Marketing ROI is an Ongoing Process
According to some people, marketing ROI is just a case of simple math.
That may be. But it doesn’t mean that marketers are any less stressed about undertaking ROI evaluations – and having the results look pitifully bad.
At its root, marketing ROI is driven by three primary metrics:
- Incremental sales
- The average profit per customer (or profit per sale)
- The cost per sale
Using these metrics, it helps to run various ROI scenarios fairly early in the planning stage. Weighing the marketing outlay relative to the expected financial outcomes helps identify the critical success factors in the campaign plan – and also helps determine what should be measured.
Smart marketers realize that marketing ROI isn’t a cookie-cutter pass/fail measurement wherein any marketing initiative that doesn’t generate a target financial return is deep-sixed.
Instead, it’s an ongoing improvement process that helps discover how changes in targeting and marketing offers can impact purchase decisions.
Approached in this way, ROI evaluation becomes less daunting, and can serve as a basis for program improvements and refinements – not an excuse to finger-point or affix blame.