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The 6 Dimensions of a Marketing ROI Culture
BrandSpark’s 2013 Canadian Marketers Survey revealed that improving Marketing ROI is the #1 priority for marketers – a result which has been consistent for eight years running. What makes this such a challenge for many organizations is that improving Marketing ROI isn’t a process to be implemented, but rather a culture to be adopted. And while every culture will have its own unique characteristics, organizations that successfully implement a Marketing ROI culture typically share the following 6 traits:
- 1. BVP-Driven – all marketing investments are guided by a strong brand value proposition (BVP) that has been validated by its consumers.
- 2. Stakeholder alignment – all stakeholders have a clear understanding of marketing objectives and key performance indicators (KPIs).
- 3. Quantifiable objectives – marketing objectives are measureable with quantitative metrics.
- 4. Pre-investment Optimization – marketing spend is optimized before significant investments are made.
- 5. Post-Investment Measurement – a measure of marketing impact after investments are made.
- 6. Continuous Feedback Loop – a constant evaluation of investments for the purpose of optimizing future marketing spend.
An organization’s brand value proposition (BVP) is at the core of its marketing ROI culture – a clear and concise statement of what the a brand stands for, what makes it unique, and what it is trying to achieve. The development of a strong BVP involves a disciplined process to ensure that the brand is targeting a segment that is profitable; the brand is delivering on functional and emotional consumer needs; and that what is being delivered by the brand is relevant to consumers and differentiated from the competition. Think of the BVP as the ”check-in” continually made throughout the marketing journey – ensuring that the investments being made aren’t straying the organization off its intended course.
As the number of people involved in the delivery of marketing initiatives increases, so does the importance of stakeholder – both internal and external – alignment. At the outset of any marketing initiative all parties involved must have a clear understanding of the key objectives, as this will provide the ‘guiding light’ needed to ensure all efforts are contributing to the same end goal. Agency partners and internal team members alike need to know what success looks like and be held accountable for contributing to it.
Measuring the performance of marketing investments can be notoriously tricky – but is worth the effort. Without quantifiable objectives built into the process, it will be difficult to know whether your marketing efforts have been a success. Not only do quantifiable objectives help align stakeholder efforts towards a common goal, but they are critical for continuous improvement. These important metrics must be determined during the planning stage, before significant investments are made.
Organizations with a strong marketing ROI culture apply the old adage “measure twice, cut once” – evaluating the efficacy of their marketing investments before launching them in-market. Take, for example, the development of a campaign to launch a new product. For the purpose of this example, let’s assume that the product has already been validated by consumers and deemed by the organization to have strong demand. Before launching an advertising campaign to communicate the new product, organizations with a marketing ROI mindset will undertake the following steps to ensure that their marketing investment has a higher probability of generating a strong return:
- Test the main message with consumers to ensure it resonates with the target market
- Test the advertising creative execution to ensure it will encourage trial (a quantifiable objective)
- Leverage learning from previous campaigns to optimize their media investment
Post Investment Measurement
While pre-investment optimization will help companies go to market with a higher probability of success, post-investment measurement will provide the insight to fuel future improvements. The only way to measure success is to measure the components that are aimed at achieving it. Whether it is pre-post campaign testing or complex marketing mix analytics directed at identifying the impact on sales, post-investment assessments should be built into marketing plans.
Continuous Feedback Loop
Albert Einstein once said that the definition of insanity is “doing the same thing over and over again and expecting different results.” In order to continue to increase the R in ROI, it is essential for companies to measure the efficacy of their investments on an ongoing basis and take the time to learn from results. Keeping a log of what worked and what didn’t as well answering the question “why” will prove to contribute to a company’s ROI.
Developing the characteristics of marketing ROI cultures will help marketers address the #1 thing that keeps them up at night – delivering strong ROI.