CMOs are under more pressure than ever to prove marketing’s contribution to company growth. But finding consistent metrics to put in place for all marketing activities can be difficult. Even more difficult is having the organizational discipline to consistently use the metrics year after year. Yet all marketers know that measuring improvement and changes over time is more important than looking at near-term result.
Trends in ROI Metrics Use
In the past six years, the number of marketers using profitability metrics, such as ROI, to measure some or all of their campaign tactics has grown over 50%.
- In 2005, 18% calculated ROI or another profitability metric
- In 2011, 28% calculated ROI or another profitability metric
Most importantly, ROI metric users are more likely to be outgrowing their competition, with a combined 64% of ROI metric users indicating greater growth vs. 51% for traditional-metric-using companies. (Source: Lenskold Group Marketing ROI & Measurement Study, 2005 and 2011)
Selecting and Implementing the Right Metrics
CMOs and marketing managers need to select the metrics which make the most sense for their company. Typically there will be both financial metrics for sharing with the executive board and marketing-specific metrics which are useful for the teams planning and executing marketing campaigns.
A couple resources I have personally found helpful include:
- The book, Marketing Metrics: 50+ Metrics Every Executive Should Know
- Gartner's Marketing Essentials Paper: Three Strategic Metrics Every CMO Should Master
As you select the right metrics for your company, or as you evaluate additional metrics to add in to the measurement mix, you will most likely identify some new metrics for measuring and planning, specifically related to social media and local marketing.
Introducing the Local Marketing ROI Calculator
At Balihoo, our clients are tasked with strategically balancing their national brand and marketing objectives with local sales objectives. To help make the planning a little easier, we recently launched the Local Marketing ROI Calculator. This early-stage planning tool helps marketers decide what percentage of the national marketing budget to allocate to local marketing.
And, don’t worry if you don’t yet have baselines or benchmarks for national and local marketing ROI. The benchmarks we frequently use when working with our customers and partners are provided. You can then adjust the scenarios to meet your needs.
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