Making the Most of Marketing: Rock-Solid ROI
By Sandra Zoratti and Lee Gallagher
The pressure is on. Marketers must do more with less and increase performance over time. More importantly, the need for proven measurement of performance and success through Return on Marketing Investments (ROMI) has never been more crucial. As the speed of marketing increases with digital and social media efforts, performance benchmarking on a regular basis has become a top priority for executive boards, many of which now expect quarterly or even monthly updates on ROMI. This shift is also compounded by the increasing importance of carefully aligning marketing to the most important and measurable goals of the business. In answer to this need, ROMI is a powerful vehicle to translate the language of marketing into the language of business – especially now that the marketing landscape has shifted so significantly and, we would say, irreversibly.
‘Know Me or No Me’
While the Internet certainly isn’t new, its impact on marketing continues to expand and evolve. As a platform and capability, the Internet has significantly transformed marketing and will continue to do so. New online marketing channels are developing at lightning speed – initially with e-mail, then blogs and now social media. These new avenues of customer interaction are easy channels for utilizing mass communication as they offer a seemingly low-cost tactic for marketers in need of immediate delivery, scale and response. As a result, online messages have become noise as they are generic, frequent and mass-produced. Most research cites that consumers are exposed to more than 3,000 messages a day and the bulk of that messaging is “cookie-cutter” messaging that is irrelevant, un-engaging and overwhelming, and that it is driving consumers to take negative action. Consumers are shutting marketers out, at almost every turn. Blocked messages, do-not-call lists, anti-spam actions and now even do-not-track actions are making it quick and efficient for consumers to shut-out and ignore marketing messages. Furthermore, 46% of consumers stated that they would consider defecting from a brand who continued to send them irrelevant messaging.[i] This is an urgent wake-up call for marketers, and it underscores how detrimental irrelevance can be to marketing’s customer engagement efforts.
Consumers are now in control of your messaging and the lack of personalization and targeted relevancy in marketing communications is a dangerous marketing miss. This is a phenomenon we call “Know Me or No Me.” Consumers are making it clear to marketers that they will vote with their scarce dollars and scant attention, favoring brands that demonstrate an understanding of who they are and what they need. This leaves marketers with a significant challenge: to retain customers, grow revenue and optimize ROMI, marketers must make themselves relevant and engaging – and fast.
Art Meets Science: Data-Driven Marketing
Relevance is not a best-guess initiative for marketers. Compelling relevance that drives customer engagement is based on customer insights drawn from data on customer behavior and preference. Today, there is a vast abundance of data to be leveraged which makes relevance attainable. Although it’s possible, it’s not simple. Accessing and leveraging the data is the first step. Data alone won’t solve the problem though; it must be translated into actionable insights and then effectively blended into the marketing creative process. For marketing, the new piece of this practice is utilizing and leverage data to drive insights that determine your targeting, your messaging and ultimately, your customer engagement and ROMI.
While data has been historically scarce or difficult to capture and store, investments and recent innovations in data analytics and business intelligence have significantly improved this situation. Today, customer data is abundant, and the challenge is understanding how to mine and use it for the good of the consumer and your business. New data solutions can be used to collect, store and process data in a way that dramatically impacts many business processes, especially marketing. These solutions not only bolster more precise marketing, they enable marketers to more accurately measure results and drive better ROMI. In many cases, data is far from perfect – inaccurate, siloed and incomplete -- so in order to leverage it for your relevancy needs, it’s important to invest in ensuring data integrity. In fact, even for marketers aware of how helpful data can be, the state of data can be a deterrent. In a recent study, 76% of senior marketers cited poor data integrity, siloed data or inaccurate data as the main reason they are not leveraging this information to realize the full revenue potential of current customers.[ii] But properly utilizing it creates more relevant messages and helps marketers gain a better understanding of customer needs, build stronger relationships and create a more loyal and valuable customer base.
By analyzing and leveraging data, marketers can take advantage of the Precision Marketing approach, a series of data-driven tactics that helps marketers develop targeted, meaningful and engaging messages to specific customers or prospects at the most appropriate time, through the most suitable channel. You can better understand what customers care about, what motivates them and what causes them to defect. Precise marketers can then use this information to develop personally relevant content for meaningful targets to meet customer needs and create a long-term, symbiotic relationship that over time can continually improve ROMI. Precision Marketing has been used across industries, applications, channels and geographies and offers significant value, especially in terms of driving higher ROMI.
Call Now!
There’s an immediate call to action here, and that is to understand the cost of ineffective, un-engaging customer touch-points and communications. Most marketers do not know that there is a hidden and detrimental cost that is undermining their marketing efforts. One company we work with measured its call center volume based on unclear communications, which triggered a whopping 1 million out of the 4 million calls they handle a year. Using the rule of thumb that a call center inquiry costs $5 to $50 per call, this expense is enormous. And it does not even factor in the frustration factor and negativity that customers associate with having to make those call center inquiries. Once this expense was quantified and measured, it was easy to justify the actions to utilize data-driven marketing and communications to better engage customers and improve the customer experience.
Consumers demand relevant, timely marketing messages. The most effective way to do this is to leverage customer data you most likely already have in-house. As consumers grow wearier of online tracking, it’s more important than ever to build trusting relationships by providing customers with tailored messages that convey an understanding and support for who they are and what they need. By embracing data and implementing Precision Marketing techniques, marketers can deliver meaningful, engaging, compelling communications. Simply put – data drives relevance, relevance drives results and results drive revenue and return.
To read more about maximizing ROMI through relevant, data-driven Precision Marketing and learn how companies in the hospitality, telecommunications and publishing industry have successfully done so, be sure to check out Sandra and Lee’s chapter in the BMA’s Advice From The Top, “Maximizing Return on Marketing Investment (ROMI)” at www.bmatopadvice.com.
[i] CMO Council. (2009). Why Relevance Drives Response and Relationship: Using the Power of Precision Marketing to Better Engage Customers. CMO Council.
[ii] CMO Council. (2009). Why Relevance Drives Response and Relationship: Using the Power of Precision Marketing to Better Engage Customers. CMO Council.