ROI is important to me. Real Important. I love meeting new clients and learning about their businesses. My first thought is always, “how are we going to track growth?” I ask them about who they are, what they do, and what they want to accomplish. We discuss short-term and long-term goals as well as industry challenges and perceived barriers to success. I like to call them pain points. When we know what’s preventing success, the pain points, we can address them to find a solution. We also discuss direct competitors, market advantages, and we identify their current customer base verses their target customer base.
Sometimes an organization is already tracking growth, which I love, because we’re one step closer to measuring success. Establishing measurable goals and tracking them provides the benchmark for growth. When I start a proposal for my clients, before we are in a contractual relationship, I like to establish ROI. Return on investment.
Your benchmark is basically your starting point for a ROI analysis.
The questions begin with the following:
Where are you now? (this is your benchmark)
Where do you want to be in six months, one year, or two years from now? (this is our goal)
How are we going to track growth? (this is our ROI analysis)
So, the answer to my initial question ‘how are we going to track growth?’ is twofold. One…we have to establish measurable goals. Just saying we want to increase sales is not going to cut it. We need to establish a percent increase in line with what you have done in past years with a specific plan outlining how we will get there. If there is no baseline, then we get to calculate some projections. Projections are educated guesses based on what we think the market will do. Sometimes, it starts with an educated guess and that’s okay. Two…we have to track the goals based on the benchmark. The benchmark is what you have sold in the past or what we have projected. Easy enough right?
Return on investment is my goal. It should be yours too. Your agency should provide you with marketing initiatives that meet (and hopefully exceed) your goals. Proving ROI is your key to strategic growth.
Once that is established we can evaluate marketing initiatives to determine which are working and which are not. Enter my boss’s love for excel spreadsheets. Lauren has loved spreadsheets for as long as I’ve known her (and, that’s over ten years)…seriously, when you meet her ask about it. Lol! As part of an ROI process you have to look at monthly comprehensive reporting. Someone had to be behind the scenes crunching numbers and analyzing movement (traffic increases, dollars spent, growth metrics) directly correlated to your goals to determine performance. These reports, when put into practice, are usually eye opening to say the least.
By tracking ROI you are able to make strategic decisions on how to spend your marketing dollars to achieve the best results with the least spend. Once you have good data you can work on improving margins, eliminating your least profitable products or services, identifying opportunities for new revenue streams, the list of possibilities goes on and on.
Return on investment is crucial in the world of marketing. It provides the compass to future goals and indicates progress on present goals. Without it, you are just treading water. ROI is the driver to creating a goal, exceeding the goal and then creating new goals. Track, report, set goals, repeat.