In the current economy, everyone wants to know, “What am I getting for my dollar?” The advent of the internet and other new technology are creating a world of new marketing opportunities and ways of conducting business practices that lend themselves to an undefined return on investment (ROI.) Currently, each business defines its own definition of ROI, as no established process exists. The unknown sometimes lends itself to fear, resentment, and distrust of unmet expectations. How do you manage expectations when a standard form of measurement does not exist, and culture is conditioned to follow a course of standard measurement?
The best part of undefined rules is that you get to customize the rules to your own goals, comfort level, and strategy. Don’t be afraid to use new technology or new marketing practices because no concrete ROI exists, as now is the opportunity for you to capitalize against those who are hesitant to create change. Just be sure that everything makes sense within your overall goals and strategy. Many people ask, “Should I use Twitter?” but what people really need to ask themselves is, “How will Twitter increase business?” Here are some steps that will help you focus on how to use ROI as a tool to your advantage:
Step 1: Track your customer behavioral patterns (both positive and negative.)
Track and respond to your customers’ positive and negative reactions; soon you will see a pattern. As in any relationship, you react to social cues, so why should the relationship with your customers be any different? Eventually, you can develop stronger ROI, make wiser spending decisions, and know when to trigger critical marketing efforts with the use of observed consumer patterns.
Step 2: Identify your ROI comfort levels.
Establish what your comfort level is for optimal ROI. For instance, if you plan to spend $1,000 on a postcard awareness campaign and you expect a profit of $5,000 from the campaign, but you only get a return of $500, you have a problem.
Step 3: Define your realistic ROI goals, timeframe, and measurement techniques.
The key to this entire process is the dreadful word “time.” The ROI process can be quite involved. Use ROI as a tool to capitalize on observed consumer patterns, not as a “be all, end all.” Used properly, ROI will help your marketing efforts in the long run. Initially, you will have to use your best judgement about the experts’ suggestions against your competitors’ activities. Isolate variables as best as you can to get a clear picture.
Step 4: Set your budget against your ROI goals.
Decide what resources of human capital and monetary assets will be dedicated to the observation of ROI. Good measurement of ROI takes money, people, and time.
Step 5: Communicate clear responsibilities and accountability.
Establish expectations. Make sure that everyone understands your comfort level, ROI expectations, goals, and method. You cannot receive clear reports unless all parties understand their responsibilities and direction.
Step 6: Activate marketing program.
Let the plan roll.
Step 7: Measure, adjust ROI strategy, measure again.
Be prepared to adjust ROI strategy to accommodate the affect of external and internal circumstances. Has the government enacted a law that affects the variables? Are there strange weather patterns? Does a different variable exist for better measurement?
If used properly, ROI is an outstanding tool, as it gives you the opportunity to see efficiency and effectiveness within your strategic goals. However, don’t let ROI hold you back. Use your arsenal of tools, techniques, and strategies to get the best customers for your business.Read More