With an ever-evolving technology landscape, Marketers are adopters and influencers of innovation but are also susceptible to following trends to fit the status quo. However, one item that has been top of mind with savvy marketers for years is measuring, tracking, predicting and understanding return-on-investment or ROI. One main reason for this is because marketing has the largest discretionary budget of any team in a company, yet it’s incredibly hard to quantify exactly how that budget is driving direct impact for the company.
When measured properly, ROI will help evaluate the efficiency of a marketing team. It provides teams with an understanding of which efforts and programs deliver the greatest return, so they know where to cut or invest budget moving forward. Proper ROI assessments can help lay the foundation of a marketing strategy and benchmark of success throughout the year.
The biggest issue many marketers are facing is realizing that all the definitions and explanations about ROI are moot until they understand what their team is trying to accomplish, and how it rolls up to broader business objectives. It’s all good and well to know what ROI is – but in practice, ROI’s definition won’t really do anything until you make it your own.
Think of ROI as a key. What does the key open?
The key to your front door isn’t the same as the key to your car or the key to your neighbor’s house. They’re all unique and shaped differently to fit within the grooves of a specific lock to open it.
How your team measures ROI is your unique key. It is more than a definition or math equation. It’s the specific measurements and factors tailored to your organization’s goals and challenges. There are a plethora of factors taken into account when you try wrapping your head around ROI, and a great place to begin is first understanding what you should measure first.
Will you put a heavier emphasis on tracking the return on your core investments? The best practice is to prioritize the ‘I’ in ROI, but what extent of measurement fits your business? The ‘I’ you need to be measuring could be the financial data that will empower your team. Alternatively, it could come in the form of the Return on Intent – what came back that you can benchmark against the plans and goals you intended to accomplish? Or are you looking to visualize the impact that your team has driven based on the programs you ran this year?
Understanding what metrics your team needs to assess will help you shape your “key” or ROI measurements. Robust ROI assessments are able to unlock a marketing team’s potential to be a true revenue engine for the company. Marketing is a huge source of income for businesses and providing measurable returns on the impact marketing is influencing is crucial.
You need to bring in all factors of your business goals and marketing needs to forge a key that will unlock that revenue engine potential. The right ROI measurements enable you to consider all your channels, content, the skills of your team, the process of collecting data and much more.
You don’t want to have a generic key that won’t unlock the right ROI measurements for your business. The bottom line is that understanding ROI is entirely dependent on your organization. There is no one size fits all format or silver bullet. Take the time to map out your priorities and understand your organization, so you have the confidence to know how to start your revenue engine.
Ready to learn how to better assess what elements should go into your ROI measurements? Download our new eBook on ROI vs. Attribution and get started today!