by Jim Lenskold
Marketing ROI – 20 Years of Swimming Against the Tide
Last week Lenskold Group celebrated its 20th anniversary. A lot has changed in the world of marketing ROI and measurements since 1997. And, believe it or not, a lot has remained the same. With such incredible advancements in marketing automation and data access, how is it possible that marketing ROI and measures of financial contribution still have not become standard practice?
Well the answer is quite simple. The process takes a reasonable amount of effort, skills and discipline so it requires a concerted level of organizational commitment. Bottom line…the corporate culture is and has always been the most significant barrier.
This is good news since it can be resolved. Over the past 20 years, there has been one common characteristic of all companies that have made significant progress with marketing ROI. Either a senior executive, someone in marketing operations or a group of champions managing marketing at the campaign level, decided the effort to overcome these barriers was worth the benefit. They recognized that driving financial outcomes was the ultimate objective and that smarter measurements could guide high impact strategies.
In recognition of our 20 years in business, I’m sharing 20 quick tips for culture breakthroughs to help your marketing ROI capabilities turn the tide and move to the next level.
- Map out the buyers’ journey – Define the key stages the buyer moves through and the key metrics that offer insight into the funnel flow of that journey. This is the first step in linking initial outcomes to financial outcomes.
- Quantify strategic plans – Estimate the immediate impact from your impressions or reach, the expected funnel flow that follows and how that should net to incremental sales, revenue and profit. The spend relative to the profit provides your base ROI scenario.
- Run alternate ROI Scenarios – Take your base plan and prepare 2 or 3 alternatives that vary aspects of the strategy such as the spend, targeting, funnel impact, media tactics or multi-touch integration. This is where you uncover new opportunities.
- Prioritize measurement objectives – Choose new measurements initiatives that can produce reliable results, make a solid impact on business decisions and are repeatable.
- Make the most of the data you have – Don’t wait for perfect data. Make reasonable estimates where gaps exist and seek to validate your estimates by monitoring sales trends as successful campaigns are repeated or scaled up.
- Collaborate with like-minded team members – No question that teams can help each other creatively get past challenges and find a path forward.
- Maintain credibility – Be honest and accurate with your ROI calculations and also disclose any measurement limitations (such as estimates). Precision can build with time as long as others trust the info you share.
- Run pilots to build capabilities – Small teams of willing participants, from marketing and/or sales teams, work well to trial new techniques and processes.
- Build momentum – Use your initial success stories of how new measurements or ROI insights improved performance in order to earn support from others. This works for expanding across an organization or winning executive backing (and funding!).
- Build in increments – Steady improvement in adding new capabilities is much more important than fast adoption, which can overwhelm some team members. Earn acceptance and minimize resistance.
- Raise the bar – Once basic processes are established, add a basic level of organize-wide requirements to use ROI scenarios and measurements for large or mission-critical marketing initiatives.
- Expand experimentation – The fastest path to improved performance comes from experimenting with alternatives that help identify changes that drive higher performance potential.
- Automate to simplify – Tools that aggregate data, support measurements and analytics, run ROI scenarios and present dashboard metrics make it easier for team members to leverage valuable insights to guide their marketing decisions.
Achieving Advanced Capabilities
- Add analytic & operations staff – Experts in measurements or operations also simplify the ROI process and accelerate adoption. These experts are better equipped to grow capabilities and bring along marketers as users of the insights.
- Improve data capture – Reduce an organization-wide pain point with a commitment to aggregate and enhance a complete data set with contact details from the initial marketing touchpoints to activity, engagement, conversion and relationship value.
- Shift to proactive measurement planning – A huge leap that boosts credibility and wins over senior executives is to move from the mindset of post-marketing tactical measurements to proactively planning measurements for that uncover strategic breakthroughs and identify untapped profit potential. The approach starts by identifying organizational insight needs and then builds measurements into the appropriate tactical executions.
- Analyze customer behaviors and value – Deeper analysis into customer behaviors and value provides a reliable source of financial and performance data that can be used in ROI scenario planning and measures of incremental sales.
- Prioritize segmentation initiatives – As the best source of ROI improvement, any initiative to help guide targeting to better reach high value and high potential contacts will have significant payback.
- Build multi-touch contribution measures – This addresses the critical measurement challenge raised by marketers and executives who question single attribution or the benefit from brand and engagement touchpoints that lack direct sales contribution. Solutions can include measures of integrated campaigns, measures of incremental contribution or modeled attribution that redistributes sales credit.
- Implement predictive analytics and metrics – Performance reporting gets much easier when you can report current engagement results and a projected ROI with reasonable confidence. This allows reporting of financial outcomes instead of interim outcomes that are of less interest to executives.
Enough of swimming against the tide. Select three of these culture-changing opportunities based on your current marketing ROI capabilities and ride the wave to the next level of performance. Organizational adoption works best when the team understands that the additional work will lead to additional success.