Marketing is tough. It takes oodles of skill, knowledge and hard work to pull off.
But even if you do everything right – even if you put together a brilliant marketing strategy and execute it flawlessly – your job still isn’t done. Because while YOU know marketing works and is worth what you’re spending on the front end, you still have to prove that to your boss or the CFO or whoever is responsible for paying the bills.
With so many variables at play, it can be difficult to articulate ROI or ROMI (Return On Marketing Investment), but these few tips will help get you started:
And thus, the strategy for determining ROI or ROMI will be different, too.
If you have a product where it’s easy to track direct attribution – “We spent X marketing dollars and it led to Y revenue dollars” – great. Use that to your advantage.
But in most cases, the reality is more complicated. You’re going to have to step back, look at the larger picture and analyze trends. Look at what matters to your business or company specifically. What is your ultimate goal, and how is marketing helping you achieve it?
Maybe you’re using Facebook ads to boost awareness, for example. You may not be seeing direct conversions from those ads, but if you stop running them and suddenly overall sales drop, pay attention to that trend.
Don’t abandon your entire strategy over a single spike or dip, but you have to learn to make strong inferences and decisions based on market data and past performance.
“The reality is, you’re going to spend some money that doesn’t work out,” said Oodle Partner Ryan Hughes. “But that’s OK, because you’ve learned something new. We have a new data point that tells us, ‘Hey, when we spend money over here, that doesn’t result in a positive ROI or a positive ROMI.’ Or maybe it does, but it’s just not enough, and we want to invest those dollars somewhere else.”
Full-funnel marketing is about giving your potential customers exactly what they need at every stage of the buying process. And it’s important to think about every part of the funnel when you’re telling your ROI or ROMI story.
If you only nurture the top of the funnel, you might get a ton of new followers on social media or a ton of new visitors to your website – but no new sales.
If you only nurture the bottom of the funnel, you might get new sales at first, but once your existing customer base is tapped out, you’ll have no new prospects.
Make sure your company leaders are aware of these realities when you’re talking about ROI or ROMI and the fruits of your marketing efforts. Your social media ads might not be converting into direct sales right now, but that doesn’t mean they’re not worth the investment.
And the good news is, full-funnel marketing always pays off in the long run, because a well-nurtured top of the funnel makes bottom-of-the-funnel conversions so much easier – and cheaper – later on.
Think about your buying cycle. The longer it is, the longer you’ll need to analyze whether your marketing tactics are truly generating the results you want.
If your buying cycle lasts a year, you’ll probably need three years’ worth of data before you have any useful trends.
A longer buying cycle can also complicate direct attribution when it comes to ROMI. If you’re looking at a multi-million-dollar sale that took years to land, it’s impossible to look at it and say, “that’s because of this one Facebook ad or this one TV commercial.”
That’s why it’s important to step back and look at the larger picture. Where on the buyer’s journey did marketing play a role? How did you help with awareness or product information? If there’s a sales team involved, how did marketing enable their efforts.
Marketing ROI is a difficult story to tell, but it’s crucial to long-term success. The key is to stick with it. Pay attention to the full funnel and analyze marketing trends over time. And remember that you’re in a marathon, not a sprint, because every good marketing strategy takes time to truly yield results.
To learn more about proving your worth as a marketer listen to, Ep. 1 – Proving Marketing Value; Every Stage of the Funnel Matters.
