Comments on: Planning for 2010? Don’t Forget To Include Measurement & ROI!

By: Winston "Dub" Riley

Winston "Dub" Riley — Wed, 03 Feb 2010 23:19:03 +0000

Hi Beth. Even though thePuxatony Phil has already appeared and the Oscar nominees are announced, I pulled out this article and dusted it off (amazing how soon we’ll call something dusty now?!).

Actually, this is a good time to be looking at this thinking. We’re all feeling the pressure that this year may be harder than last year. Tools and positioning is even more critical as things continue to be ratcheted down further.

Thanks for laying out something that almost anyone can “tweek” and be ready for a meeting. You help take a lot of the pressure of our jobs away. We just need to crack open Marketing Profs, scroll down to old faithful Beth Harte and click. Voila!

By: Beth Harte

Beth Harte — Fri, 15 Jan 2010 15:55:36 +0000

Edw3rd, you are entirely right. I was trying to give basic information to at least get marketers headed in the right direction when it comes to planning and measurement… But you pointed out one of the biggest challenges – A CRM system! There has to be a backend system to capture all of this data. And if markters are using a system to capture responses, clicks, etc. well…

David Meerman Scott just went on a rant about ROI — No one is measuring or capturing. I think he’s probably right… Do you know what that billboard produced? What about those ads?

The measurement/ROI discussion is far from over… But like Shel Holtz recently blogged, “If you do your job right, nobody will ask about social media ROI.” I think the same probably is true of marketing, PR, etc.

By: @Edw3rd

@Edw3rd — Tue, 12 Jan 2010 22:54:17 +0000

A major challenge faced by many marketers is isolating the sales units attributable to marketing campaign contacts. The true ROI on an investment is the INCREMENTAL sales due to the investment. In organizations with a sales force or where a contact pre-exists in a crm system, it is difficult at best for the marketing team to cite a return. Most Sales and Channel teams are financially compensated for their efforts and don’t like to share credit.
I would also caution anyone against measuring versus pure revenue. Measure the Return against Operating or Gross Profits of the specific products/services being sold. The goal is Profit Contribution.
And, if you want to be a friend of the CFO, showing ROI as a melded cost average might not have much impact. Try instead, to show comparisons between the various tactics you deployed, and discuss what items can be scaled up, split-tested, toned-down, or otherwise improved so that it is clear you have your hands on the wheel and can manage for growth. If you’ve got a statistics guru, have them look for interactions between variables. Having one number simply means you have an overall benchmark – and one not easily understood. Showing how you can/will improve it is important in judging the ROI on YOU to a BoD.
For anyone looking for textbook examples, search out Don Schultz who provides excellent samples of direct and integrated marketing measurements.

By: Frank Klesitz

Frank Klesitz — Mon, 28 Dec 2009 05:10:26 +0000

Great article – I sent it to all our clients this evening for their 2010 marketing plans we’re working on this week. I made a worksheet based on this post that you can use for your clients as well, just send me an email if you’d like the Word document without my sales copy.
http://www.docstoc.com/docs/20581696/Social-Media-is-NOT-Free—A-Simple-Worksheet-to-Track-Your-ROI

By: Promotional Products

Promotional Products — Sun, 27 Dec 2009 22:23:42 +0000

Beth,
I appreciate your post. As we head for a new year, I think it is important that we approach it with a much more rounded sense, so as to increase our ROI. Thank you, Keep up the good work

By: Beth Harte

Beth Harte — Wed, 23 Dec 2009 17:05:45 +0000

Kevin, yep you’re right… The ROI calculation used SHOULD be the one the CFO wants.
I went basic, maybe TOOO basic just to show the calculation and to get people at least thinking financially. It’s better than nothing in some cases… But, that’s just one gal’s opinion.
Happy New Year to you too!

By: Kevin Horne

Kevin Horne — Wed, 23 Dec 2009 16:06:48 +0000

Wow Beth – excellent detail and layout. Not to quibble, but readers should be sure to understand the thing you called a “detailed” ROI calculation is the only one a CFO is going to accept.
Since every sale comes with operating costs that are owed to someone (e.g., suppliers, employees) those costs HAVE to be deducted. There is no simple ROI that is done purely on sales/revenues.
Final nitpick – doing it on operating margin is sufficient since the net margin (net profit) requires knowing what the company’s tax rate is going to be for the year,,,which the CFO doesn’t even know!
Anyway, great post about a hot topic that just can’t get enough attention. Happy New Year!