Marketing departments are now under unrelenting pressure to demonstrate a significant return on marketing investment (ROMI). This often leaves marketers uneasy, leading to questions concerning the efficacy of their work. Did this email campaign contribute to the product’s bottom line? How can I determine how much revenue that banner ad produced?
These may not even be the correct questions.
While it does make sense to consider ROMI when creating a marketing plan or campaign, it is unlikely that a single part of that plan can be correlated directly with sales. Many industries have lengthy “buy” cycles. Marketers may drop a program that cannot be associated with a direct sales result, and this may be a mistake. Do not abandon programs that may contribute to your thought leadership, brand awareness and other aspects of your overall marketing strategy.
Marketing and the “Buy” Cycle
The difficulty in correlating sales to specific campaigns is sometimes due to the length of your customers’ buying cycle. Many industries have cycles that are long and complex and involve multiple stages.
A customer might first find a lead to your company when downloading a white paper in an e-newsletter ad. Perhaps the customer registers for a Webinar to see a product demo and watch a video featuring your product manager. Perhaps that customer stops by your virtual booth at an online event, searches your online product catalog to compare your products side-by-side. When that customer makes a decision to buy, your name is typed into a search engine to obtain your contact information, and the conversation begins–or the sale happens immediately.
The point? The email ad, the Webinar, the video, the on-line event and the product catalog are all distinct components of your marketing plan. They do not exist or function as individual campaigns. It is the entire system that worked.
How to Focus Effectively on ROMI
So what should a marketer concentrate on when under pressure to demonstrate ROMI?
Do not think of ROMI in terms of sales tied to specific actions; focus on what your role is as the marketer. Take everything into account: raising awareness of the brand in your target audience, making your company competitive in that marketplace, attracting and qualifying prospective customers, providing correct and relevant content at each stage of the process, and supporting your sales team as a guide.
One way to measure your performance in each of these marketing functions is to define ROMI success in terms of goals rather than revenue. Keep in mind that each component probably contributes just one element to the overall sales momentum.
That component might be a first impression, a click, an inquiry, a request for approval or a Webinar registration. For example, a
prospective buyer may have interacted with your product manager during an online event in September, downloaded information in October, checked your product catalog in November and placed an order in January. Combined with the other elements in the
marketing process, the online event was a valuable piece.
I discourage using the “last click” analysis. This analysis attributes the sale to only the last marketing touch point. The “buy” cycle includes so many other necessary ingredients. Keep your focus concerning Return On Marketing Investments in a reasonably thought-out perspective. If each part of your strategy contributes to the sales goal, it is successful.
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