• 3 Steps to Improved ROI

    Obviously, companies with well-developed marketing return-on-investment (ROI) capabilities are reaping the benefits of more effective marketing, while those without an organized, tactical approach to marketing ROI suffer.  But implementing a rigorous ROI framework remains elusive for most marketing professionals.  The marketing and strategic consulting firm Lenskold Group recently published a white paper, “CMO Guide to Marketing ROI,” that offers insight into how companies can improve performance, profitability and credibility by following these three simple steps:

    1. Manage and assess ROI drivers

    2. Plan and execute high-impact measurements

    3. Use insights to develop and deliver smarter marketing

    The first step relies on strong ROI intelligence gathering using scenario-planning tools that identify key profit drivers, eliminate initiatives with low profit potential, evaluate alternative tactics, understand the interdependencies needed to deliver bottom-line contribution, and quantify the potential performance of new strategies.

    Planning and executing high-impact measurements eschews “feel good” metrics (for example, number of Twitter followers) in favor of measurement success based on clear planning.  This means making thoughtful, well-researched decisions on what to measure, when to measure and how to measure.  The report suggests making marketing more measurable by modifying campaigns to support tests and measures that reveal key drivers and viable alternatives.  Measurements can also be made more actionable by planning measurements with a clear eye toward how insights will be used in making marketing decisions.  Finally, actions are made more profitable when measurements are aligned with ROI scenarios to identify the most critical insights for guiding action toward profit drivers.

    The third step involves learning to translate insights into smarter marketing.  Insights should be pursued for both high impact big wins as well as to execute smaller improvements.  Dedicating a portion of the budget for testing and experimentation can lead to valuable and actionable insights.  Insights derived from measurements should be used to improve performance and build on executive confidence and marketing stakeholders should reach a consensus on insights derived from measurements and agree on next steps.

    One company that has developed strong marketing ROI capabilities is Symantec Corporation, which has embraced a metrics driven approach to enhancing the effectiveness and efficiency of marketing programs.  The company created a measurement hierarchy and organized cross-functional marketing teams that use campaign scorecards to measure key drivers.  Campaign scorecard metrics measure reputation, demand, and execution, which are supplemented by operational reporting designed to note problems, help replicate successes and monitor overall marketing activity.

    The complete white paper is located at http://lenskold.com/content/landing_current_cust.html.

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