Prior to my career as a marketer I was an accountant. Yes, I was that guy that only looked at the numbers and gave you a hard time about your expense report.
One of my favorite stories from those days was about ROI when dealing with the sales and marketing teams. Budgets are tight; new technologies, techniques or products always seem to come up unexpectedly. The sales and marketing teams somehow never knew the status of their budgets for the year, yet would always need increasing. They would come into my office and pitch me their new idea in hopes of me granting them a larger budget. Sadly, I didn’t care how great the idea was. I had payroll, inventory, taxes and more to worry about then an unplanned and unfunded expense.
How would I deflect this idea? I’d simply ask, “Can you tell me what the ROI would be?” In a flash heads would droop, smiles would vanish and they would slowly walk out of my office. My workday was saved!
Fast-forward 20 years, now the shoe is on the other foot. However, we are showing that there is always an ROI, and it can be proved. Yet many marketers don’t want to know how to handle it. ROI is short for ‘Return On Investment’ we all know that, but it has another meaning: accountability.
You see, back in my accounting days, calculating an ROI for a marketing campaign wasn’t easy if at all possible. Many times it was, “We did this and sales jumped, so the ROI is the difference.” Unless sales that month showed hockey stick growth, it was vague at best. You looked like a hero if you saw dramatic growth, but if you didn’t, there was an unlimited number of logical and semi-logical reasons to follow. One of my favorite excuses was “Think of the decrease in sales if we didn’t execute my campaign idea.”
With digital marketing we can see almost immediately if a campaign is working; we can even test it. Funnels, goals and conversions can be tracked and have deep analysis created around them. Simply create A/B tests to prove particular tactics while executing a larger strategy. Here is the sad part; many deep-rooted traditional marketers don’t trust those numbers. After years of media buying, using data from sample sets like Nelson Ratings, traffic reports and circulation reports they still don’t trust the numbers.
It’s hard for marketers to wrap their heads around the numbers. Using tools like Google Analytics, Webmaster Tools and even Adwords (along with many others) we can really start to get a picture of activity. For most marketers therein lies the issue, proof if their efforts are effective, which forces accountability. Their job is now on the line for everything they do. As with law, ignorance is not an excuse and neither is ROI.
Too often senior marketers don’t know their numbers but they do know they exist. CEO’s know their cash flow, receivables, balance sheet, revenue statements, but don’t know their website traffic or conversion rates (insert digital KPI of your choice). Typically, they know there is an effort from the marketing department, but are unaware of any results. Shouldn’t that be part of the reports a senior marketer shares with the CEO?
As a senior marketer don’t be afraid to create a standard way to measure your digital efforts. Be glad you can be held accountable and use that to your advantage. Think about how you can measure and report on any campaign.
Driving Point: It’s time to stop using ROI as an excuse but more of a mission statement for your marketing department.