Let’s Get REAL and Stop Wasting Marketing Dollars
Too often marketing is a cost-center and marketers are given a bad rap for making big decisions with a gut instinct. The consequences of these decisions are only seen, if they are, months later when someone takes the time to compile data from multiple, often disparate, sources. Instead of maximizing marketing dollars, marketers can easily fall into the trap of throwing everything at the wall to see what sticks. The challenge: business operates in real-time, so it requires a dynamic and measurable marketing process that uncovers real opportunities and limits spending resources to increase return on marketing investment.
What if I told you, you have been duped? You should not accept an ad-hoc marketing strategy, just as you don’t decide if to pay the payroll based on your mood or someone’s gut feeling. You don’t want to miss the opportunity to evolve and become your industry’s Blockbuster, originally offered to purchase Netflix for a mere $50 million only 20 years ago. Instead of feeling overwhelmed by choices, underwhelmed by clarity, and a general headache coming on, take a breath and get ready to unpack valuable information that could have “turned back time” (that’s enough Cher, did we mention the headache):
- The reality of consumers and marketers today
- The role of digital transformation for the customer journey
- A simple ROI calculation
- The steps to roll out digital transformation
- ROI pitfalls to avoid for ultimate marketing performance
The Reality of Consumers and Marketers Today
Today’s consumers, B2B and B2C alike are informed, demanding, and impatient. Being able to have everything at our fingertips has made every single person an “expert” despite the fact that information should not be treated equally. In theory, we know what you read in a meme does not have the same credibility as a reputable medical practitioner, however, the source of information is not always taken into account when people consume it.
- Because today’s consumers are informed, they expect consistency, transparency, and value at every turn.
- It means if they are promised a perk from one rep or brand, they can expect it from many others (e.g. what gift do you give on customers’ birthday? What is the bonus for referring another customer?). This should be kept in mind when planning marketing activities.
- Because they are demanding, they covet personalization, responsibility, and accountability with younger consumers also looking for humanity.
- It means if they want things to be easy for them. For example, if they purchase an item, they do not want to see a display advertisement with the product they already purchased. Instead, they want to know how to use it or what goes well with it.
- Finally, as impatient purchasers, we expect simplicity, convenience, and a proactive/reactive experience overall.
- It means that customers want things now, not later, as advertised or promised. For example, if a popular item is out of stock, the consumer does not want a replacement, they want the company to make it happen with no excuses.
When you take into account the reality of today’s consumers it means the life of the marketer is complicated and evolving to be even more time-consuming. Every day there are more marketing channels (hi TikTok), more trends (digital transformation), more tactics (programmatic ad buys), more influencers (eSports) and it leads to a general sense of being more overwhelmed. Gone are the relaxed days of the marketer, replaced by an overload of to-dos and pressure from peers. Don Draper (Mad Men) had it easy compared to the marketers of today.
Unfortunately for most companies, often what gets the most attention is the idea or campaign from the loudest person, not the most impactful for the organization, customer experience, or growth of the company. Bottom line, it’s time for a change. It’s time to empower marketers to work on the projects and marketing campaigns that will create the most value and the highest ROI. It requires a commitment to KPI management, proper information flow and integration between systems, and, most importantly, openness from the team to adapt.
The Role of Digital Transformation for the Customer Journey
A typical customer journey can have dozens to hundreds of customer touchpoints. Often taking a customer from a stranger to every situation that can arise within their experience working with a brand. While every single department impacts the customer journey, it is often the marketer that is most sensitive to its overall impact. A typical customer journey, B2B or B2C, will group steps into this sequence:
- Consideration including, research and decision-making
- Purchase and acquisition
- Delivery/Service (is your offering a good or service)
- Loyalty and retention
The customer journey is often impacted by the priorities and KPIs (key performance indicators) of the teams. For example, leads are acquired in the awareness phase, and generally, this is managed by marketing. In this phase having a robust website with relevant blog posts and information easily found along with educated sellers are two examples of supporting a consistent customer journey.
Be warned, everyone is looking for red flags. Negative reviews, inconsistent messaging, lack of clarity by the sales rep. People want to avoid making a bad decisions. There is no room for error in protecting your brand equity during the Awareness and Consideration phases. Just like a bad blind date, a single red flag can have your prospect running for the hills.
Successful marketing activity stems from a clear strategy, requires proper execution, and is supported by robust technology. When this happens touchpoints are tracked, an ROI is given to each initiative and both the cost of acquisition and customer lifetime value are clear. Most importantly, each department or stakeholder knows their responsibility in the customer journey and the customer experience is the top priority for all involved.
A Simple ROI Calculation: An Example
ROI = (Net Return on your Investment / Cost of Investment) *100
In this case let’s make an example for a Google Ad, considering the website is a fixed cost and not used to calculate the ROI but if you wanted to you could by figuring out a cost per visit or acquisition to your site (cost to have and maintain website/visits).
For this simple example, you would name your Ad (ex Ad Group 123) and ensure to have a campaign in your Marketing Automation Platform with the same name that is connected.
