When you're promoting your LEED expertise, here are some things to consider. Does your company view marketing as an expense or an investment? If you see marketing as an expense, then you will manage your marketing budget like any other expense -- and minimize it. However, the successful marketers are the ones who realize marketing is an investment in the firm's long-term success and they will budget for, track and measure the return on their investment in marketing.
If your organization is among those that do not budget, track and measure, you are not alone. In a study by Suzanne Lowe of Expertise Marketing, only 23% of respondents said they calculated the return on investment (ROI) of their promotional vehicles. And, while one of the simplest ways to find out how well marketing works is to ask new clients how they found you, of the firms surveyed by Society for Marketing Professionals Services' (SMPS) Sally Handley, only half asked prospects and potential clients how they learned about their firms.
Why Market Anyway?
There are a number of reasons why marketing is vital to any organization, primary among them are:
- To increase revenues
- To maintain existing clients
- To create brand awareness
- To provide a return for shareholders or owners.
Increasing revenues is the prime reason driving most corporate projects, so why not for marketing programs too? If you view your marketing programs as an expense that you or someone else simply thinks is worthy, you may miss an opportunity and waste your budget. Instead, view your marketing programs as investments that grow in value and importance over time, like your other corporate initiatives.
As marketers, we must be good stewards of the company monies in our budgets. It is our fiduciary responsibility to make sound business decisions on how to best use them.
It takes a commitment in time, money and energy to build a marketing program. So, it is surprising that for those firms that develop them, less than 25% typically track their results and measure the cost of the investment.
Some of the common roadblocks to measurement are:
- Ease of making excuses, or rationalizing, that we lack time, people, money
- A staff of young and/or inexperienced marketers
- Lack of budget controls
- Fear of failure.
The firms that would benefit most from measuring results of their limited marketing dollars are small and medium-sized organizations. These are also the firms where we most often find young marketers who have not been exposed to measurement metrics. It is not that these professionals don't value measurement; they have more than likely never been taught why it's so important or how to use metric information to make business decisions.
As we grow in our roles, we may lack the desire to undertake complicated measurement programs that are not required by our superiors, or we may not have the opportunity to take the training. It also may be easier or safer not to measure because perhaps we cannot get permission to undertake a specific marketing project, or permission is granted but then we cannot prove that we increased our investment with that money. And, to some, the risk of failing equates to the risk of firing, whether a real -- or perceived -- possibility.
Conversely, successful marketers provide strong leadership and have systems in place to develop basic tracking methods and assign clear accountability. They make marketing results part of the annual review of the staff responsible for their design and execution. In addition, those marketing initiatives and results are included in their annual corporate budget reviews.
Monetizing Marketing
How do we determine the value of marketing programs? The key to the process is to develop an Expected Value (EV). To do so, you need only three pieces of information-the win rate; the average value of a project; and the average fee for this project type. For example:
- Win Rate: 30%
- Average Project Cost: $5 million
- Average Fee (8%): $400,000.
As an example, let's evaluate the EV of attending a trade show: Let's assume you generated 10 leads at this show.
- 10 leads yields 3 projects (30% win rate)
- 3 projects × $400,000 fee for each = $1.2 million, which is the EV of the Trade Show.
And, we can use EV to further refine our leads:
- $1.2 million fees ÷ 10 leads = $120,000, which is the EV of each lead.
Let's say you collected 100 business cards at your booth. Then:
- $120,000 ÷ 100 = $1,200, which is the EV of each business card collected.
So, as you can see, Expected Value is a very powerful measurement tool for placing a monetary value on the results of your marketing activities. At the top of the prospecting funnel, prospects have a low monetary value, but as they move through the sales process and are closer to becoming clients, their EV increases based on your firm's actual likelihood of winning the work. Now, when someone asks the question: 'Was that trade show worth going to?' or, 'Did the last direct campaign work?'; you can answer yes or no and provide specific dollar figures to support your response.
If the EV is greater than the cost of the marketing activity, the activity was successful and should be repeated. If the EV is less than the cost, it was not successful, and, therefore, that marketing activity should be reviewed for improvement or discontinued altogether.
Where to Begin?
To many who are contemplating a new marketing initiative, the measurement process may feel a bit like jumping off a cliff. But, employing the methods and tools outlined here provides a safety net and a solid foundation upon which to build your marketing initiatives.
Successful marketing programs work best when companies:
- Set reasonable goals
- Clearly define responsibilities
- Create a tracking method
- Make a timeline to measure results.
They communicate with everyone in the organization so that all understand their roles in the success of the marketing process. For example, the receptionist may be responsible for tracking the increase in phone calls while someone else tracks hits to your website. Remember, too, that marketing programs are not static, and over time, may grow or evolve in other ways.
Following are some of the specific channels that we use to track key marketing programs:
Marketing Options >> Possible Metrics
Direct Mail Campaign >> Appointments, Web Traffic, Brand Recall
Web Site >> Total Visitors, Page Views, Sign Ups/Email
Statement of Qualifications (SOQs) >> Short List Rate, Wins, Client Debriefs
Trade Show >> Contact Info, Appointments, Request for Qualifications
Print Advertising >> Call-Ins, Client Questioning, Brand Recall
Sponsorships >> Impressions, Contact Info, Appointments, Brand Recall
Overcome the Fear
For those within an organization who struggle with how to measure their marketing programs and suffer system overload, keep it short and simple. Start with a small or simple marketing project, and test and measure it just for yourself. When complete, look at the EV you estimated; compare it to the amount of real income your campaign brought into the company. Now you have a success story, backed by real measurement data that proves how the marketing function and investment contributed to your company's overall profit growth.
Scott E. Mickle, CPSM
President
AEC Marketing Solutions
www.aecmarketingsolutions.com
Ph: 704.560.7079
Fx: 704.248.8316
