“If you can't measure it, you can't manage it.” - Peter Drucker
Every CEO, MD and Director wants to know what they are getting from their investment in marketing.
If the ROI is known, everyone would invest more in what works.
Skeptics have moved past the “we don’t need marketing” phase, but the “where’s the ROI?” question still remains unanswered by many recruitment marketing teams. Often through no fault of their own.
You want ROI from marketing investment
You don’t do the work to enable your marketers to measure it
The marketers end up doing the work, otherwise they can’t show you ROI
Marketing does less work marketing, and more work enabling measurement
The investment in enabling ROI measurement does not, itself, generate a return
Let’s break these points down.
Obviously.
But, let’s be clear: not every pound you invest in marketing will create a return, or even if it can, it cannot all be measured. The cost of building a brand is simultaneously immeasurable and priceless.
There are lots of constituent costs in a marketing budget that you will never be able to break down to the point of proving the pounds and pence return. What you need to aim for is the ability to show the overall return on your marketing investment.
To do this it is critical that you know what can and cannot be measured. And, from the parts that can be measured, you need to know how to measure it.
The marketer/marketing team inherits the systems, technologies and processes you have established. It is unlikely that you have involved a marketer from the ground up when building out your tech stack.
If this part of your business isn’t well thought through and used, asking marketing to give you last year’s ROI is like asking Boris Johnson what date the last party he went to was.
Ask yourself what you expect marketing to do that will create revenue. Then ask yourself - if this happened today, would we be able to capture it, report on it and compare it to your marketing investment?
You expect marketing’s work to generate client enquiries.
9.00am, the phone rings, and a prospective client asks if you can fill a job vacancy for them.
The relevant team handles the enquiry, takes a job spec, fills the job, generates revenue.
Does anyone ask the prospect, now a client, how they heard about your business?
If the sources of enquiries are not recorded, how do you know what triggered the enquiry? It could have been from a marketing campaign, some content or it could be another source (not proactive marketing) such as a referral. Regardless of what triggered the phone call, you should know where your business is coming from.
There are three things to note here:
Is there a CRM/data capture system in place to record this information?
Is there training of teams to use this system appropriately?
Does this information get reported on, with revenue calculated from the enquiries?
Without the systems, processes and training required to effectively capture where enquiries are coming from, your sales and business development teams are just doing what they know best.
The marketing team is left without critical components that enable them to do their job effectively. Ultimately, they can’t show you ROI from marketing in real terms (i.e. revenue, or the ratio of how much money came from how much marketing investment). They then need to do more than just marketing. They need to devise, build and implement ways to measure and track this information.
Marketers are urged to know their numbers to be taken seriously by the board. But it’s too often the same board of directors that oversee systems geared towards sales processes that do not enable marketers to do this.
The problem when marketing cannot effectively demonstrate ROI, due to organisational and/or system failure to do so easily, is that marketing then also takes on the challenge to create ways to do just that.
That is a job in itself, especially when dealing with a dynamic organisation servicing a fast-paced industry.
Marketing professionals spending time working with IT and infrastructure colleagues/suppliers to put in place a way to measure where leads, prospects and enquiries are generated from, is time away from what we view as ‘marketing’.
This isn’t to say that marketing shouldn’t be involved in this, or that data, reporting and analytics are not central to marketing as a profession, but there’s a difference between ‘marketing infrastructure’ and ‘business infrastructure’. Marketing infrastructure feeds business infrastructure - but if the business infrastructure isn’t set up correctly, marketing will struggle to show you the return.
Marketing time spent on enabling measuring ROI cannot be a generator itself of a return.
Colleagues and boards of directors will be demanding tactical delivery of ‘marketing’ at the same time as a marketer/marketing team is plugging away developing the infrastructure required to measure the work being demanded.
If marketing develops ways and means to measure ROI alone, the chances are that it isn’t a model that’s accepted business-wide. This can work to an extent - i.e. marketing will prove their worth. Enough return is shown so they are no longer questioned. This is okay, but it does result in an undervalued function. Marketing’s makeshift systems and processes are no replacement for business-wide agreed and adopted processes for reporting.
In order for your marketing investment to generate a known return on investment, you must have the business infrastructure and business processes in place to effectively measure the returns.
There is a trade-off. It will cost your business to invest in the infrastructure, tech configuration and reporting functionality to enable ROI to be measured. There will also be a shift in how your entire business captures and reports data.
Failing to report and capture information business-wide will let your marketing team down. They will not be able to show the fullest ROI possible.
For more information about how to effectively measure marketing ROI contact us for a chat.