The sequel – Are you wasting your money on Marketing?
Following our first blog entitled “Are you wasting your money on marketing”
we have had lots of questions and comments saying isn’t it all about return
on investment (ROI)? No surprise to us, this was somewhat expected…
So here goes. I avoided this topic initially as I think there are more
fundamental questions to address first and Its hard to cover everything in
~500 words!. I am also always nervous about ending up in circular debates
about ROI. However we all know ROI is important so here is what I think you
should do. Always set clear, measurable and timed objectives associated with
any marketing plan. They could be financial targets such as sales, market
share or profit. They could be other measures such as customer satisfaction
or timeliness/ accuracy of deliveries and so on. Objectives should be split
into annual targets for the overall plan and check points along the way to
monitor progress month to month or quarterly for example.
My word of warning however is not to end up in analysis paralysis. Please
also avoid the situation where someone in your business argues if you can’t
measure it don’t do it or vice versa. There are a number of activities that
we know the weight of evidence is that if we do them we are more likely to
be successful than if we don’t. A great example of this, as it happens, is
developing a marketing strategy. If we were to say we can’t explicitly
measure the outcome of having a marketing strategy versus not, we won’t do
it, we would be missing the point. It is very hard to isolate the impact of
certain activities and pretty much impossible to run a controlled study
comparing the two scenarios.
Another area, for example is PR. I can’t tell you how many PR friends and
colleagues struggle with this question. I will answer it for them. Well
conducted PR can be highly cost effective and much more so than advertising.
Don’t get me wrong though, this still leaves us with the issue of how many
resources we should allocate to which activity. My suggestion for this is to
make good judgements and see what is or seems to be working what is not. Use
appropriate measures to help to guide you and adapt as you move forward.
So the answer to the question of ROI is therefore to be sensible. Measure
what make sense to measure and adapt accordingly but don’t be so pedantic
and purist about it so as to limit activities that make intuitive sense or
where the weight of evidence is clear. That is part of the fun of being in
business. Weighing up all the factors and making good strategic and tactical
choices in order to drive double digit growth and add shareholder value.