Interesting article on Media Post about how marketing departments lack data and also don’t measure Return on Investment.
All areas of business need to measure this. The best run businesses make decisions to maximize the return of the money they invest. Do I spend more on TV advertising or what if I hired a direct sales person instead. Which brings in the most profit and revenue? You should choose the one that does and invest there.
Marketing is tough. Numbers are vague. Nielsen might say 2 million TVs watched a show but they can’t prove anyone was in the room. We can just estimate. We can prove how many banner ads were viewed and see clicks but unless they buy something then and there, we have no idea the true impact.
How can you allocate your precious financial resources if you don’t have the data to make these decisions. For marketers you first need the data.
This includes where you spend your money, the estimated results, and any actual results you can measure. You might place an ad with a coupon in a print newspaper. You know the cost. You know the circulation they claim to have. You can count how many are redeemed.
Next is agreeing what the value of certain activities are. How much is free publicity in a Magazine worth? You can estimate based on readership and the cost of buying an ad what you feel the value is. The same for coupons. If it brings in a new customer vs an existing one coming more often. How much is that worth? Social Media is free? No you have your own time invested or employee time.
Then you can create some spreadsheets and track this data monthly. Then correlate to sales in some ways. What if that print ad ran once a month vs every week? You can test what happens. Do you have a sales increase or not. What if you don’t and coupon redemption is the same? You know to place your ad just once a week and then use the extra money elsewhere.
This doesn’t have to be an exact science like stock investing. Trust me estimates are better than not having anything. Try different media channels and marketing techniques. Track this and start comparing results year over year and month over month.
And if you lack data….find it. Don’t say ‘I don’t have it’. Say ‘I need it and how can I get this data’. Your business’s health and success depend on it.