Know-How Exchange : Research/Metrics

Hi,

Great question ! I am working on this very topic (ROI across industries and developed vs developing countries). A key question is exactly what you mean by ROMI - as you do not specify the marketing action, I assume you mean the ROI of the full marketing department?

Koen

Hi Koen,

Yes, I am looking average/target ROI for the full marketing department (programs/tools + headcount spend).

Any perspective you have would be greatly appreciated.

Mary Beth

Dear eci.marketing,

Consider turning your thinking on its head. Here's why:

The thing about averages is that they're ... well, average: they're in the middle, they're neither good nor bad, they are just "there"—wherever "there" is.

Personally, I don't want to be known for being average.

I want to be known for being the best,—or, at a pinch, pretty darn close to being the best.

I want this in everything I do: in my graphic design work, in my marketing advice, and in my ability as a copywriter and contributor to this forum. It's this approach that got me into the top 10 list of this forum in under ten months.

When I buy shoes, I try to buy the best shoes I can afford. Likewise clothes, books, and pretty much everything else I consume. I slip now and again. My financial wherewithal or my desire to get "it" now sometimes get the better of me, and I'm far from perfect. But generally, I want ... and I believe I have earned ... the right to be the best and to expect this world has to offer. I think everyone is owed this. If you're paying for something, shouldn't it be the best
it can be?

Averages are the norm, they're the middle grand,
they're safe—some might say all too easily predictable.

When it comes to marketing the very LAST thing I want to give (or receive) is messages or benefits or offers
that are average. The average message and average marketing talks to EVERYBODY about the everyday stuff—the mundane, the not-at-all special, the generic. When everyone is your customer NO ONE is your customer.

When I want to buy a new computer I don't want an average computer, I want what I deem to the best: that's why I've used nothing but Apple computers for almost 15 years. Apple's marketing talks to me about the exceptional things I'll do when I use their products. BMW talks to its customers about the incredible driving experience those drivers will have every time they get behind the wheel of their BMW.

If you want EXCEPTIONAL return on your marketing investment, create exceptional marketing that talks to exceptional people (and the trick here is to make the ordinary Joe FEEL exceptional ... because in truth, those people ARE exceptional) about the exceptional things those people will do when they buy, interact with, and use the brand in question.

If you want average ROI, create average marketing that delivers average messages to average people.

I hope this helps.

Gary Bloomer
The Direct Response Marketing Guy™
Wilmington, DE, USA

The thing that would concern me is that you might actually make a decision based on some average. That would be criminal.

By definition, an average includes a whole bunch of elements that are not themselves average. Some would be from companies that have objectives that are at one extreme, others at another extreme. Some will include salaries, some won't. And even if you try to tease all of that out, you'll still have an amalgam of data that are not really comparable to each other or to what you're going to do.

You'll have not just apples and oranges, but figs, raisins, and maybe even a few rocks, and a fish or two. And when you then use whatever average you compute (or, even worse, is computed for you) for decision support, you're more likely to make a bad decision than a good one.

My advice: Determine your own objectives and develop plans to achieve those objectives. Spend what it takes, or adjust your objectives to something you can afford. Don't even think about the ROMI others are getting. It's guaranteed that your ROMI is going to be better than some and worse than others.

And you don't put ROMI in the bank.

Several have beaten me to the punch so I won't beat you up about industry averages and why they are useless to you.

In a way it's like deciding whether your car is new enough by measuring the age of the cars your surrounding neighbors drive. Meaningless.

It would be better to benchmark your marketing metrics and monitor them over time. That way, you can determine if you are getting better or worse, and perhaps which things make you more successful, and which things don't...

Then you can stop doing stuff that doesn't work, and do more of the stuff that does. Makes sense?

Now, as Koen pointed out, creating a database of companies in various industries and developed vs developing countries is an entirely different thing. Measuring how well you are doing versus your key competitors would be interesting at least - maybe valuable knowledge. Especially if your results are better and you are justifying your self, your budget or your salary increase to the board.

Beware, though that is a two-edged sword and it cuts both ways!

Hope that helps!

ChrisB

Thank you all for your replies.

I certainly understand the dangers of judging based on 'industry averages' and that is not my intention. However, I still would like to know the return on investment range marketing departments in B2B (ideally services industry) target.

Building on what Peter said, perhaps the best route is to use my company's internal rate of return (IRR) for investments. Obviously, there are intangibles outside of revenue that are derived from marketing investments, but IRR is something that resonates with financial minded decision makers.

Thank you.
Mary Beth