6 Steps to 6 Steps to improved ROMIimproved ROMI

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Marketing ROI is one of top strategies

• The top four ranked ‘back-to-basics strategies’• Each increased from four to 12 percentage

over prior year Source: Economy Weighs Heavily on Marketing Execs for 2009 Study: Top-Level Marketers Focused on Back-to-Basics Strategy, Struggling With Digital Concepts by Beth Snyder Bulik, Advertising Age Jan 8, 2009. Emphasis added.

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6 Steps to improved ROMI

Improving your Return on Marketing Investment can be achieved, but requires focus on 6 steps:

1. Get your marketing costs accounted for2. Understand your consumer3. Track results4. Choose your analytics5. Question your results but then act6. Look for areas of improvement and then iterate

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Step 1: Get your marketing costs accounted for

• Determine what you are spending on each marketing activity and consumer touchpoint

• Track costs and assign direct and indirect costs to each campaign. Don’t forget to include costs of personal selling, customer support

• Track expenses by creative concept• Compare actual execution to planned purchases• If you can get your marketing on a single spreadsheet

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Step 2: Understand your consumer• Purchase decisions including product and channel choice• Process media information. Don’t forget in-store media as

well as social media. Include how consumers turn awareness and consideration into purchase intent and brand equity

• Consume your product• Make sure you are measuring the right things, not just the

easy things• For B2B marketers it’s very easy to measure the sales cycle,

but it’s much more important to measure the purchase cycle.

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Step 3: Track results• Marketing results take place at two levels. Interim results, such as web

visits, engagement, leads developed, brand awareness and consideration as well as units and dollar value (or other currencies) sold at point of sale. Interim results should mirror how consumers act in the marketplace and should not be a reflection of your internal organization. If you track results with the consumer at the central focus of your metrics you will be much more successful than if your metrics only reflect your own organization.

• For point of sale data in many industries, this means purchasing syndicated data, such as Nielsen, IRI or others. Put these data into a time series, so that you can see how your activities drive incremental changes in the ‘results’ at some point in the future.

• Don’t forget to include your competitors’ actions, their pricing, channel, advertising and product activities (the 4Ps).

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Step 4: Choose your analytics• Step 4) Choose your analytical method. Depending

on your environment and the availability of data determine the kinds of analytical tools to use to start connecting the dots between marketing inputs and outputs. Statistical modeling is certainly one approach to develop a robust marketing mix model. Others can include split cell testing or agent based modeling. Even tracking the direct response from your marketing activities can lead to some great insights.

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Step 5: Question your results but then act

• Step 5) Question your results but then act on them. Make certain they truly represent how your consumers responded to your marketing controlling for consumer trends, exogenous factors, competitive actions and channel changes. If you’ve done your homework right, your results will be robust and you will be able to make significantly better decisions. If you’re still not comfortable, start with an in-market test or other research to revalidate your conclusions.

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Step 6: Look for areas of improvement and then iterate

• Step 6) Look for areas of improvement. Once you start to make better decisions you will realize the value of improved data sources. It will make sense to invest further into more detailed information in order to make better and better decisions. Your risk will be lowered and your forecasts will be more accurate. The rest of the company will finally understand the value of marketing.

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A sampling of what you can achieve Quick Serve Restaurant

– 8% projected revenue increase (~$25M) – with no increase in marketing investment

Major Software Provider– Identified the 50% of the marketing budget being wasted

Consumer Package Goods– Product launch marketing mix mismatch cost 2% market share (worth

a 40% increase in revenue)

Where else can you get that type of return on any other marketing investment?

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For more information…Guy R. Powell – gpowell@DemandROMI.comBook: Marketing-Calculator.comBlog: MarketingTactegy.com

DemandROMIProve and improve your marketing effectiveness

404-816-4344www.DemandROMI.com