Monday, December 23, 2013

Marketing ROI – Feasible to Measure?

When reading this article about measuring marketing expenses versus its outcome and (hopefully) profits, you will quickly understand that ROI is not the best way to measure marketing performance. You will also need to accept that questions such as "was my marketing campaign worth the investment?" and "can I measure and verify profit from a marketing campaign?" might remain unanswered.

Image courtesy of marketoonstudios

The reason is simple: there is no correct answer to these questions and moreover, it depends on several factors:
* The kind of marketing campaign used (e.g. using coupon redemptions, publishing a white paper on the companies Facebook page, advertisement on television)
* Is it is a "one-time" campaign or "long-term" running campaign stretched out over several months
* Are you able to accurately measure the cost of marketing your product and through which marketing campaign your customer buys your product.

In order to know if you can validate the success of your campaign, let me give you some basic information about ROI and how it works.

Return on Investment is a financial term and has an authentic financial formula:  Income Earned - Expenses / Expenses. This simple formula is tricky to apply since there are many components involved. Defining revenue made from marketing efforts requires the correct usage of Customer Relationship Management (CRM). Through CRM, marketing methods which resulted in a sale, as well as the revenue made from it, can be tracked.

This is not always easy - Let's look at a few samples:
Coupon redemptions. One of Isracard's marketing campaigns encouraged buyers to spend above a certain amount at Ikea. Receiving the redemption coupon required the downloading of a coupon code through Isracard's App. This is a classic example of being able to calculate the investment versus revenue made as the expense of the campaign (television commercial, newspaper ad) is deducted from the income earned (how many products did Ikea sell and at what price) and divided through its overall expenses.

Measuring Online marketing campaigns is not an easy task. When launching a campaign on Social Media Groups, it makes expenses much more difficult to measure. A commonly forgotten expense but a very high one is time. Many times overlooked, dealing with the Social Media is very time consuming.
If you use Online advertising and your goal for example is to drive more traffic to your website than Google Analytics can provide you answers. If this is not your goal, than calculating if the campaign was worth it, becomes almost an impossible task.

Offline  marketing campaigns are probably the most difficult to measure as it requires surveying and statistical sampling in order to accurately evaluate why your customer bought your product.
Having given these samples, another issue when calculation ROI is the expected life-cycle of your product (seasonal versus product running for several years) and how much time you expect it will take to make a sale. Sometimes, it can take months or even years for a product to be developed, marketed and even sold. Trying to calculating this in your ROI is an impossible task!

Trying to calculate your Marketing ROI is important but very difficult. It requires great precision and precise tracking methods in order to capture even moderately good quality data.

Good luck.

Saturday, December 7, 2013

3 MUST-DO Tips for Marketing & Sales Professionals

From experience I can tell that companies not always understand, or do not wish to understand, the cohesive bond and close relationship marketing and sales departments have (or need to have) in order to conduct a profitable business!
Company size doesn't matter, since the foundation and structure for selling products is always the same; the goal is to close a deal!
As marketing juggles its magic box of tricks, the horse is brought to the water; sales will then convince the horse that it is in its best interest to drink.
Image courtesy of: Bob Moran

So, how is this done?
Though there are many more guidelines than the ones listed below, the most important ones are:

1. Set periodic cross department meetings between marketing and sales.
Determine through market research the sales goals and recognize the target audience.
   • Schedule follow-up meetings in order to examine the outcome of the completed actions.
   • Take the time to evaluate what has been done, its effectiveness, and if it reached the target audience.

2. Initiate and evaluate customer surveys (in many companies this is even standard practice as part of their ISO standards and Quality Assurance policy). This is a respectable way for  customers to express feedback on the service received.
In general, companies feel somewhat offensive when negative feedback is received, but it should be embraced!
   • Only customers who care for your company/product will take the time to fill in the survey and submit negative feedback. They are your best customers!
   • Negative feedback should be seen as a challenge to improve your service.
   • Last but not least: this is your opportunity to "WOW" your customers. Take immediate action and amaze your customers by not only making up for the bad service they reported upon, but also to give them something unexpected, something remarkable!
A must: Always thank the customer who took the time to fill in the survey and reassure him/her that the remarks are evaluated and will be considered in changing the company's policy.

3.Schedule meetings with customers. Listen to their needs, let them do the talking. Ask their opinion about a campaign carried out by you, what attracted their attention, their expectations from you, and so on.
Make sure to afterwards recap all accumulated information and share it during your internal cross-departmental meetings.

Good luck!

To read additional blog posts for more tricks and tips, please click here.