Marketing ROI: Look Beyond Current Sales
Marketing ROI: Look Beyond Current Sales
We asked marketers who sell through dealer channels about their concerns. Measuring marketing ROI, or return on investment, was number one by a wide margin. We feel your pain. Sales are the only metric that ultimately matters. But in a long sales cycle, how do you know you’re pointed in the right direction? We’re here to help.
Marketing’s Real Job is Future Sales
Repeat this: Marketing’s real job is future sales. Current sales figures matter, but they only tell a story about how well you did your marketing in the past. Using current sales to measure how you market today is like driving your car by looking in your rear view mirror. In our experience, this happens because marketers operate without a clear vision or goals. This doesn’t have to happen, particularly because all marketing goals fit into two categories:
- Short term, which focuses on getting people to act now. Think promotions and incentives to give your customers reasons to buy.
- Long term marketing that gets your brand into your target buyer’s consideration set and keeps it there. This kind of brand building keeps your product in a leadership position and prevents the need to compete on price.
One doesn’t work without the other. You need short and long-term marketing goals, and a sound balance between them. In reality, marketers often obsess over short-term goals, and compound this error by using sales as their only measure. A lot of long-term progress happens purely by accident, not design.
Companies struggle with this because of how they are wired. Companies that have been successful sales-driven organizations have a tough time becoming brands because they equate marketing expense and immediate sales. Spend a dollar, get a buck-thirty in return. That’s the mentality. What’s a savvy marketer to do?
Step One: Check Your Map
You cannot measure marketing return on investment if you don’t have a clear idea of where you want to go, and what you want to achieve. Sales are the long term outcome of your activities. It’s your job to show how interim goals create a foundation that makes sales, market share and margin growth happen. Ask yourself and your team some hard questions about how you want your brand to be perceived in the marketplace. When customers think about you, what do you want planted in their minds — commodity, value or premium brand?
Step Two: Take Stock of Your Toolkit
You probably have a lot going on. You go to trade shows, place print ads, manage email campaigns, and have a website. This means you have data. Spend some time with it and see if you can identify any trends.
Don’t get lost in details. Look at aggregate, long-term data that shows overall trends. We suggest plotting out the information on a graph or chart so you can overlay different data points over time. Be sure to make note of events that may cause a sudden change in results. This can be anything from a major weather event to a new product announcement.
This process is valuable, but it won’t tell you everything. This sets you up for the third and most important step.
Step Three: Invest in Research
Many marketers hate research. It’s like taking all the worst things about math and science and removing the hard-earned illusion of certainty. If you’re in this camp, ask yourself: Am I better off guessing?
Here’s where you flex the “I” in ROI. Research is an investment and you should sell it to your boss, board or others who have to buy in as such. Research clarifies your current position and guides your planning process. It is a big topic, but we tend to keep research pretty simple. If you’re new to this, start with qualitative research, A.K.A. talking to people.
You’ll be amazed at what people will tell you when you ask. We prefer to structure these as conversations and allow people to go off script. Pure researchers may scoff, but we maintain that this is how you learn the really interesting stuff. Here’s an example: The best product in the world isn’t enough if you have a reputation for failing to support it. Qualitative research tells you this.
Quantitative research matters, and we are proponents of online surveys. Online surveys allow access to a broad set of participants, allow easy follow up, and are very cost-effective. In terms of pure value, they’re at the top of our research toolkit.
Now, a Word of Caution About Research
This happens: Marketers who successfully sell the need for research succumb to a powerful temptation. They turn research into the goal — a six-figure (give or take) study that is so detailed and rich in data that they cannot afford to interpret. It says a lot (they think) but fails to help marketers set real goals.
Unless you are in the business of selling research, research is only a waypoint in the journey. You need the research to set short-term and long-term goals. Those goals help determine tactics. And the tactics create consideration, sales and — if you’ve done your job — margin growth.
Or you can guess and hope for the best. Please don’t.