We often hear about ROI and marketing success but what does that mean? Is it pure and simple numbers? Is it finding opportunity? Strong integration? Or does it mean making your brand a positive force versus a net negative impact on society?
ROI is seductively simple. But is it what you really want? Marketers beware, this might hurt: Using ROI to gauge impact can severely distort the true value marketing is delivering for your organization. Oh-Oh! Sure, it’s hard to have a marketing conversation these days without hearing ROI-this and ROI-that. It is, after all, one of today’s most beloved business buzz terms. And of course top management wants the “bottom line” on marketing’s contribution to business goals, and ROI is a handy yardstick.
It’s not that the notion of ROI is evil or anything. After all, linking marketing to financial performance is absolutely critical. It’s just that most people who use ROI in a marketing context
We might (and indeed do) talk about marketing “investments” all the time. But marketing expenditures are technically an expense, as opposed to an investment, and that’s an issue here. In finance-speak, marketing costs are a P&L item, not a balance sheet item.
In the video above, Prof. Hanssens discusses how marketing measurement is adapting to a changing world.
As more and more CMOs seek to implement preference management systems — the active collection, maintenance and distribution of unique consumer characteristics, such as product interest, channel preference and frequency of communication — a good deal of the inquiry and effort has focused on risk mitigation and regulatory compliance.
And rightly so. Privacy and consumer protection laws are quickly evolving towards a fully opt-in, permissionbased model. Meanwhile, consumer beliefs and behaviors are shifting even faster. John and Jane Q. Public are selecting (and rewarding) companies who engage them and seek their input. In fact, according to Forrester Research, more than 75 percent of consumers say companies should let them decide how they can be contacted.
With that statistic in mind, I’d like to remind everyone of the enormous ROI and bottom-line revenue benefits of a robust preference management solution. It’s not just a compliance initiative, it’s a thermonuclear sales weapon.
Yes, the proper collection and storage of customer records is essential to lawful marketing. But I’d argue that it is also essential to effective marketing, a term that many in the industry have forgotten as they became accustomed to sub-one percent return rates on emails and snail mail drops.
Here are five simple reasons why preference management is not only good for you but tastes great, too. A robust, sophisticated preference management solution will:
This is the most obvious benefit of preference management but one that is still overlooked. By reducing opt-outs and increasing opt-ins, the overall size of the engaged audience grows… and grows… and grows. Keeping a prospect in the system does more than improve the quarterly stats — it represents an ongoing sales opportunity that can and should be converted for revenue.
Through ongoing collection of preferences, opportunities will emerge that the savvy marketer can proactively leverage to their advantage. For a clothing retailer, understanding gender, product interest and channel of choice could result in a seasonal swimwear promotion via email instead of a one-size-fits-all brochure or catalog. And targeted promotions achieve higher response rates and ROI.
A marketing team that only has access to de-contextualized purchase patterns and customer shipping addresses spends a lot of time assuming, hoping and dreaming. They create campaigns based on assumptions about their target audience, hope that it works and dream of a day when better data will become available. Supplying the team with verifiable preference data changes the game and rescues dollars and hours from speculative efforts.
Efficient preference collection from multiple touch points allows marketers to see meaningful outcomes before it’s too late. When customers and prospects flee the campaign’s primary distribution channel, it could signal a conceptual problem between brand and intended audience. Real-time feedback through preference management creates an opportunity to reassess a campaign before it floods secondary and tertiary channels and does real damage.
Secure in the knowledge that their audience has opted-in and delivered legal consent for communications, marketing professionals can spend more time crafting the right message and less time wondering what channels they can actually leverage under the law. In many ways, an efficient preferen ce management system acts as a catalyzing force for marketers, unleashing them to do what they were originally hired to do.
Make no mistake — risk management has become an important part of the CMO job description and preference management addresses a number of critical challenges. But it’s also the key to lasting customer engagement, real-time responsiveness and almost everything else worth bragging about at a quarterly marketing assessment meeting. Modern marketing is an interaction, not an interruption. Knowing your customers and prospects is essential to respecting their rights while earning their business.
This article is written by www.mypreference.com
Scott Frey is President & CEO of PossibleNOW, a leading provider of customer experience and preference management solutionswww.possiblenow.com
A fast, steady and predictable growth, that is what companies these days want. The fastest growing companies of today use repeatable marketing and sales 2.0 techniques to grow revenue predictably and reliably. They are embracing the shift from the selling process to the buying process, moving marketing from a cost center to a revenue generator. By replacing the old linear sales model with a new holistic approach, companies are redefining the way marketing and sales teams work together.
The new buying landscape has changed marketing’s approach to lead generation and management. This tectonic shift has created a need to improve upon outdated systems that can no longer keep up with the demand to increase lead flow, ensure lead quality, and prove program effectiveness and ROI.