- I spend $1000 in a certain month on a given Google Ads Campaign,
- It generated 30 clicks
- From the 30 clicks, there are three leads
- Of the three leads, two have opportunities – one will close in two months, the other will close this week and one will be nurtured
- The three leads should have the lead source Ad Group 123 in your system
If we assume:
- The reporting period is 1 year and then calculated again in the future
- The lead that will close in two months will generate $200 in the first deal and $10,000 in an average lifetime (can be adjusted for different customer profiles)
- The lead that will close this week will generate $100 and another $10,000 in an average lifetime
- The Nurture lead has a 10% probability of closing within this year for another $200. You can include it, or decide to be conservative in the calculation
- Then this is the ROI calculated for this year and the lifetime value (with and without nurture)
|Google Ads 123 Campaign ROI|
|Marketing Spend||1000||Cost per|
|Revenues||This year||Future||Lifetime value|
|Lead 3: Nurture calculated at 10%||$50.00||$1,000.00||$1,050.00|
|ROI||This Year||Lifetime value|
This is where getting specific on what success means to your organization is important. While Marketing might not have a seat in every department, the ROI needs to take into account the goals of the company as a whole, not just the marketing team (goodbye impressions).
In any company, you would construct your rules based on your company and industry best practices. For example, you might not look at lifetime value because of the business situation you are in OR you might include the nurture leads because you believe there is a real opportunity with them.
What if I told you, you don’t need to calculate in this way. That there exists some Marketing Automation Software that based on the defined rules would make this reporting in real-time.
The 5 Steps to Roll Out Digital Transformation
Now you know what you want to measure, but the time to measure should be minimal – we all have work to do and decisions need to be made nearly instantaneously. I am not sure about you but both my boss and I lack patience. Well, automation through digital transformation has been able to help us manage ROI in real-time. We also do an ROI analysis every year to ensure we are tacking not only the active campaigns of the past year but our entire history. I get a kick out of a customer working with us having met us 4-5 years ago, and we can celebrate the success of the marketing campaign – even years later.
Here are the steps to get started to optimize your customer journey with the intent to improve conversion AND properly track ROI:
- With your strategy: Define a target, adapt the product and define technology needs
- Create your roadmap: Define roles and set up a roadmap, steps, and processes
Build the Foundation (or even a test) and leverage
- Technology: Implement the right tools and train the team
- Web/online presence: Optimize website and design a digital identity
- Tracking: Set up tracking and optimize tools
- Push Marketing Efforts: Implement SEM, Social Media advertising
- Pull Marketing Efforts: Implement SEO, Social Media Management, etc.
- CRO (Conversion Rate Optimization) / UX: Boost conversion while building customer loyalty
Monitor and adapt
- Reporting: Data reporting & visualization, industry monitoring
- Adapt: by restarting the process with an open mind and remembering it is an iterative process
5 ROI Pitfalls to Avoid With Digital Transformation
So everything always begins with the best of intentions but can spiral if a clear plan is not set in place – quickly. Speed matters here because you don’t want to plan so long for something that you miss the boat or even worse, the ROI is simply not calculated. If that means Phase I is in spreadsheets, great get started and then invest more. Or perhaps you automate, and you leverage the campaigns you have existing before investing elsewhere. Bottom line, your time is money, so use it wisely as well.
Here are the 5 Pitfalls we suggest you look out for in Digital Transformation:
It’s not “one-size fits all” just like no one diet works for everyone
- Not one architecture that fits all even for an industry – if you copy a competitor it might not even serve you because your strategy, positioning, and reality are simply not the same
- Don’t try to blindly follow your neighbor because you need to know your business.
- Also, you need to systematically introduce changes and tactics. If you don’t track the impact separately it will be hard to know what to attribute success to (many times it is indeed more than one factor, but the goal is to uncover the right mix to replicate)
Trust a provider who has experience
- Battle wounds and scars will save you from having them, so when in doubt go for a partner that has been there, bought the T-shirt, and learned some important lessons along the way. This is where experience outweighs theory.
Find your risk level
- Find the right approach to leveraging partners. Do you need a lot of support? Will you be comfortable with some risks? Decide in advance. Know that not everything will be easy/perfect so choose your balance.
Measure twice, cut once – but make sure to act
- Plan your budget
- Understand your architecture
- Remain dynamic and give yourself some leeway for any unplanned surprise along the way
- But get started because waiting will cost more in the end
Recall your end-goal Dashboards with KPIs
- Don’t get bogged down by the details; what is more important is to remember why you started this in the first place (to invest in the right places)
- Ensure the goal is top of mind in all decisions you take
If you are ready to get started, you should check out our FREE downloadable resource called The No BS Digital Transformation Workbook, it covers:
- The right approach to Digital Transformation including triggers for change
- Buzzwords with acronym definition
- How to own your organization’s information and business systems
- Quiz and tables to complete to uncover pain points and create your action plan
Once you have your workbook complete, I would love to discuss your results and next step with you so just reach out, and we can take it from there.