Analyzing data is an essential component of virtually every endeavor today, even professional sports. The marketing department of any business is no different. It is possible, and therefore vital if you want to win for your company, to measure your Return on Marketing Investment (ROMI) before you allocate precious marketing dollars to any campaign.
How to Derive a ROMIStart with your data.
Short on data? Many B2B companies are. If this is the case, start with the sales data you have. You know how many sales people you have, you know their territories, and their results. So it is possible to analyze and rank your sales team in terms of their performance. Break down the kind of people they are calling on and rank them in terms of a customer lifetime value, so the sales team can focus their efforts where they have the best potential return. From here, you can start to build the value of your data, while simultaneously creating potentially millions in incremental revenue for your company.
Already completed that process? Consider zip code analytics: examine the geographic locations of your prospects to determine where you will get the best return. You can likely derive at least some rudimentary data from your website: who are the visitors who opened your website x number of times? Visited x number of pages? You can subsequently group those frequent visitors by zip codes, establish the ones that have the highest concentration of prospects. It is far cheaper to do any marketing buy in a zip code than across an entire state.
In both cases, you can develop a ROMI: you have quantified your prospect pool, you can quantify the marketing materials you want and what they will cost, the duration of the campaign and estimate the results based on how many of your highly qualified prospects transform into customers to ensure a return on your marketing investment.
There’s one more major challenge to ensuring your ROMI works: having content and distribution channels that are relevant to those prospects.
Content is King…But Which King Do You Have?“Content is king” is a popular phrase amongst marketers. But it’s important to know which king you have if you want to place a winning bet when it comes to your marketing dollars. When you are seeking to improve your ROMI, the content and distribution channels you select should also be based on data about your prospects, not assumptions.
By way of example, last year we were hired by a large corporation that was targeting millennials to little avail. We examined the content they were using, their brand health tracking data, and analyzed the results. One notable piece of data emerged: millennials take a keen interest in selecting companies that demonstrate corporate social responsibility. Yet millennials rated our client dead last compared to their competition in this category. The client was aghast: they spent millions of dollars supporting various causes each year, they supported community events and causes, but they’d never shared content about their efforts with this demographic. Additionally, their distribution for millennials was exclusively expensive TV buys under the assumption that “millennials don’t read.” We showed them that millennials do read at familiar milestones: media buys in bridal and parenting magazines could get their message across more cheaply than TV. We showed them if they adopted this and improved their image with this demographic by 20%, they could add millions in incremental revenue. They decided to do a major shift and not only increased their bottom line but received an award for their campaign.
ConclusionGetting started is half the battle. The most popular way to go wrong is to dismiss the data you have as incomplete, inaccurate, and therefore worthless and focus on a do-over. Even a little data is better than none, and an inaccurate ROMI is better than no ROMI at all.
Ask your marketing department to start providing a ROMI with their campaign budgets. If they hesitate based on the scarcity of data or because these calculations can be difficult, reassure them you appreciate the accuracy of their ROMI estimates may not be robust initially, but will improve only in the doing, and that an added bonus from these early, awkward calculations will be discovering exactly what data you need to improve it.
It’s fair to say diligent effort to gather and analyze new, insightful data on your prospects is always a three-point shot.
Andy Cohen is a strategic consultant at ProRelevant Marketing Solutions. ProRelevant utilizes MarketSim Agent-based Modeling Marketing Analytics® that drive increased revenue, profit, brand & share. The consumer-centric model uses a brand's true levers of growth to drive better ROMI and keep you ahead of the pack.