated decisions on resources and spend – not who “gets the credit”.

I have to slightly disagree with David Meerman Scott and his position in Why marketing ROI measures LEAD TO FAILURE. Mr. Scott believes executives hide behind ROI and “play it safe” and I have certainly seen that attitude take hold. On the other hand, a world with no measurement of marketing effectiveness leads to a failure in demonstrating value to the business. I believe that ROI measurement should foster conversations and inspire improvement as well as risk-taking. And, certainly “return” and “investment” may need to be examined within context of the campaign objective.

If you do not have any ROI reporting in place today – I want you to stop what you are doing and make it your next quarterly focus to get it in place. I don’t care if you think it is too difficult of a task. If you do have ROI reporting in place – I want you to consider how you leverage that information to improve your communication mix. Perhaps, you are ready to take your revenue attribution model to the next level of sophistication.

This is the intro to a 4-part series on debunking the myths that I see preventing many marketers from tackling ROI reporting at all – or at the other end of the spectrum – aren’t using the ROI data points to make relevant decisions.

Myth #1 - You can only control leads into the funnel so cost per name and cost per inquiry is enough. Reality Check – One conversion metric cannot tell the whole story.

If cost per name were the only metric that mattered then you could hand our sales team a phone book and call it a day. Or, maybe you just advertise on the cheapest keywords possible. Looking at the economics of each conversion milestone of your lead funnel will help you to understand what triggers you can pull to impact specific stages of the sales pipeline. This way you can adjust volume into the funnel AND impact the velocity through the funnel as well. For a more transactional sales process, you still need to evaluate beyond cost per inquiry and look at the attribution from a lifetime customer value perspective.

An example – Omniture recently talked about their own offer testing where the “Complimentary Guide” converted 42% more inquires over the “Online Webinar”. But, the Webinar converted 155% more sales-ready opportunities from the inquiries over the Guide. Getting “beyond the lead” metrics is critical to really understanding marketing effectiveness.

Tomorrow we will tackle one of my favorite discussions. Myth #2: Long-term ROI analysis is better/worse than the short-term ROI analysis.

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