Marketing ROI on Steroids
Pie-in-the-sky fantasy or unfair advantage?
Most companies now recognize the importance of Marketing ROI. Indeed, marketers are under increasing pressure to show a positive and tangible return on their activities and investments. But is the decades-old definition of Marketing ROI sufficient for today’s complex business environment? Or is it time to take things to the next level by using advanced analytics to improve the performance of your marketing mix?
Here’s the debate:
|Times have changed.
New channels such as social media, blogs and e-commerce are having a huge impact on how customers view a company’s products, services and brand. Marketing ROI needs to actively address every marketing channel – even word of mouth.
|Companies aren’t ready.
Many are still struggling to implement the basics of Marketing ROI. Trying to apply advanced analytics to every marketing channel is too big a leap.
|Marketing ROI can steer the business forward.
Marketing ROI has traditionally been backward-looking, but now has the power to be predictive. It should be integrated with the strategic planning process to help guide the business into the future. Also, simulation should be used to drive business decisions on marketing allocations and tactics.
|If it ain’t broke, don’t fix it.
Many companies are operating and growing just fine the way they are. Why change? Plus, there are so many competing recommendations from ivory-tower PhDs and other so-called experts that it’s hard to know which path to follow.
|Marketing ROI can make a business more agile.
Closed-loop marketing campaigns can be adjusted on-the-fly based on real-time results and feedback. Marketers can quickly determine what’s working and where to invest their next dollar. They can also engage in more relevant dialogs with customers.
|Data analysis chokes innovation.
A data-driven approach tends to focus on things that are already being done and might ‘optimize out’ important tactics that are just emerging.
|CEOs and CFOs want to see hard numbers.
Yet many are skeptical about the performance reports that come out of Marketing. CMOs and CFOs must work together to make Marketing ROI robust and credible, with measurable links between marketing investments and business results.
|Companies can’t afford it.
Taking Marketing ROI to the next level sounds appealing – but it also sounds complicated and expensive.
Deloitte Consulting LLP
Deloitte Consulting LLP
Deloitte Consulting LLP
Companies that want to stay competitive in today’s complex, fast-paced business environment can’t afford to sit still. Turning Marketing ROI into a true Marketing Effectiveness competency may help a company get more value from its marketing activities and investments. It can also help the business operate more effectively and respond more quickly to changes in the marketplace. And the best part is it doesn’t have to be prohibitively expensive or time-consuming to implement. Organizations can start small and then expand their efforts as they gain experience and start to see tangible results.
Here are some practical lessons we’ve learned from helping leading companies around the world take their Marketing ROI to the next level.
- Lead from the top. Marketing ROI requires people to change their mindset and behavior. This kind of fundamental transformation can only happen if the CEO and other key executives clearly support it.
- Build a cross-functional team. Designing and implementing a new, expanded vision for Marketing ROI requires strong players from a broad range of functions, including sales, marketing, finance and IT.
- Be cautious about canned solutions and recommendations. The downfall of many MROI studies and tools is that the people behind them might not always understand the dynamics of your business, which can lead to results that are misleading or non-actionable. Marketing is about human behavior. Be sure your partners understand the human dynamic of your business and build their models with that in mind. Also, be wary of software packages that only require you to plug in a few variables; these over-simplified solutions only scratch the surface of what Marketing ROI can do.
- Focus extra attention on new channels. Social media and other new channels are literally transforming how products and services are marketed -- and their impact is only increasing. A solution that limits its focus to traditional channels is obsolete from the get-go.
- Beware the tyranny of the numbers. Don’t let Marketing ROI choke the innovation and brilliance out of your marketing team and agency partners. A tool should never make decisions for you. Great marketing is about innovation. Use Marketing ROI to simulate the known, but be sure to budget for the new and unknown. Once you’ve tested the new innovations, you can then add them to your models.
When all is said and done, there really isn’t much to debate about Marketing ROI. Companies that want to get more value from their marketing activities and investments need to use advanced analytics to actively manage their entire portfolio of marketing tactics. And they need to start now.
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