It is no secret that throwing money at print and broadcast media is no longer the only (or likely, most effective) way to get your target market to take action. In response, countless articles have been written and presentations given about the changing marketing mix. Now, many CMOs are pushing their managers to incorporate buzz marketing programs, experiential marketing and sponsorships without full knowledge of how these channels work or what should be expected as an ROI.
The current state of the art in measuring marketing ROI is market mix modeling. Unfortunately, this technique does not work with evey industry and sales process. In addition, many companies dont have the years of monthly sales data (or at least 50 weeks of weekly sales data) and highly detailed documentation of monthly or weekly marketing expenditures over the same period needed just to meet the minimum requirements to be able to run the models.
So, what can you do to find out how well your programs are working?
Working with clients like Jack Daniels, Mercedes-Benz USA, Dove and Bose, weve uncovered five keys to gaining useful marketing ROI insights that:
- Demonstrate to executives the financial impact of your different marketing initiatives (traditional, sponsorship, experiential) in moving targeted markets; and
- Provide the necessary diagnostics to prioritize specific actions you can take to increase your ROI.
1. Focus on the goals of the program
Before you measure anything, define what success means for a program in terms of actual behaviors. For example, a recent on-campus experiential marketing program was designed to drive a specific increase in online registrations. If that goal had not been pre-defined, we might have provided feedback only about the program content and experience without explaining how each element was – or was not – driving online registrations. In the end, the client would have had plenty of information about the program, but nothing that allowed them to determine whether or not it was a success.
2. Capture the cross-effects of marketing activities
Dont look at your ROI too narrowly. In most cases, a specific event or sponsorship is accompanied by multiple initiatives designed to leverage or build on the interest you have generated. If you dont broaden your view, you may under-represent the full impact of your dollars and be unable to compare how well each initiative influenced behaviors.
This past season we measured the impact of all of the elements of one clients NASCAR sponsorship (e.g., in-store promotions, race team exposure, the on-site experience) on consumers brand perceptions, usage and advocacy. Because we accounted for all of the elements of the marketing program not just the race team – they were able to re-allocate their marketing dollars towards the things that were working best.
3. Focus on revenue generating behaviors
Consumers rarely adopt brands or products that require a significant financial or relationship commitment – like Mercedes-Benz or Bank of America – on impulse. More often, the trial decision is based on a relationship with the brand that goes through multiple stages (e.g., awareness, consideration, trial, purchase, loyalty, advocacy) over time.
To demonstrate the full impact of your programs, you need to go beyond simply impressions and short-term sales. Instead, measuring what specifically drives stronger relationships with your brand, the impact of your programs on all of those associated behaviors and the dollar value of each stage. That way you can demonstrate the financial return in both the short and long-term.
4. It is not just what they are saying, but to who and how
Measuring the impact of word-of-mouth advocacy on its own – or as a byproduct of another program needs to go beyond the standard would you recommend us to a friend question that is often included in customer service or brand research. To make the findings useful, you need to know exactly what people are talking about. If someone is recommending a hotel, are they really recommending the room, location and services? Is it the staff, loyalty benefits or the overall quality of the experience? Was it great on its own or just compared to the competition?
Knowing what specifically causes people to speak about their experiences allows you to create communications and experiential programs that leverage those strengths and make it easy for your best customers to sell on your behalf. You can then track your success in driving advocacy over time.
5. Know where you stand
Timing crunches and smaller budgets – especially for non-traditional media – often result in the temptation to cut corners by not conducting a baseline or using a control group in your research. The problem is that without knowing where you stand with a target audience, it is impossible to truly understand the impact of an initiative and whether it should be changed, renewed or thrown out all together. Looking at the results in a vacuum can be extremely misleading – in either direction – and cause you to make decisions based on apparent success or failure rather than reality. Dont let bad research drive bad decision-making!
To learn more about how to measure the impact of new and traditional marketing channels, contact Rich Schreuer, Senior Vice President of Chadwick Martin Bailey at email@example.com or (617) 350-8922.