4 Principles that help you improve your marketing ROI
Continually improving efficiency is essential to ensure that marketing activities deliver the desired outcomes in the most cost effective way. As a starting point, here are 4 principles to help you think about the ways you could improve the returns on your marketing.
Consider Alternative Scenarios – Running ROI scenarios in the planning stage to quantify your expected outcomes; these will guide your decisions to improve the profit potential. For example, you could say if we spend 20% of the budget on PPC, 50% on exhibitions, 20% on press advertising and 10% on PR, what do we expect the incremental sales from this activity to be? Then look at an alternative mix which could deliver a different level of incremental sales. This information will be beneficial for building a case for different strategies or spending levels.
Combine a Channel and Campaign Approach – You should devise measurements and analytics that provide you with a clear view on the financial impact of your marketing activity. Your plan should include a mix of basic high level tracking and more detailed analysis which drills down to specifics within and across the marketing mix. For example, looking at how much PPC contributes to the increased conversions is key to understanding the value of the channel, but you also need to understand which elements of that activity deliver different types of conversions, such as online, telephone, mail orders and how the value of each conversion delivers against the marketing investment. To assign a true value, having the right tools to measure is essential, for example call tracking to ensure you capture post visit information, such as someone who has called on a unique number from a website session that has ended.
Assess All Touchpoints & Customer Lifetime Value – There are many touch points your customer will come into contact with before they decide to purchase your product or service, so it is important that your measurements for any specific marketing initiative assesses their additional contribution to sales. You can use market testing, analytics, and hypotheses to isolate a tactic’s contribution within the overall marketing mix. Marketing initiatives that contribute to progression in your customer’s funnel must be linked to sales conversions. You also need to be mindful that sales conversions should take account of total additional customer value, including repeat purchase, retention and growth from higher value segments. It will take time and effort for you to establish the measurements necessary to fully address the contribution of marketing but each step in the process provides valuable insight. Utilising tools which report on attribution assist this evaluation, such as a conversion attribution report; available with call tracking.
Try New Initiatives – You will see improvements in ROI by measuring your marketing effectiveness and acting on that information in the next phase of marketing. You will also see faster improvements in ROI when measurements are designed to not only provide insight on your current marketing initiatives, but also on alternatives that are run concurrently. This can include variations in the marketing mix, analysing performance of different target segments, introducing new tactics or testing new offers. Allocate a small portion of your total budget for new initiatives and it will help fine tune your strategy to provide greater improvements performance.