Measuring Marketing ROI

At this time of year, many people will assess the effectiveness of their marketing plans of the last year.

But sadly, many companies will have no way to do this because they didn’t create quality methods for tracking marketing campaign profit before the launching such efforts. If your company is one of the unfortunate ones that didn’t formulate a way to track all marketing efforts, you’re in good company. This is a common pitfall.

Here are three crucial steps to take to ensure you can measure the effectiveness of your marketing plan.

• If it can’t be measured, don’t do it.

Gone are the days when we could spend thousands (or hundreds of thousands) of dollars on marketing in the name of “branding” with no accountability for the bottom line. Many traditional marketing people still attempt to get away with or use obscure metrics, such as impressions or visits, to measure a campaign’s effectiveness.

This often happens because they simply don’t know any better. Marketing campaigns always can be measured in a way that tracks the return on investment (ROI). The trick is to decide how to track results at campaign conception, so you can put tracking methods in place then. After all, would you invest your money in something without being able to measure the payoff? No, of course not. And the same holds true for your marketing efforts. If there’s no way to determine if your marketing investment will pay off, don’t do it.

Measuring campaigns by using a dedicated phone number for responses, a specific discount button in your point-of-sale system or a code given verbally or via the web for offer redemptions will result in highly trackable results.

• Tailor marketing campaigns to track results.

Tracking marketing campaigns well enough to measure the ROI takes a special brand of innovation and creativity, combined with teamwork. Often, this requires putting offers, creative and operational procedures into place.

For example, have you ever attempted to track ROI from a billboard campaign and found — to your frustration — that this isn’t a common practice? But you can measure ROI from a billboard campaign.

Here’s how. A restaurant, for example, could create an offer, such as $5 off, or a call to action for the billboard. Create a $5 discount button in the restaurant point-of-sale system to track the number of discounts driven by the billboard, measured when its viewers come in and ask for it. Sales revenue associated with the discount can be pulled from the restaurant point-of-sale system associated with the discount, minus costs such as billboard advertising expense and discount expense. Like magic, you’re extracted the ROI from a billboard purchase.

• Measure the return on investment.

Marketing folks often get so caught up in metrics, they forgot to look at the most important component when measuring the effectiveness of a marketing campaign — the return on investment (ROI).

Sometimes that’s a strategic decision by the marketing person. Maybe the campaign’s ROI wasn’t impressive, so the number is buried in a sea of other reports and results numbers to distract from the poor results. Or maybe the marketing team is genuinely so caught up in the reporting details that it forgets to look at the big picture.

Whatever the reason, overlooking the ROI of a marketing campaign isn’t OK. This number always should be stated clearly at the top of the first page of any marketing report, so that the campaign’s profitability can be quickly assessed. After that, details such as response rates, page views, impressions can be discussed to formulate a more detailed picture of why the marketing campaign was a success, or why it wasn’t.

Sarah Procopio, President of Thrive Marketing Science, a business intelligence and driven marketing firm. Sarah specializes in loyalty program development and turning around flailing companies and marketing programs quickly. She can be reached at sprocopio@thrivemarketingscience.com or 949.230.7873. This article was original published in the Denver Business Journal and can be found at https://www.bizjournals.com/bizjournals/how-to/marketing/2012/09/be-sure-to-measure-the-results-of-your.html