What do you think constitutes a marketer’s idea of a dream situation? Is it brand placement and household name recognition? Or is it more along the lines of skillful, creative design and strategic campaigns?
More than likely, the ideal would be a combination of both of these things, and then some.
But there is one important subject on all marketers’ minds that many organizations now realize should be a mutual focus.
Return on Investment. Yes, the R word. This little abbreviation, ROI, has been known to cause its fair share of stress, along with the occasional waves of nausea. Sometimes for good reason.
While ROI can have its challenges, marketing, advertising and their results can also create a unique opportunity for a business to focus on.
What Is ROI And What Is It’s Purpose?
Simply put, return on investment is a numbers game; a percentage or ratio of dollars spent, compared to dollars earned.
Simple enough, right? Well, yes, but the key is to find a way to make every dollar count.
That is the path to putting smiles on all faces involved.
The foundation on which to begin lies in a simple calculation that can be used for every single campaign, whether it be print, broadcast or digital. This will allow you to gauge which vehicle is giving you the greatest return on investment. Measure, monitor and compare. It’s the smart formula.
Gross Profit – Marketing Investment = ROI
It is probably tattooed on every serious marketer’s arm (or should be).
As far as ROI’s purpose, that’s easy. You know that big power yacht you’ve always had your eye on?
Kidding aside, the ultimate goal is the see greater return on every investment dollar, but we need it to not only be sustainable in the short term, but have a future growth, and hold a vision for the long haul.
Continued growth on the investment, campaign after campaign. Now that’s something.
Investment Is Not A Dirty Word
Organizations, large and small, are under constant pressure to show a return and clearly, having your accounting department release that insanely tight grip on funds, is an ever-present challenge.
Sometimes, the tricky part is determining what your actual investment is. Being realistic from the start, in what you deem as both investment and return, can only serve to providing more accuracy in your planning.
You never know, your CFO may even become your best friend.
But be careful, they can smell fear.
One thing that tends to blindside people is that ROI from a marketing viewpoint, shouldn’t be confused with a general business return. Monies tied up investments such as assets and inventory are not the same thing as marketing investment.
Marketing and advertising dollars need to be considered with more vision and a very different mindset.
Consider them as two very different animals, they just happen to hang around the same king of the jungle, profitability.
So what Can We Do For Our ROI?
The beating heart of every successful, and profitable campaign can simply come down to partnering with an equally successful marketing solution provider.
Connecting all aspects of a marketing plan with a company and their proprietary tools, creativity and solutions is an essential approach for today’s business leaders. There’s definitely a need for commitment here, but as a business person, you would already understand that.
Creating for an opportunity to reinvest, or simply for better bottom line results, comes from exploring all marketing vehicles. Your marketing company understands this.
A great marketing company will expose your business to a variety of media, which should include old school marketing. You may think it passé but there is still a place for it, and it’s important to recognize that all mediums bring something to the table.
Partnering doesn’t mean putting all the responsibility in another’s hands. Dropping your goals in someone’s lap is one way to go, but seriously, why wouldn’t you want to be a part of it all?
Interact, own it, and share in the excitement of how your partnership can grow your organization.
At the end of the day advertising effectiveness comes down to capabilities and talent. There are a lot of success stories out there, and you can be one of them.