Is Your Marketing ROI Negative?

ROI-blurWe sometimes struggle with calculating the Return on Investment (ROI) on our marketing campaigns.  But why is this? Is it too much work?  Is it technically impossible?  Are we scared in what it may tell us?  Let’s first get our heads out of the sand.

I have sat in and been part of marketing meetings that have justified campaign expenditures, without attribution to a measurable ROI, because they believe it contributes to the corporate brand (Ouch). Maybe the excuse used is that it is technically not feasible.  Can we agree that the days of poor excuses are over?  If you are NOT measuring the ROI of your marketing campaigns, your actual ROI could be negative!

What is a negative Marketing ROI?

If you are targeting prospects with untimely information and misguided offers, you may lose that prospect for good.  A lost sale, one that now has no chance of closing,  impacts your campaign ROI, and the result is negative. 

Before we continue we need to agree to the following:

  1. We need to stop justifying a ROI measured campaign by stating it supports long-term branding.
  2. We need to stop justifying the difficulty of measuring ROI by saying it’s not technically feasible.

So how does marketing contribute to a negative ROI?  Here are four examples of marketing campaigns that you might think are filling the pipeline, but in reality you are losing leads by upsetting your prospect:

  1. Sending one email offer to a batched list without understanding the prospects’ need. Result: Your company email gets moved to their spam folder.
  2. At a trade show, you scan every badge within 5 feet of your booth and send these leads to sales for follow-up. Result: That prospect and the salesperson have a frustrating first call…and Sales starts blaming Marketing.
  3. Direct mailing without proper segmentation will result in your mailer thrown in the trash. And sifting lists by zip code or title is NOT segmentation…please!   Result: Any future engagements by email, sales call, etc. may already have soured the relationship.
  4. Social media posts that are unrelated to the prospects and needs. Result: These posts only further support the prospect’s low opinion of you and your company.

These lost leads might otherwise become eventual buyers.  So why spend money and resources needlessly? Find out what your leads need and when they need it. Then offer them a solution to their problem at the ideal time. If you take the time to do this, you will soon reap the benefits of your marketing dollars. And your customers will reap the benefits of your company’s product or service.

To calculate the ROI of a campaign, you need a way to track the source of your sales.  There are many lead automation marketing software and CRM systems that can be integrated to do all of this for you.  Otherwise, you can come up with your own. Create a custom landing page on your website, a special email address for contacting, or even a traceable code – these will help you calculate a ROI.  As you get better, you will continue to fine-tune what works, and ultimately know that your marketing dollars are well spent.

Bottom Line

For your next campaign, by making it mandatory to measure a ROI, there are things you will discover – some of your traditional outbound campaigns ARE NOT working – but that’s a good thing. We call that discovery, and it’s the first step to making a marketing impact with new changes for your company.

About Michael Senger

Michael Senger is an energetic, results-oriented Senior Marketing Professional with almost 15 years experience in strategic online marketing. Before joining Hidden Peak Interactive, Michael successfully led the launch of StoneMass, a web marketing agency. Michael also spent 8 years at Symantec, directing their Global Online Marketing initiatives leading a diverse global team of matrixed team leaders and digital/online agencies leading to successful global results.

Michael has a MBA in Marketing Information Technology from the University of British Columbia in Canada.

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