How to Create Efficient, Successful Marketing ROI
Marketing your brand well is a significant expense. We can all admit that now, right? And unless you spend your company’s marketing dollars with your eyes closed, you’ve probably noticed that the cost is going up.
Company leaders want to know exactly what they’re getting as return on their investment—or ROI. When those leaders ask, “How can we get more from our marketing dollars?” They are usually answered by marketers wearing a smirk with, “Spend more money.”
The question is fair (as is the answer). It’s an honest request and one that, frankly, more leaders should be asking. And those marketers wearing a smirk would do well to know why ROI is such an important metric for company leadership.
What is Marketing Return on Investment (MROI)?
MROI is the practice of calculating profit and revenue from the amount a company spends on marketing. ROI is an actual number that is only known after an investment is made, but MROI is an estimate based off of historical data.
MROI helps companies measure the degree to which their marketing initiatives will contribute to revenue growth. Now, when a leader asks, “How can we get more from our marketing dollars?” marketers can now reply with, “Let me show you how spending more money will impact your goals.”
What Else Does MROI Help?
MROI Justifies Marketing Budgets
MROI provides evidence (or lack thereof) that a budget allocated for marketing purposes is a good use of company dollars. If the ROI of a company’s marketing initiatives is meeting or exceeding company goals, this stands as a strong justification for keeping, or more likely increasing, the marketing budget.
MROI Advises Marketing Budget Spend
Since MROI allows marketers to better understand initiatives that have a higher ROI than others, decisions about where to allocate marketing dollars are crystal clear. Once ROI goals are established, multichannel marketing campaign budgets can be adjusted higher or lower, depending on how any specific channel is contributing to the goals.
MROI Creates a Baseline of Accountability
Telling compelling stories and creating beautiful content will deliver customers and sales when it’s strategically implemented—that’s a great investment. Dollars spent on great content that doesn’t help your business reach its goals (i.e. increasing customers/sales) is a bad investment. MROI allows marketers to think clearly about every dollar before they spend it, so that creative and media can work together to serve client goals.
Could you use some help with your MROI? Want to spend some time with Mad Genius, sipping coffee and diving into your company’s numbers? Maybe beer instead of coffee? Reach out today and let’s talk about how we can help you be successful.