I love the old quote by the department store owner about advertising. “I know half of my advertising works, I just don’t know which half.”
That doesn’t have to be the case for you. Forward thinking companies view marketing as an investment in growth. So marketing ROI (return on investment) is strategically important to them. Here are some tips on how to know if marketing dollars are being spent wisely.
Set Objectives & Goals
When was the last time your family vacation involved hopping in the car and pulling out of the driveway with no destination in mind? The answer is never. That’s because you plan your vacation. You select a destination, research the Internet and talk with friends about the exciting trips they’ve taken.
Marketing is the same. Plan your marketing with an eye toward a specific Objective and Goal. In fact, these are two of the most important elements in your strategic marketing plan because they are meant to drive behaviors toward a desired end point. They help build a marketing ROI culture.
With goals established, a team can then determine the mix of marketing tactics and budget that will support the goal.
Marketing isn’t a “set it and forget it” part of your business. Marketing ROI requires detailed attention from the start to the end. However, more important than the monitoring is the knowledge that comes from watching your expenses and results.
There’s a page you can borrow from the quality management playbook. They practice what is known as the Deming Cycle. Here’s how the folks at the American Society for Quality (ASQ) describe it:
- Plan: Identify an opportunity and plan for change.
- Do: Implement the change on a small scale.
- Check: Use data to analyze the results of the change and determine whether it made a difference.
- Act: If the change was successful, implement it on a wider scale and continuously assess your results. If the change did not work, begin the cycle again.
Anecdotes are ok, but real data is better. Don’t be satisfied with anecdotes about whether your marketing tactics are working or not. Dig deeper than that for what’s really going on. For example, if you do radio advertising, survey a segment of your customers on how they heard about your business. For retailers, this can be a one question conversation during customer check out.
And for digital marketing, a survey isn’t required to learn what works. For example, email newsletters are highly measurable. The metrics available on platforms like Constant Contact are extremely useful and actionable. Bounce rate, open rate and click through rate help marketers make content decisions and sales people make business development decisions.