Marketing ROI

ROI isn’t just a metric, it’s good marketing. ROI needs to be a fundamental ingredient in Marketing as it is in other strategic departments in the organization. It’s time for Marketing to become more accountable and to prove its worth to the organization, to justify budgets based on returns and to nurture profitable relationships with customers and partners.

In order to breed the ROI mind-set within your marketing organization, first you need to build performance metrics into the planning process. Every project must start with a defined objective, and the project should have a performance scorecard that includes the metrics (a/k/a Key Performance Indicators or KPIs) that measure results against the stated objectives. Second, host regular metrics meetings with your marketing staff to review, discuss and reset direction based on the results. Finally, hold your staff accountable for measurable results. Set personal incentives within their individual performance reviews that include these metrics, and reward their ability to meet or exceed the established targets.

You now need to leverage your analysis to drive smarter decisions and favorable actions from your staff which will lead to optimized results over time for your company. In order to initiate a more actionable culture within your marketing organization, follow these recommendations for continuous optimization:

1. Reporting - When it comes to reports, less is more. You’ll want to focus your reporting on the key metrics based on your marketing objectives.
2. Analysis - Next, you’ll analyze the data to identify trends and pinpoint areas that you need to improve upon.
3. Action - Action needs to become addictive within your organization. And decisive action based on sound analysis is the best kind. This is the most critical step in this process. You can’t improve results if you don’t act upon your analysis.
4. Results - Did your action have a positive or negative result? That’s what you’ll measure and report on next—comparing the before and after. If the result was positive, continue with that strategy. If the result is negative, test another action to fix it. It’s a continuous process of integrating analysis into your organization’s daily operations.

This process is best leveraged when you are committed to testing different variables. The discipline of testing and measuring is critical to ongoing success. Optimization is not a one-time effort, it’s an ongoing process. And those who understand and apply optimization continuously see dramatically higher returns over time.

In summary, ROI isn’t just a metric. It’s good marketing. And the new recipe for success requires these four ingredients: the results-oriented mindset in your organization, objective-based KPIs, strong understanding of the optimization process and effective use of technology.