Peer into the mind of a business owner or marketing executive, and you’ll find dozens of three-lettered acronyms floating around in that entrepreneurial gray matter. Metrics give us the power to measure results, test our assumptions and make educated guesses about where the business is headed. It’s easy to develop an obsession for these indicators, reading the tea leaves in an effort to see what’s working, what’s not, and how much money is likely to be made in a given month or quarter.
Any business has its own unique set of KPIs. But when it comes to marketing metrics, few are more crucial than ROI. More than any other indicator, ROI helps us answer that all-important question, “Was it worth it?”
On the same token, over-investing in initiatives with a low ROI is a surefire way to burn through a marketing budget. Here are a few ways you can make that happen.
Don’t test your assumptions
This is why we recommend conducting Audience Persona research and analysis prior to embarking on a wide-ranging marketing strategy.
Constant experimentation is essential in today’s always-changing realm of digital commerce. What works one month may fail to reap dividends the next. In this environment, you can’t afford to make uneducated guesses.
Experimentation can take many forms, depending on what tactics you’re implementing.
Planning a Facebook ad campaign with a high monthly spend? Before executing your grand vision, experiment with all the relevant variables – geographic location, demographic targeting, messaging and so on. Spending money on these small test ads will help you reap a greater return once the campaign is in full swing.
Sending out a huge email blast? A/B test your subject lines and content to find the sweet spot. Although email campaigns themselves are relatively cheap to create, the associated opportunity cost can be high. After all, you can only email your list so many times before fatigue sets in and open rates drop. A/B testing will help you make the most of each campaign.
Rebuilding your website? Conduct conversion testing to see what your users are doing on the current site – and in turn give you the insights you need to craft a site that yields an improved Bounce Rate and Conversion Rate.
Testing assumptions also applies to your high-level marketing and business strategy. Who are your customers? What makes them tick? What influences their decisions? What are their pain points? While you probably have a good understanding of your customer groups, you may not have validated those answers. Or your previous understanding may have been rendered moot by changes in the marketplace.
This is why we recommend conducting Audience Persona research and analysis prior to embarking on a wide-ranging marketing strategy. This can inform the types of content you produce, where you focus your paid efforts and how you position your brand.
Purchase too many marketing tools
We’re speaking from experience on this one. Last year, we conducted an audit of all the tools Inflow uses for SEO and Inbound Marketing. The results showed there were several tools that were no longer used by our team. Some hadn’t been used in nearly a year! The annual savings of eliminating these disused tools amounted to well more than $1,000.
It’s tempting to continue paying for a tool or service for those rare cases when you might use it. But ask yourself – is it really worth having around? Or would it be better to re-purchase or subscribe if your team winds up needing it?
Ignore the low-hanging fruit
Easy wins are a great way to boost ROI. For example, it’s not uncommon for websites to see a double-digit month/month traffic increase following the careful implementation of SEO best practices. These often consist of easy fixes like optimizing Title tags for the most heavily-visited pages and eliminating low-quality pages from the site.
Stick with the wrong horse
Is a marketing strategy failing to produce the expected results? Send it to the pasture! While it can be tempting to keep a campaign going – especially when you invested a lot of time and energy into making it happen – there’s no reason to keep it alive if your ROI isn’t high enough. Also, consider the fact that there’s a large opportunity cost to maintaining mediocre strategies; resources devoted to those efforts could be better spent on more promising opportunities.
Blog about the wrong topics
It’s no secret that well-written, authoritative blog copy can help drive traffic to your site. But not all blog articles are created equal. One common mistake is to pursue quantity over quality, churning out frequent posts without much regard to whether the article is a good fit with your target audience. Topics that are only tangentially related to your business might do a nice job of filling up your monthly quota of new articles, but they won’t necessarily resonate with your target customers.
The good news is that it doesn’t take much time to ensure that a post hits the mark. Conduct keyword research to confirm that there’s interest in the topic. Ask yourself if the article is actually useful for your customers. And once you’ve decided to move forward on the topic, encourage your copywriters to spend time digging into the topic.
Treat social as a monolithic, one-size-fits-all channel
This common low-ROI mistake is a close cousin to the blog pitfall outlined above. Everyone knows social can be very effective in promoting content and building brand-name awareness. However, a lack of nuanced strategy can limit your effectiveness.
For example, let’s say your organization sells specialty tech products to businesses. Would your B2B company be a good fit for an extensive (and expensive) Facebook strategy? Probably not. LinkedIn, on the other hand, could pay much better dividends; that channel is generally where businesses connect with one another. While there’s certainly nothing wrong with maintaining a presence on Twitter, Facebook, LinkedIn, and Google+ (yes, some people still use Google+), you’ll likely find a much better return by focusing your attention on channels where your customers are active.
ROI to the MAX
While there’s nothing groundbreaking about the advice above – much of this rests on common sense – businesses frequently find themselves falling into the low-ROI trap. Why is that?
For starters, modern marketers are tasked with implementing strategies that can span across dozens of channels and tools. There are countless moving parts to track and maintain – and it’s not always easy to keep tabs on which investments are providing the best return. Following too many other metrics can even lead to “analysis paralysis” when the indicators are giving you mixed signals.
Secondly, when it comes to experimentation and testing assumptions, there’s often an “it would be nice if we had the resources” mentality that prevents this from happening. This is understandable; time and money are at a premium, and deadlines loom large. But as we outlined above, even small experiments can yield impressive results.
While ROI isn’t the be-all and end-all of marketing strategy, we know of no better way to determine, on a campaign-by-campaign basis, if something is worth continuing. When you continuously focus on maximizing your return, an improved bottom line usually isn’t far behind.