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Return on Investment is at the heart of every B2B marketer; any new venture undertaken has ROI as its key driver and ultimate judge in the measuring of its success. This month, we’re keen to focus on that important ROI, and how we as marketers encounter it and use it to further our methods. It's time to crunch the figures and know where every piece of your marketing stands.
There are plenty of ways to measure ROI, differing from company to company and practice to practice; but some techniques ring true for us all. This blog looks to how we can best practice our use of ROI- why it is so important to the B2B marketing mix and what we should be doing to make the most of the results we gain.
What does ROI mean to you?
Just as every company measures ROI differently, every marketer can gain something different from the result. The ROI Institute describes ROI as comparing “program benefits to cost”, and when measured and used correctly, it “shows not only the success of a particular project, program or solution, bust also provides detail into how the project can be revised to add additional value.”
So, you need to sit with your marketing department and ask them all- what does ROI mean to you? Only 28% of marketing leaders think they demonstrate the value of marketing efforts internally- this needs to be the first thing to change. To start with, you’ll need to figure out what “revenue” you’re taking into account as “return”, what time-frame you base the measurement of return from, and the departments through which your ROI stretches- does it stay in marketing or extend to sales and onwards?
Your team needs these answers to accurately use your ROI to measure success and implement improvements. Obviously marketing channels differ, so you’ll need to work together in finding a system that works for everyone.
How do I prove ROI?
This is the eternally asked question, and there’s no easy answer. With 94% of B2B buyer journeys starting online, first impressions count for a lot, but they don’t always generate product inquiries. It’s almost impossible to know how many times someone encounters your brand before stepping forward to learn more, so Google have proposed the ZMOT- the zero moment of truth. This is the time spent conducting research, between first discovering a brand and formally continuing down the buyer journey later. It’s when vital research is conducted, and leads are either made yours, or lost to competitors.
The difficult thing for B2B marketers to face is that because of the ZMOT, proving a fully rounded and detailed ROI is too difficult. Software such as Lead Forensics can offer an excellent insight into your website visitor activity, and how they progress through the pipeline, but how can you know when warm leads are reading your TrustPilot reviews, or when they’re checking out your social media reviews? Simple- you can’t. A lead may reply to your email with interest, but it was actually their visit to your website, specifically your customer case study they downloaded backed up by your social media reviews that lead to this response, not just the original email- so where do you apply the ROI?
When looking to prove ROI, you need to make decisions and stick to them, ensuring channel and department-wide consistency. This can’t provide that 100% accurate picture, but it can get you very close, and still offer those vital insights ROI provide- where are your best investments, and where are you making losses?
On the journey to prove ROI- here are some vital basics…
However you measure ROI, you need to know where these revenue generating leads came from. Some channels, like social media and print are notoriously hard to attribute correctly, especially when prospects call in, or neglect to mention how they found you when filling in a contact form.
29% of B2B companies have no attribution system, and only 27.6% of companies are using their attribution system for the right reasons. This is fundamental when calculating ROI, as using the wrong attribution model will lead to uncertain investments and problems further down the line. You may do a direct mail campaign and see little ROI, however a few weeks later your PPC goes through the roof. Could this be due to DM campaign informing a huge number of people about your brand, to the point where they searched your company and inquired through PPC? If your attribution model didn’t ask this question of your leads then you may cut your DM budget for next year and wonder why your PPC is down!
Understand your attribution, and then you’ll understand your ROI.
Match the approach to the process
There is no one way to measure ROI- especially in the B2B sector, processes differ, and sales cycles often take time. You need to make it work for your process. Take a weighted approach, where you apply more weight to the leads in the latter stages of the pipeline, and less weight to those that have only just entered it. The simplest way of doing this is to count both the leads currently on their buyer journey as well as those considered a closed deal.
By making this change you’ll not only see what marketing channels and campaigns produce the highest amount of revenue, but you’ll also know what channels provide an acceleration in the sales process. If your approach to ROI measurement doesn’t match your process, then you’ll end up making all the wrong investment decisions!
Start at the end
ROI is the end game- it’s the last figure you’ll note down in a report. This can make it seem like an unreachable entity, so it sparks little motivation; change that mentality by starting your process with that end goal in mind. What is your desired ROI (as a minimum) for a specific campaign? Know this figure, and know how you’ll measure it to work out exactly what you need to achieve it. Your ROI targets then become a palpable number that makes sense to you (and if applicable, your team).
Once you know this- it all gets easier. Now we’re talking a language you can apply easily to your channel, you’ll know straight away if that ROI goal is achievable based on the numbers you’re getting at the moment, and if not, what needs to change so you can get there?
Use this technique to plan ahead- what was successful before? Where were your strongest ROIs and where did your best customers come from? Speak to those customers about their initial interaction with your company, analyse all the figures and use this information to draw up your next campaign.
By using ROI like this, it becomes a strategic guide in planning your future. Set internal goals with the numbers you know, and explain to everyone how they lead to the ROI; you need to see this figure as more than just a measurement for success- it’s a guide to success!
Think for today as well as tomorrow
When measuring ROI, things can get very deep and a little complicated, especially when you’re branching departments, looking into CLTV (customer life time values) and more! The spreadsheets pile up and you produce a number- but don’t know how to use it.
Instead of thinking about the final number, think about today and how you can set achievable goals. Break them up into short term ROI, and long term ROI targets. In its simplest form within marketing, short term ROI is “how many leads did we gain from that campaign today?” vs long term “how much revenue was generated from the leads gained in that campaign?”. When working with a team, this is a great mentality, then they understand the importance of every stage in marketing and sales, including their own input.
With short term ROI- start small, and build it up. When you start on a new project set short term, simple to track targets. Take the result, make changes, and then set a longer term ROI goal. Continue to refine and improve based on how successfully you move along the ROI journey until you’ve got an incredible system. This means a) you can measure the real return on your investment and b) you’ve perfected your system in the process, so you’re stronger now than before.
Use ROI to team up marketing and sales
We all know the benefits. It’s no surprise to us that companies who have teamed up their sales and marketing are 67% better at closing deals. It makes sense when we know that 95% of B2B buyers choose a solution that provides them with relevant content throughout the buying journey, from marketing right through to the sale.
Sales departments benefit from using content and social media in nurturing a warm lead, so teaming them up with marketing means the investment is shared, and the return hinges on everyone utilizing it. When making decisions about investments for the future, you should incorporate sales into the conversation- what leads sell better and why? They might inform you that your PPC campaigns are bringing in the wrong audience, or your social media produced the best leads they had last year. You simply won’t know enough about what investments are guaranteed to bring revenue results without involving your sales team in the discussion.
ROI is a complex value that carries a level of importance for companies everywhere, so it shouldn’t be just another number you file away in a report. Use your ROI to unlock marketing success by learning from its result and considering it in discussions.
Free guide - Effective multi-channel models for marketing and sales has plenty more information in about marketing ROI. If you found this interesting, you should definitely give it a read!