Tag Archives: ROI

Raising Expectations

by Dan Woychick

One ordinary morning, a memo appears in your in-box.

We are embarking on an organization-wide, resource allocation review. Each department is required to provide benchmarks to evaluate the value and effectiveness of its work.

In other words, please justify your existence.

This is a conversation that I’ve been hearing a lot lately. It’s not an unreasonable request. Marketing departments should not be immune from scrutiny, or excused from providing evidence that their work is effective. However, as a colleague in higher ed noted when faced with this assignment: We can track the typical things – media coverage or Google analytics – but most of the indicators that we’re making good use of our financial resources are tied to other offices, like Advancement or Admissions.

Separation anxiety
There seems to be a common misperception among both for-profit and non-profit leaders that departments function independently of one another – that marketing’s impact, for example, can be separated from an organization’s overall goals.

Other than putting together a birthday card for an office colleague, isn’t the success of any marketing assignment inextricably linked to others’ goals? If the advancement office doesn’t raise enough money, then fundraising communications weren’t successful enough. If enrollment targets were missed, then admissions marketing must be improved.

I understand that anxious executives want reassurance and a way to mitigate risks – marketing is a mysterious line item in the annual budget. Unfortunately, it’s also often viewed as an add-on – more style than substance – and subsequently expected to show return on investment without the advantage of being considered an essential organizational function.

Roll up your sleeves
Imagine driving down the road when suddenly your car starts making a funny noise. Next, smoke starts billowing from under the hood. In a panic, you pull in to the nearest repair shop. You tell the mechanic, “I’m kind of in a hurry and I don’t have much money. Can you fix this?” The mechanic walks slowly around your vehicle, deep in thought. Finally, he fills a bucket, grabs a sponge, and washes your car. Did he solve your problem, or just make it look better?

Too often marketing offices are being asked to make the engine run better – to help an organization solve a problem or reach a goal – without ever having the opportunity to look under the hood.

Let me be clear: It’s not management’s fault that marketing is misunderstood. It’s ours. Until we can make a compelling case – using both objective and subjective measures of value and effectiveness – marketing will continue to encounter the resistance of low expectations.

State your case
Marketers are in the business of telling stories, but we don’t write fiction. Successful marketing is reliant on thorough inquiry, diligent training and practice, collaboration, and coordination of resources. None of that happens in a vacuum.

If you’re going to have an ROI discussion, do it within the context of organizational, not departmental, goals. Whether you’re trying to convince people to choose your service, attract donations, or inspire volunteers, the planning, strategy, and measurement take on a different tenor when each element of the enterprise is considered interdependent.

Before the lights dim, before the conductor raises the baton, a discordant blend of strings, percussion, and woodwind instruments squeaks and groans from the orchestra stage. It is only when the musicians begin playing in unison that we can appreciate their talents. That’s what marketing can do. If it’s not in alignment – and deeply involved – with an organization at its core, few measures carry meaning or insight.

What to measure
There’s a lengthy history of valuing scientific, left-brain thinking over the more intuitive right hemisphere of the brain. Increasingly, complex problems require the flexibility to integrate both ways of thinking.

Rather than counting web “hits” or desperately seeking more “likes” on Facebook, here’s one measure that should be tracked:

How much time and money is spent learning about your audience(s) – internal and external – so that whatever marketing materials are produced can be as targeted and relevant as possible?

As those numbers increase, so will the effectiveness of your marketing efforts.

How do you demonstrate a return on investment?

Measure Twice

by Dan Woychick

As more marketing happens on laptops, tablets, and smartphones, the demand for and trust in metrics continues to grow. If something can be measured, it will be, as return on investment (ROI) weighs on the minds of executives everywhere.

Analyze the following proposition. This product deprives you of sleep, makes unpleasant noises at inappropriate moments, is temperamental, requires constant attention, and costs a fortune. Babies. Who in their right mind would sign up for this? What’s the return on that investment?

We like to think we’re rational creatures, and that any situation can be measured, analyzed, and then systematically improved. And while many business metrics can be useful – even vital – they take the place of instinct, experience, and other available means of perception at our peril.

Blind spots
The truth is a lot harder to identify than it would appear at first glance. Individuals, each with their own beliefs and biases, can be relied on only to reveal one version of “reality.” One man’s trash is another’s treasure.

I have fond memories of watching Hogan’s Heroes as a boy and planning “escapes” from the basement with my brothers. I think the show is funny and still apply favorite lines to everyday situations. My wife thinks it’s one of the dumbest TV shows of all time.

