The above chart shows drivers and barriers stated in a study from Conference Board that shows why Marketing Execs Struggle To Show ROI. While some of this may have applications to Business to Business marketing, it also has relevance to media marketing Return on Investment....
"Marketing executives are under increasing pressure from CEOs to show a return on investment for their programs, but many are struggling with complex processes, technological difficulties and internal resistance to measurement systems."
Sound Familiar? It really shouldn't if you can get your head wrapped around the Customer Marketing Profile process which asks all the questions needed for the EFS Generator available from Luce Performance Group. The data is actually very simple, you need to know the advertising budget, the period in weeks that it entails, the total average sale that includes incremental and lifetime customer value, the profit margin, the closing ratio, and the weekly cume of your station, the EFS Generator does the rest as we look for a benchmark of a 20% Return On Investment. The formula shows how many prospects need to be generated by a campaign to be successful.
As the above chart shows, data availabilty is the top barrier to integration followed by methodology/know how and employee involvement. Your clients have to gather the data, it can be as simple as a tally sheet with your property name on top followed by other media they advertise with. They need to ask each caller or customer "how did you hear about this sale/the business/the product/our store?" and then keep track on a constantly monitored tally inside the store. We provide the methodology, your clients provide the data by involving all of the employees in the business. I have had some clients invite us to a staff meeting to inform all of the employees what we are providing, what information we need, and how they can help. The most successful clients work the question to their customers into the requirements/bonus program that helps motivates their employees. The key is measurement and the best way to get the data you need is if each client you work with integrates it into their culture and policy.
Once you have the information on the prospects that you have brought into the business, it is your responsability to generate a report for your clients showing the number of prospects you have brought to the business. They will find out if the closing ratio and average sale they thought they had was accurate or not, more importantly they will have a tangible report on the return on their advertising investment.
"Although the inputs and expenses associated with marketing can easily be measured on a monthly or quarterly basis, the results of a successful marketing effort ? enhanced brand recognition and reputation, customer loyalty, improved market penetration, expanded networks and cross-selling opportunities -may not be realized in the form of increased revenue within a specific timeframe and may be difficult to forecast, the report noted. External economic forces, such as market movements, business cycles, and competitors? marketing efforts, make it difficult to evaluate returns on specific marketing efforts in the near term. Internal factors, such as changes in product quality, delivery times or technical support, can also affect ?returns,? making it difficult to attribute results to a specific marketing campaign."