Marketing ROI is a tricky metric
In essence the concept is sound and very useful for reporting.
One could define the concept as such: For the money I spend on marketing, how much turnover does that bring the business. [Marketing Return on Investment: MROI]
The trickiness comes in these two questions:
- In defining what’s included in “the money I spent”… does that include my marketing budget AND the marketing department’s salaries or not?
- In attributing marketing spend to sales generated though marketing spend (and the grey area when everyone does their bit). Does one use all turnover?
This post is not intended to answer these two questions. (But they’re included as back story to highlight a possible pit-fall you might encounter when aiming to get more marketing ROI from an agency for a B2B company in South Africa)
If you’re accustomed to ROI and have the goals and thinking in place then skip over to “fix that ROI”
Step 1: Define Marketing ROI…
Write down your definition and how its calculated. Include your company’s view on the two questions above. (Spend & Attribution)
Step 2: Calculate the baseline…
Write down what your ROI is now so that you can have something to refer back to
Step 3: Set goals
Step 4: measure actual vs goals and set regular review intervals
Just the consciousness that you’re measuring marketing ROI will make your agency pay attention to it. Which will intrinsically lead to improvement in ROI
Step 5: Assess if there is improvement
Is it sufficient to attain your goal?
There is a good chance that they won’t be improving ROI and that they are not sure how to…
To fix that ROI:
The way the maths works you can always cut nonvalue adding work, by reducing what you spend with them without impacting results will mean that ROI can improve. But it’s difficult and is limited in terms of how much it can improve ROI without reducing results.
Typical areas where agencies can improve are broadly grouped into the following areas:
- Activity – are they doing enough work. Get them to write more blog posts
- Technique – are the blog posts interesting, useful to the persona and on strategy… look at improving the quality of the posts
- Reporting – do they divide their visitor reports by persona? Does each blog post need to convert and do they track the conversion ability of each blog post?
- Feeling – Is the work they’re doing making you feel like you’re excited to be a marketer in this day and age? The soft stuff matters. Are they missing the point? Can you stand up to your ExCo and say that you’re excited about what you’re doing?
By looking at these broad areas you will be able to identify areas for the agency to improve and hence increase your marketing ROI, without just squeezing them on price.
Want to go deeper?