Quantifying Marketing Success Using Dollars and Cents
By Paul Provost
Return on Investment (ROI) should be top of mind for every business that wants to succeed. But while some marketing initiatives will garner attention in the short term, issues arise when business owners analyze their marketing ROI on a project-by-project basis with expectations of short term results.
Business owners are aware that every investment they make must be strategic and economically sound. In turn, marketing tactics must work in concert to increase awareness, interest and activity over the medium to long run, from your branding and advertising campaigns to your sales calls.
It is important to distinguish between whether advertising is meant to build awareness or drive a call to action. When your prospective customers are not at the top of their buying cycle, efforts should focus on increasing awareness and interest rather than pushing your target audience to purchase. In very few industries can a person can go from total ignorance of your company or product, to purchasing it on the spot.
A practice generally followed by advertisers is that it takes seven or more touches for a person to go from ignorance to awareness and retain knowledge of your company/product. For example, take these two common marketing tactics:
New Logo or Tagline Critical to every new business or established brand in need of a refresher, a new logo or tagline does not create direct ROI within 30 days, 90 days or even 12 months. This kind of brand tactic is designed to increase the perceived value of your brand over the long term. Your website, sales handout and other brand collateral should be viewed in the same light.
Direct Mail Campaign When people first see your direct mail piece, they may read your name and gauge how you rank against the competition. If you catch your audience when they are in the market to buy (unlikely), they may fit into your top prospect pool and take action. Odds are, however, that this tactic is most effective when used in tandem with other tactics, such as additional direct mail pieces, online advertising, outdoor advertising and sales calls, to create additional impressions. Over time, these tactics will lead to full recognition and the desired action.
While these marketing tactics can be tricky to track in terms of ROI, using a robust Client Relationship Management (CRM) system like Salesforce or SugarCRM can help you track leads, awareness and close ratios so you have a sense of what’s working over time. They key is to view your marketing strategy as a whole, rather than focus on individual cogs in the machine.