Not just any return on investment

First published on LinkedIn June 25, 2018

Posted by Michele Curran

July 27, 2018 | 2 min read
Not just any return on investment - Volta Compass Ltd

The one thing that clients always ask for is the ability to see the direct return on investment (RoI) that any marketing expenditure would create. That is a fair ask.

The thing about RoI is that you have to define what that return is. What tangible output do you want to see? Is it increased revenue, increase in profit, bigger qualified pipeline, more ‘opportunities to see’ comms, social media reach improvement, invites to particular events, industry league table improvements?

Often, when I unpack that question with a client there are multiple returns required. This is fine, and it is good to apply multiple performance indicators to marketing activity allowing a more rounded story to emerge in the reporting of the output.

Calculating RoI can be seen as a challenge as there will be a unique set of circumstances applied to each company. This is where the Leadership team of the organisation need to work collaboratively with their marketing department.

To be able to deliver an expected RoI you need to understand what your ideal client looks like – not literally looks like, but their corporate persona.

Take, for example, financial outputs for RoI – increases in qualified pipeline, revenue or profit will always feature as one of the returns expected of marketing activity, after-all cash is the life-blood of all organisations.

You will need to provide a financial breakdown of your client base. Not only do you need to know (not just guess) which clients are your most profitable, but also factor in things like prompt payment, longevity of relationship, repeat work profile, service levels required by client etc. This starts to build the vision of the ideal client from a finance perspective– clarity on a client’s financial performance will help you to define what are important finance factors for the RoI.

You can then profile other factors that you know about them i.e. sectors that they work in, growth plans, social media profiling, to develop further performance indicators that make-up your ideal client. You can also add a weighting to these performance indicators to provide better sensitivity analysis.

Once you have your client analysis evidenced your marketing RoI KPI’s can be established.

This exercise will not only provide you with clarity on your marketing RoI, but also clarity on who your target client is, and provide the foundations to start to map your ideal client’s decision-making and engagement journey – marketing working hard to deliver results!