Companies that implement a marketing automation system to support their marketing and sales efforts are better equipped to manage lead flow and process leads more efficiently. A whitepaper by Marketo outlines how marketing automation optimizes marketing programs and can help companies:
Source: Marketo Benchmark on Revenue Performance as of Sept 15, 2012
For maximum impact and return, marketers must go beyond simple segment marketing or click reporting and create a personal dialogue with each visitor.
Behavioral digital analytics can fuel this personalization process by providing specific insights about each segment and individual. This can drive personalized product and content recommendations, as well as individually tailored retargeting for greater marketing ROI
Adobe 2013 Digital Marketing Survey. The survey was published April 26th. Some 53 percent of the digital marketers surveyed from around the world say they devote less than 5 percent of their budget to optimization activities. Last year 48 percent of the marketers said this. Only 6 percent of respondents are allocating more than one-quarter of their budgets to these activities, relatively unchanged from last year’s 7 percent. And that is strange, because through optimization companies can reduce the costs of their marketing operations. By calculating the ROI for the optimization projects it can become apparent that the reason not to, is actually the reason to do it; saving budget.
Adobe conducted this survey amongst 1800 marketers from around the World. “Some of the findings are eye-opening”, says John Cristofano, PR-Manager at Adobe, “like data showing a majority of the companies surveyed spend 5 percent or less of their marketing budget on optimization activities. Five percent or less, even though it’s also clear from the data that companies investing more get more in return. For example, companies allocating more than 25 percent of marketing budgets to optimization are twice as likely to see high conversion rates.”
With these kinds of results, it’s only logical to ask why there are not more companies are investing in optimization. According to the survey there are two major challenges. Budget and resources are the two most important things, that hold marketers back says almost half of the respondents.
Finance departments often criticize marketings inability to present a tangible ROI and use financial measures. It’s a common lament and one we’ve all heard. Rob Stuart, Executive Vice President & Publisher at CFO Publishing, in a recent conversation reminds us that CFOs expect marketers to come prepared to describe what their ROI is going to be for marketing investments. CFOs want to know how marketing is going to measure success, the key performance indicators for a conference and the ROI targets. CFOs are looking at the big picture and the organization’s overall investments.
If we want the CFOs support we need forge a stronger partnership with our finance colleagues. The perception or reality of an antagonistic relationship needs to be replaced with collaboration. And one of the best way to begin to build this relationship is to work from the CFOs comfort zone: data, analytics and metrics.
You may think that you already do. But here’s an example of how easy it is to throw things off kilter. A key source of the friction is derived from using the words with double meanings. For example, consider brand equity. The marketing professional uses the term to describe the health of the brands franchise with its key audiences; the financial professional uses it to characterize the brand as an economic asset. Whatever their differences, marketing and finance professionals need to find common ground.
Women are their own worst critics, says Dove Real Beauty. In this experiment they are asked to describe themself . Other women describe them as well. Conclusion: what you think of yourself is not always the right thing. People are bad in marketing themselves. What lesson can be learned for marketing?
Unlike many C-level executives, Chief Marketing Officers (CMOs) are without commonly accepted strategies and routine performance measures. This may be in part why CMOs so often dont get a seat at the executive table and incur such high churn. So whats a CMO to do? In this
Though frequently at odds, marketing and IT executives agree that harnessing Big Data is imperative to building a customer-centric corporate culture, SAS.
They also agree that a lack of CMO/CIO alignment, rigid silos, unclear responsibilities, and a lack of leadership impede an organization from using Big Data to its full potential, the survey of CMOs and CIOs found.
Big Data is important to achieving a customer-centric culture, according to the study:
Below, additional findings from the CMO Council study, titled Big Data’s Biggest Role, Aligning the CMO & CIO.
Access to in-depth data, and the ability to translate it into insights, is a competitive advantage according to 70% of marketers: 30% say it is critical, and 40% say it is part of the overall picture.
However, most respondents view the flood of incoming data as part obstacle and part opportunity: 61% of CMOs and 60% of CIOs say so, admitting they have a long way to go still in using Big Data properly.
The main challenge, according to 52% of marketers (and 45% of IT professionals), is that functional silos block aggregation of data from across the organization, making it difficult to truly achieve customer-centricity:
Moreover, 39% of CMOs say the corporate culture is not aligned around the needs of customers.
A likely explanation for the lack of total customer focus is that no clear ownership of the customer exists. Among marketing executives, 18% say that ownership rests with the CEO, 17% say the CMO, and 19% say sales. IT professionals assign ownership to the CEO (20%), CMO (19%), and sales (17%).
Organizations that report they have achieved total partnership between CMO and CIO also have clearer ownership of the customer.
In such organizations, marketers (24%) and IT professionals (30%) say the CEO owns the customer. Furthermore, marketers and IT executives in total partnership organizations are highly satisfied with their companys ability to engage the customer (42% of marketers, 31% of IT execs).
