Marketing ROI - Are we measuring the right things?

Have you noticed the number of articles and ideas on ROI in marketing that are being pushed around at the moment?

Often they are being presented by marketing automation companies and are in effect thinly disguised sales pitches, promising amazing ROI by automating marketing which ultimately just annoys potential customers when they start to receive nonsensical numbers of e-mails every day:

 - I get an average of 2 mails a day from Marketing Profs

 - 2 to 3 per week from Pardot

 - At least 1 a week from Marketo

 - At least 1 a week from Hubspot (usually 3)

according to my understanding of all this, ROI is all about visitor to deal ratios and things of that nature. Interesting and helpful, but are they really ROI, or are they just metrics that are designed to make marketing look good, even when its doing a crap job, like sending out so many e-mails to potential customers that it pretty much becomes spam.

So I am going to chuck an idea into the mix because the more work I do in this area of ROI, the more it looks to me like traditional views of ROI are more misleading than valuable.

Here is a simple thought. The value any company gets from its market is directly proportional to the amount of value it delivers the market.

It doesn't matter which way you try and analyse the statement, its just a basic truth. In the world of the Internet, with review sites, instant feedback and so on, there is literally nowhere to hide if you are selling anything other than a good product and meeting the market's expectations. 

So I would contend that measuring lead gen ratios is not really helping generate ROI from marketing and here is why. Think on the basic idea of value I laid out above and how that impacts ROI for marketing and sales, not to mention product development, support, customer service – in fact anyone even remotely connected with delivering value to the market.

Are we measuring the right things when it comes to ROI? Are we even thinking about the right things?

In the revenue focused part of any company we always finish up being measured on ratios that are sales focused. You know the kind:

•  e-mails to web visits
•  web visits to enquiries
• enquiries to qualified leads
• Qualified leads to proposals
• Proposals to deals

All very focused on sales with little or no follow on to customer satisfaction. That is someone else’s problem, not ours. However, let’s go back to that idea I proposed earlier – The value you get from your market is directly proportional to the value you deliver to your market.

I have worked with companies that have great reputations and the simple reality is that selling for them was relatively straight forward and making target was routine for anyone with any kind of sales ability. I have also had the misfortune to work with other companies that focused everything on selling and practically nothing on delivery and customer service. The result was a poor reputation in the market which made it extremely difficult for even the most talented sales people to make target.

  

Now that I have laid out a couple of ideas about how much the average company sales target relies on the reputation of a company in the market, I ask again – when it comes to sales and marketing ROI are we measuring the right things:

• Are we measuring Marketing’s ability to profile the right kind of prospective customers?
• Are we measuring Sales and Marketing’s ability to engage and build the right kind of relationships with prospective customers?
• Are we measuring sales and marketing on their ability to sell products and services to customers that deliver value and customer satisfaction?
• Are we measuring sales and marketing on their ability to service and retain customers properly to increase their lifetime value to the company?

Or are we still more interested in measuring ratios focused solely on sell, sell, sell without any consideration for the result of the sale in terms of customer satisfaction and the company’s reputation in the market?

  

The real point of this blog entry is to ask one question, are we measuring the right things when it comes to sales and marketing? Or are we just measuring the stuff that marketing software vendors tell us we should be measuring?

The choice is yours, but as a last thought, the companies I have worked with that have great reputations, measured customer satisfaction more than anything else and certainly more than the standard sales and marketing ratios. They are also the companies that find it easiest to sell to both new and existing customers?

I’ll expand a little more on some of these ideas next week, but in the mean time if you have any questions please do get in touch.