Do You Know Your Return on Investment?By joanne | 11th September | Marketing Strategy, Marketing Training
I’m often asked whether marketing is art or science. And I hope it’s a bit of both.
Gone are the days when marketers could simply concentrate on being ‘creative’ and making things look pretty and appealing. Don’t get me wrong – this remains crucial of course, but we need a much broader skill set now. We have to evidence the changes we make in a business and be sure we’re making sound strategic decisions.
And that’s where the science comes in. Testing and measuring approaches and results. Tweaking them to improve returns, and continually optimising budgets. Most Finance Directors won’t deny your request for a new campaign if you can evidence viable net returns for an agreed (lower) expenditure. The issue is that many marketers don’t take the time to do our homework and provide the evidence – or don’t know how to.
So, ask yourself:
- Do you know the difference between gross and net profit?
- Do you know how many leads your last campaign generated?
- Could you tell someone how many of those leads converted?
- And most importantly, what was the net revenue from those leads?
If not, you have more homework to do. Trust me, it will be worth the effort.
If you do know the answers, you’re already something of an expert. So I have another challenge for you:
Could you track things back over 6-12 months from an older campaign and tell me the net revenue over the long-term? Not just the initial orders that were placed, but the long-term value of a piece of marketing? If you can capture that, you can truly monitor the value of every campaign.
There’s nothing better than being able to say to a Department ‘you know that £200,000 order you just received? Well we can trace it right back to this piece of targeted email marketing we did 3 months ago that cost us £500.’ Your peers will realise you know what you’re doing and that there’s some science behind it all. (Of course, if they don’t believe marketing is scientific, they might think you’re a master of the black arts and have you burned at the stake. You have been warned!)