I’ve had so many conversations with marketers about measuring marketing ROI. Usually those conversations are with marketers who are being asked to justify their own existence. “Show us what marketing is doing for us,” the C-suite might say, “so that we can justify continuing to invest.” The expectation, of course, is that there’s a straight line between, say, sending an email to getting a sale. Or a line between posting on Facebook and getting a new lead… which later turns into a sale.
Well, those things do happen, but it’s not all that marketing does. Not by a long shot.
Let me tell you a story.
Back in the day, when I was working in a company that had a sales team led by a particularly inscrutable individual – fellow who played his cards close to the vest, barely participated in the social niceties, and didn’t much believe in acknowledging the hard work of others – well, one day he came into my office and sat down in the chair across from me. He had just gotten back from a sales meeting with a potential new client for the firm. “I just met with Dave, the CIO at Bobbin Company,” he said to me. “He told me that the reason he met with me is that he’s been very impressed with our commitment to educating the market, and he felt like we could be a great fit for his new project.”
I immediately accessed Dave’s lead record in my marketing system – which so happens to have been Genoo, so I could see all of his activity in one screen. I saw that Dave had been receiving our emails and opening our emails for quite some time, but he had never attended a single one of our in-person events nor our webinars. I looked at all of the people we had in our list from Bobbin Company, and none of them had either. A few had opened our emails, and, like Dave, had even clicked through to our blog posts or to our event invitations, but had never done anything else. I shared this info with Sam, the sales leader.
“Well,” he said, “Clearly we’re doing something right. He’s given me his budget and told me that if our proposal fits within it, he’ll give us the project. Nice job, Margaret.” And he headed back to his own office to start working on that proposal.
Aside from that being the best news of the day, it also pointed out one thing, very clearly. While Dave had engaged to some degree with our emails, he’d never really participated in anything with us. But he knew us. He knew what we were doing. He knew our firm. He had built trust and felt like he had a relationship with us before a salesperson ever even called on him. He knew we could do the work, and we would be likely to do it right.
Measure that. Well, okay, we can measure THAT one, but how many others out there took meetings with salespeople because marketing had built trust and a relationship – and marketing never knew it? What’s the marketing ROI of the emails that you sent or the events you held? How can you possibly connect the dots to make a line when you don’t know where the dots are?
What about you?
How many of your perfect potential customers look at the quality of your content, the value you provide to your audience, or simply notice your product or service and the way you discuss it with your market and remember you? Do they tell their friends about you? Do they mention you to their colleagues? Did your name come up at a Chamber of Commerce luncheon in a city that’s five states away from you? Did you get a call out of the blue from someone who is ready to meet or ready to buy, and when you ask them how they heard about you, they just say “I heard about you from a business acquaintance” or something equally vague?
No matter the business you’re in, whether you sell to other businesses or to consumers, the key is building trust and relationship while letting people get to know you. Measuring the impact of marketing is more than a straight line from marketing action to sale.
There’s an art gallery & frame shop a few blocks from my house, locally owned by good people who give their best to their business every day. Their primary method of marketing is posting on Facebook. The other day, they posted a picture of a set of earrings done by one of their gallery artists, along with a lovely story about the artist. My daughter will love those earrings. Presumably they can guess that I saw their Facebook post, because we went in specifically for those earrings and bought them today. But… how many people did I tell about their gallery while talking about this gift I bought for my daughter? Did I post about them on Facebook myself? (I will, but not until AFTER we give the gift, since my daughter watches my Facebook posts. LOL)
Will I help them build their reputation and bring them new customers? I hope so, but the real point is that they will have no way to tie that traffic or those sales back to the Facebook post that caused me to buy those earrings.
See what I mean? How can they know the real marketing ROI of their Facebook marketing efforts?
Based on my experience, for every measurable marketing-attributable sale, there are at least five additional sales that are not easily measured and attributed to marketing. But marketing caused them.
Marketing ROI is more than a sale today
It’s so easy to get misled by marketing hype. The fact is, marketing is a long game. While a promotional email with a sale or a discount may cause a temporary uptick in sales, you’re also training the people on your list that the only thing between you and your competitors is price – and if they don’t like the price, they can wait for the next email. (I’m looking at you, Keurig!) I don’t know about you, but I’m not wild about buying my sales by giving away money. I’d rather build value – and not give away money. Wouldn’t you?
Unless you’re a big giant company who can make up a drop in per-sale profit with sales volume, you want to build value and stop competing on price. And, you guessed it, the line between marketing and a sale becomes far less easy to discern.
One thing has become crystal clear to me. The value of well-done marketing is most easily measured in its absence. I know of one company who had a great marketing person on board, and during her tenure, that company quadrupled in revenues. Then she left. While the company eventually hired a marketing person, then another when that one didn’t work out, then another after that, the last I heard, the company had shrunk back down to the size it was when she started with them. That’s pretty sobering. In that particular case, the marketing ROI became clear – it was millions of dollars per year. That’s right, millions. Per year.
But wait, don’t leave to prove your point…
You don’t have to leave your job to prove that marketing is providing long term value to the business.
Start measuring more than leads, more than direct sales from email clicks, more than the number of MQLs (marketing qualified leads) turned over to sales, more than website traffic. Those, while easily measured, are the tip of the iceberg.
Are overall sales improving? For B2B, do you have new opportunities from new potential clients in the sales pipeline? Are you invited to more events? Asked to participate in more groups? Is your opinion being sought? Is it easier to describe what you do and the difference you (or your organization) makes to your customers? Are your competitors newly-focused on taking you down?
If the answer to any or all of those questions is “yes,” whatever marketing is doing is working. Great marketing is contributing to the health of the entire organization. It’s not a straight line, no, but the marketing ROI is there. You just have to see it.