I was hoping it wasn't going to have to come to this.
But marketers - we need to have some words. From an earlier post:
This isn't a fluke statistic: there are other studies that show similar results. I have one question: What's wrong with you? Let's look at some reasons you might not track ROI on marketing programs - and take them apart.
Is it because you can't or don't know how?
There are more ROI calculators and guides out there than you'd ever need. Here are the basics of calculating ROI (big tip: it's based on profit, not gross revenue) and 5 steps to tracking your marketing ROI.
More specifically, there are loads of ROI calculators online that you can simply plug your numbers into. Here are ROI calculators for
mobile
marketing, for yellow page ads, for direct
mail and email, and for online marketing
and social media activities. There are many more as a quick search will show.
Ignorance of the rules is no excuse: if you're smart enough to run your business, you can figure out the ROI of your marketing programs. And that can help you find the big opportunities you're missing.
ZoomInfo points us to a recent study by the SLMA that says 65% of B2B companies surveyed don't track ROI from their marketing programs. 65% of you are making decisions on where to spend your marketing dollars without solid numbers on what your return on investment is? Really?
This isn't a fluke statistic: there are other studies that show similar results. I have one question: What's wrong with you? Let's look at some reasons you might not track ROI on marketing programs - and take them apart.
Is it because you can't or don't know how?
There are more ROI calculators and guides out there than you'd ever need. Here are the basics of calculating ROI (big tip: it's based on profit, not gross revenue) and 5 steps to tracking your marketing ROI.
More specifically, there are loads of ROI calculators online that you can simply plug your numbers into. Here are ROI calculators for
mobile
marketing, for yellow page ads, for direct
mail and email, and for online marketing
and social media activities. There are many more as a quick search will show. Ignorance of the rules is no excuse: if you're smart enough to run your business, you can figure out the ROI of your marketing programs. And that can help you find the big opportunities you're missing.
Is it because you judge success in
other ways?
If you're running a branding campaign, your measures of success might be awareness and net promoter scores, not direct revenue: the ROI of branding campaigns is much longer term. But that doesn't mean you shouldn't measure it.
Awareness in the marketplace is worth something. You can use online tools (search) to calculate the ROI of awareness advertising. Even if there's no obvious way to measure the results, creative thinking can help you come up the metrics that will help you define success.
A different flavor of this response is the "gut feeling" method. "Our sales team just knows what's working," some marketers will say. Baloney! Your sales team has anecdotal evidence at best. They don't take your costs into account at all, and they are completely biased -- towards their own accounts, favorite customers, and through confirmation bias for the programs they believe are best. Yes, you should listen to them; no, you shouldn't make budgetary decisions based on their feedback alone.
Is it because you don't have time?
Yep, tracking ROI is work. It involves spreadsheets and multiple emails and ongoing updates. But if you can't see how your various programs compare in terms of the real value they bring to your business, how can you make informed decisions about how to allocate your time and money?
And when compared to the total time you spend to create and implement a marketing program, it's really not that much time at all. Include time for performance tracking as you plan each project and this problem solves itself.
Is it because your marketing programs or budgets are set in stone?
In the ever-changing world of marketing, this is a dangerously out-of-date view to take, and I only include it because I heard it from one of my marketing colleagues. Yes, it's obvious to some business that advertising in the yellow pages or buying a sponsorship of a local sports team is always going to be part of their marketing plan. But where do those activities fit in relation to others? Should you be buying even bigger yellow pages ads? Or sponsoring more teams?
A fixed budget is no better reason. Even if your budget is predetermined, a great ROI analysis can demonstrate which programs need more funding next year, and which deserve less.
Take small steps
Whatever your reasons, it's time to start changing your ways. Please keep in mind that you don't have to do it all at once! Tracking smaller, more manageable programs with precisely measurable results -- like *ahem* online lead generation programs, for example -- can give you a good sense of what it takes and what you can learn.
What do you think? What reasons do you have to not measure the return on investment in your marketing activities? I'm curious to see what reasons you have besides those we've already listed. Let me know in the comments below.
"not a photo opportunity" image from dan taylor via flickr
"no time" image from only alice via flickr
If you're running a branding campaign, your measures of success might be awareness and net promoter scores, not direct revenue: the ROI of branding campaigns is much longer term. But that doesn't mean you shouldn't measure it.
Awareness in the marketplace is worth something. You can use online tools (search) to calculate the ROI of awareness advertising. Even if there's no obvious way to measure the results, creative thinking can help you come up the metrics that will help you define success.
A different flavor of this response is the "gut feeling" method. "Our sales team just knows what's working," some marketers will say. Baloney! Your sales team has anecdotal evidence at best. They don't take your costs into account at all, and they are completely biased -- towards their own accounts, favorite customers, and through confirmation bias for the programs they believe are best. Yes, you should listen to them; no, you shouldn't make budgetary decisions based on their feedback alone.
Is it because you don't have time?Yep, tracking ROI is work. It involves spreadsheets and multiple emails and ongoing updates. But if you can't see how your various programs compare in terms of the real value they bring to your business, how can you make informed decisions about how to allocate your time and money?
And when compared to the total time you spend to create and implement a marketing program, it's really not that much time at all. Include time for performance tracking as you plan each project and this problem solves itself.
Is it because your marketing programs or budgets are set in stone?
In the ever-changing world of marketing, this is a dangerously out-of-date view to take, and I only include it because I heard it from one of my marketing colleagues. Yes, it's obvious to some business that advertising in the yellow pages or buying a sponsorship of a local sports team is always going to be part of their marketing plan. But where do those activities fit in relation to others? Should you be buying even bigger yellow pages ads? Or sponsoring more teams?
A fixed budget is no better reason. Even if your budget is predetermined, a great ROI analysis can demonstrate which programs need more funding next year, and which deserve less.
Take small steps
Whatever your reasons, it's time to start changing your ways. Please keep in mind that you don't have to do it all at once! Tracking smaller, more manageable programs with precisely measurable results -- like *ahem* online lead generation programs, for example -- can give you a good sense of what it takes and what you can learn.
What do you think? What reasons do you have to not measure the return on investment in your marketing activities? I'm curious to see what reasons you have besides those we've already listed. Let me know in the comments below.
"not a photo opportunity" image from dan taylor via flickr
"no time" image from only alice via flickr
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