In a million different ways we are all “reality challenged” and that’s a good thing – vive la différence! But we can also become blinded by our biases, form premature conclusions, and miss alternative points of view, as in this Awareness Test:

 

Cooking the books
People tend to seek out and believe numbers that support an existing assumption or preferred course of action. In other words, we see what we want to see. Marketers can shape or choose “facts” that feed this tendency.

There are three kinds of lies: lies, damned lies, and statistics. – Mark Twain

Television commercials are rife with examples. Four out of five dentists recommend sugarless gum for their patients who chew gum. The Ford F-150 offers best-in-class fuel economy. More people find love on Match.com than any other dating site.

The existing bias toward plausibly objective data is widespread and tempting for many organizations. Earlier this year, Claremont McKenna, an exclusive California college, admitted to inflating freshman SAT scores for six years to improve its place in the U.S. News & World Report’s widely-read college rankings.

Blind spots can be dangerous as well. During the lead-up to the invasion of Iraq, an independent weapons inspector found no stockpiles of WMD in the country. Since these findings didn’t support its strategic goals, the U.S. government simply used other measures to justify military action.

Buyer beware
The collected wisdom of the general public is subjective and often flawed. This creates opportunities for data wonks to dazzle us with metrics that may or may not illuminate effective decisions.

Many social media consultants will happily rattle off statistics that have the imprimatur of legitimate insight: “We measure influence and engagement and have the pie charts to prove it. ROI? Have we got numbers for you!

We know social media is important. That’s what everybody says, and everyone we know belongs to several social networks. Statistics may simply back up our existing beliefs. But, honestly, are you seeking out opportunities to engage in dialogue or conversation with a company, an institution or a brand? I’m not. Do these numbers reflect actual behavior that supports business objectives, or is it wishful thinking?

In preparation for the National Football League draft, teams put college players through a battery of tests. How many times can you bench press 225 pounds? How far can you jump from a standing start? How fast can you run 40 yards? While all those things can be quantified, in isolation – or even cumulatively – they do not reveal whether the athlete can actually play the game.

A measured response
Some things can and should be measured, but the quest for ROI is often more about minimizing risk than maximizing revenue. We must remain aware of our own biases and blind spots if we hope to transcend the data.

Gaining meaningful insights through research most often requires a balance of art and science – subjective and objective measures – because even though bean counters can tell you how many beans are in a jar, they can’t tell you how good they taste.

Related content:
Are Metrics Blinding Our Perception?
Do You Know Your Blind Spots?

Mining Your Blind Spots

by Dan Woychick

I was recently asked for guidance from a communications professional whose new boss wanted a report on their advertising’s return on investment (ROI). Panic ensued.

I can understand the panic, as it sounds a little like a Dilbert comic strip after the pointy-haired boss has returned from a conference with a new buzzword. This is not meant to deny the importance of spending ad dollars wisely, or tracking the effectiveness of your marketing efforts, but trying to construct a meaningful ROI report retroactively is folly.

What can be measured?
Everything. Anything. Just because it’s difficult to find meaningful numbers to attach to an enterprise doesn’t mean people won’t keep trying. Data allows us to rationalize our actions. And it’s widely accepted that reason is more reliable than emotion or feelings. But is it?

Conventional wisdom
Across the corporate and non-profit landscape, quality improvement efforts are stuck in the factory mentality of the Industrial Age. If only things are well-measured, the thinking goes, we’ll produce better widgets, graduates or advertising.

Our brains are wired to overestimate the likelihood that our future will look a lot like our past. This influences everything we do, placing great importance on data – essentially, history quantified. Unfortunately, our high tech world’s rapid pace of change virtually guarantees that the future we imagine is an illusion.

Learning to anticipate
Wayne Gretzky, the hockey legend, consistently outfoxed bigger and faster competition by passing to spots where a teammate was going to be. How did he always seem to magically be one step ahead of everyone else?

Undoubtedly, through hours of practice on his backyard ice rink, he acquired lots of data. But many players practice a lot. It may be precisely because of Gretzky’s disadvantages that he discovered an unexpected competitive advantage. He could sense, or feel, the play developing, and learned to see risks worth taking.

Risk aversion is human nature, but it blinds us to opportunities as well as threats. In marketing your organization, common assumptions about what the future holds (influenced by those ROI reports) create an artificially narrow set of choices.

To expand your vision, you need to recognize and resist the herd mentality. In your market, or with your audience, what is least likely to happen? Learning to see into your blind spots – exploring unexpected territory – allows you to anticipate the opportunities that others miss.

Related Content:

How to Become a Visionary

The Big Assumption Underlying Internet Media Ventures

Field Sense May Be Teachable