Marketing ROI: still not getting it
By: Jerry Rackley
I highly recommend the recently published 2013 State of Inbound Marketing Annual Report. The survey used to compile the report asked, “What are your company’s top marketing challenges?” The most frequently provided answer to this question was “Proving ROI”.
Proving ROI has been a thorn in the flesh of many marketers for a long time. I discussed this issue last year in a blog post, “O Marketing ROI, Where Art Thou?” This is not a challenge we’re going to outrun, and ROI is not a fad that is here today and gone tomorrow, so waiting it out is a bad strategy. More honest discussion is needed about ROI, but in the end, we marketers can’t simply be all talk and no action on this issue.
In the spirit of true debate, let’s look at both sides. I appreciate what Ross Graber wrote in the SiriusDecisions blog about this debate in a post titled, “Marketing Measurement Snake Oil”. In this post, he acknowledges the obsession to assess a financial return for each and every marketing tactic, and correctly calls this notion out as ridiculous. I completely agree with him when he states that some B2B buying processes are quite complex, involving lots of players and moving parts, the nuances of which we cannot fully or accurately account for in the ROI calculation. Amen brother!
Still, we can’t hide behind the screen of “what we do is too complex to measure”. Quite simply, if what we do as marketers is having an impact, then its measurable, somehow or some way. Likewise, if it’s not having an impact, then why are we doing whatever it is? We cannot parade around like the emperor in new clothes, claiming to cloth ourselves in results when none are there, at least none we can measure.
The solution is simple, but not easy. It’s simple in terms of understanding what needs to happen. We’ve got to put some meaningful measurements in place, not just metrics that represent things we can measure. It’s not easy, however, because what needs measuring is often hard to define, agree to or get support for. We may not have the systems in place to make accurate measurements. Or, the most difficult challenge of all, the culture of the place we work may not support efforts to measure, track and report.
What are some practical things an organization can do in the pursuit of proving marketing ROI? Here’s my list:
- Start with objectives. Don’t measure a thing until you understand what counts. Ideally, you measure objectives, and marketing’s objectives are derived from corporate objectives. Until you have a very clear picture of corporate and then marketing’s objectives, forget about the measurement piece.
- With a firm grasp of your objectives, develop a plan to achieve them. Does this sound like the classic, marketing planning process? Yes, but I’m discovering how little of it takes place. If we’re honest, many of us shortcut this process, because we think we know it so well, or for the opposite reason – we never really learned it at all. Either way, the cliché “failing to plan is planning to fail” certainly holds true. As you craft any marketing strategy, product marketing plan or marketing communications plan, you have the best opportunity to identify measurement opportunities and build them into the process.
- Put the right systems and tools in place. At the top of the list is Marketing Automation. Without it, you’re going to have a more difficultly providing credible information about how your marketing process is working. If you’re a Demand Metric member, use the resources we provide you: there are 15 different calculators in our library of tools, eight of them specific to ROI. In addition, we provide you with 27 dashboards you can use to help track and report your metrics.
I think the greatest irony in this discussion of marketing ROI is that most marketing teams are delivering it – they just can’t prove it. Sometimes, we’re our own worst enemies in this regard. We know intuitively that we’re providing real value to the organization. Many of our peers in the organization probably sense this as well. But that doesn’t matter if we’re unable to communicate about it effectively. So in the end, our problem is not just a metrics calculation matter, but also a communications issue. And we must remember that the things we like to talk about and measure – brand equity, awareness, shares, page views, etc. – are often not part of the CEO’s vocabulary. Instead, the CEO speaks in terms of revenue, profit and things with a direct link to the bottom line. If we’re not able to show the connection between what we’re doing and measurements the CEO cares about, it’s best to keep that résumé current.
