Having the ROI conversation before it’s too late.
As a marketing firm, we’re often asked to demonstrate ROI. And we should be. Our clients need to know that their marketing dollars are having a positive impact. But showing a clear return on investment is a team effort—a nimble dance between agency and client.
Unfortunately, the ROI conversation often occurs way too late in the game. And, all too commonly, it doesn’t happen at all. In this article, I’ll provide some rules of engagement around having a productive ROI conversation.
First, here are some things to avoid.
Don’t confuse ROI with CTR.
I’ve you’ve followed our content, there’s a good chance you’ve heard me say that sales are the only metrics that matter. A vast oversimplification, yes. But the point is not to get all twisted up around things that don’t really matter…or, more accurately, not to get hyper-focused on a metric without seeing the full picture. A click-through rate (CTR) of 0.13% often has people doing cartwheels. But, without context, we can’t know what that really means. After all, the next logical question is, “What happened after that click?”
To be fair, if you’re Facebook or Google, you do know what happens after the click. But most of us are building campaigns that connect to a fragmented array of dealer and distributor systems, online catalogs, global parent companies, and legacy internal silos. So, for us regular folks, we just have to hope that click translated to a contact connection or even a sale.
Don’t forget the value of brand building.
Brands matter more than ever, especially with the growing commoditization of most products. So without a strong, well-defined brand, your customers will be left to evaluate your product on what they understand best: price.
But branding is notoriously hard to measure—and even harder to clearly demonstrate ROI. Most brands don’t have the resources for the costly and time-consuming brand studies necessary to quantify what customers believe about them. Compounding that challenge is the fact that moving the customer perception of a brand generally happens over a long arch of time.
Don’t change the rules after the campaign is running.
If you don’t determine how to define the ROI at the start of a campaign, someone else will do it for you. This may sound obvious, but it’s the most frequent issue around ROI conversations. Often the people in the day-to-day grind of managing the workload in a corporate marketing department are spread way too thin to think about the ROI at the outset of an effort. Once things are up and running, it’s typically someone from the C-suite that poses the reasonable question: “How are we measuring the ROI?”
We’ve all been there. And the rest of the conversation doesn’t generally end well.
Now that the pitfalls have been defined, here’s how to discuss ROI in a productive fashion. It really comes down to just two simple questions.
- What does success look like?
This is a very simple question to ask…but it’s not easy to answer. Because the question is intimidating, we can default back to digital metrics. After all, there are plenty of data points to make for a swanky PowerPoint chart—and it looks like science.
But we need to be both honest and realistic. What are you expecting to accomplish with the campaign or marketing effort? Is there a specific sales goal? Or are you trying to increase product awareness among your audience?
- How will you measure the effort?
Sales tracking is easy, but when you’re selling complex B2B products, the sales cycle is often years. I recall working on pizza coupons early in my career. We could run a report of all the scanned bar codes to get immediate results. But that isn’t going to work with lift trucks that cost $700K. (Although, to be honest, I haven’t tried.)
Coupon codes aside, you don’t have to get discouraged. Simple pre- and post-campaign surveys can tell you a lot. And if that proves problematic, your sales team can often look at quote and call activity for enlightening metrics. There are also helpful ways to analyze the use of digital assets provided to dealers and sales staff, including downloads of gated material. The key is to be creative within the sales channels you have. And be crystal clear about what you’re measuring.
ROI is not the mysterious, mythical creature most of us think it is. It’s a valuable source of information for the customer—and the agency—to determine the what’s, how’s, and when’s of marketing efforts. We just need to get in step with each other…and make sure we’re all listening to the same tune when the music starts.