This month only: Save $100 on PRO with code OCTOBER »

Real-World Education for Modern Marketers

Join Over 607,000 Marketing Professionals

Start here!
N E X T
Text:  A A

Planning for 2010? Don't Forget To Include Measurement & ROI!

by   |    |  6 views

Measurement is on everyone's minds these days, isn't it? It's tough not to bump into a marketing or PR pro that isn't under the gun for proof of lead generation, ROI, and more. Since it's the time of year when marketing and PR professionals are gearing up for the New Year and all that comes with it, I thought it might be helpful to provide a recap. (If not, be sure to get the discussion ball rolling in the comments.)

By the way, don't confuse these plans with an overall marketing plan, which includes fun stuff like a situation analysis, marketing strategy, financials, etc. If you need to write a full-blown marketing plan, head here. For industry specific marketing plan samples, go straight here. If you're a MarketingProfs Premium or Premium Plus member, we have developed a marketing plan SmartTool just for you.

During the past year and a half I've written a bunch of posts on how to write solid campaign plans that are measurable and can lead to ROI... Here's a recap:

Writing a Plan: The Basic Elements



  • A goal (One. If you find yourself writing "and" in your goal, you'll probably need two plans)


  • Objectives (as many as needed)


  • Strategies (every objective gets its own strategies)


  • Tactics (every strategy gets its own tactics)


  • A way to measure (Hint: It's partly in the way you write your objectives)


Mapping Out a Basic Campaign Plan


  • Goal


  • Objective 1.1


  • Strategy 1.1


  • Tactic 1.1


  • Strategy 1.2


  • Tactic 1.2


  • Objective 2.1


  • Strategy 2.1


  • Tactic 2.1


  • Strategy 2.2


  • Tactic 2.2


Objective Writing: Four MUST-HAVE Simple Steps To Measurement


  1. A specific desire communication or behavioral effect;


  2. A designated market(s) or public(s) among whom the effect is to be achieved;


  3. The expected level of attainment; and


  4. The timeframe in which those attainments are to occur.


Examples:


  • Objective 1: Generate 30% more website contact us leads from target Market X within 60 days.


  • Objective 2: Grow the Facebook Fan page by 20% in 30-days solely targeting female teens ages 12-16.


  • Objective 3: To reduce negative sentiment of Brand A within target Market X by 15% within six months.


The MAJOR item here is the market... You need to know that or your efforts will be in vain. What do I mean by that? Well, it's great to say increase website leads by 30%, but what if they are the wrong leads? What if they are people who will never buy your product or service?

Another key to success with objectives and measurement is it to first benchmark your previous marketing efforts. If you know that your web traffic for 2009 has been typically X each month, and then you'll have a sense that increasing it by 30% should be about Y.

Planning That Leads to ROI
If your CFO gives you or your department $10 million dollars, they are going to want to know how you spend it and what the return was...it's their job. Just like if you give your money to an investor, you want to know what they made for you, right? The CFO is investing in marketing, so let's help him/her out!

Remember the above tactics? That's where your expenditures come in to play. Simply, tactics cost money. Even if you think social media is free (the tools that is), your time, your agencies' time, etc. isn't free.
Let's take a look at a simple campaign:


  • Goal: To increase sales in 60 days


  • Objective 1: Generate 30% more website contact us leads from target Market X within 60 days.


  • Strategy 1: Drive traffic to our website via online banner ads, direct mail, Facebook ads and sharing links on Twitter.


  • Tactic 1a: Banner ads on XYZ Site


  • Tactic 1b: Direct Mail to ABC List


  • Tactic 1c: Facebook Ads


  • Tactic 1d: Twitter


Calculating expenditures:


  • Banner ads - $5,500 (2 months = $11,000)


  • Direct Mail (agency time, printing, postage, employee time) - $50,000


  • Facebook Ads - $2,500/month (2 months = $5,000)


  • Employee's Facebook Time - $40/hour ($50/hr * 10 hrs/wk * 8 weeks = $4,000)


  • Twitter Tool - Free


  • Employee's Twitter Time - $40/hour ($50/hr * 10 hrs/wk * 8 weeks = $4,000)


TOTAL Costs: $74,000.00
Total Contact Us Leads: 100 (Cost: $740.00 per lead)
Total Sales: 10 totaling $100,000 (Assumption: Product is $10,000 per sale)
ROI: 35%

Simple ROI Calculation: Gain from Investment minus Cost of Investment divided by Cost of Investment (Note: always expressed as a percentage)

$100,000 minus $74,000 divided by $74,000 (35%)

Detailed Management ROI Calculation: Net Profit divided by Sales times Sales divided by Investment
(Note: Two different equations based on rate of profit on sales and rate of capital turnover. Hey, if you can't trust a Marketing textbook, what can you trust?!)

BIG Assumptions:
First this is basic and simple ... marketers know it gets way more complicated than this! Also, to be able to track sales based on this particular campaign, a CRM system is needed. It's also a good idea to have a system in place to track that the specific tactics in this campaign lead to sales...one way to do that is to use codes, Adrefs, etc. And finally, there's the issue of weighting which tactics (if any) actually lead to a particular sale, that's the tricky part. We know as marketers there are a TON of variable that go into why someone decised to buy...this isn't the post for determining that level of detail.

Planning is easy, right?! The point here? Just get started. Take small steps and learn along the way. It's better than not having a plan at all. And more importantly, a plan that's measurable gets you one step closed to proving marketing's value.

What do you think? What would you add/change? How have you written plans or proved ROI?

*************
If you have time on your hands or want specifics, here's a collection of all my posts, slides and/or seminar:

Want to Figure Out Your Social Media ROI? Consider a Plan. (November 24, 2008)
Why Writing Plans Can Be SMART (December 22, 2008)
Logistics of Integrating Twitter into your Existing Marketing & PR (June 15, 2009)
*Includes planning, objectives and ROI
Implementing & Measuring Public Relationships–You can do it! (May 15, 2009)
*Major kudos to Katie Paine here, she's the go-to-source for this topic.
Outputs, Outtakes, Outcomes–Oh, my! (June 29, 2009)
*How to get over everything you feared about writing objectives.
Getting Buy-in with Social Media Measurement: Don't Sweat the Small Stuff (August 20, 2009)
*This is a MarketingProfs seminar that gets into the nitty gritty. (FREE for Premium Plus Members)
Social Media Planning & Measurement (August 21, 2009)
Ten Basic Steps To an Easy AND Effective Crisis Plan (August 27, 2009)
*Throwing this one in for good measure... 'cause you never know when a crisis might hit!


Join over 607,000 marketing professionals, and gain access to thousands of marketing resources! Don't worry ... it's FREE!

WANT TO READ MORE?
SIGN UP TODAY ... IT'S FREE!

We will never sell or rent your email address to anyone. We value your privacy. (We hate spam as much as you do.) See our privacy policy.

Sign in with one of your preferred accounts below:

Loading...

Beth Harte is a marketer, blogger, speaker, communicator, thinker, connector (people & dots), adjunct marketing & PR professor and Director of Marketing at Advent Global Solutions.

Beth has over 15 years of experience in integrated marketing communications, strategic planning, branding, SEO/SEM and five years of experience with social media. Beth speaks on a range of topics including: integrated marketing and communications, public relations, brand monitoring and management, social media measurement & ROI.

Beth's blog, The Harte of Marketing is featured in AdAge's Power 150, a globally recognized ranking of top media and marketing blogs and the MarketingProfs' Daily Fix blog.

You can find Beth here too: Twitter, Facebook, and LinkedIn.

Beth also digs smart people, brilliance, history, the arts, culture, books (historical fiction & business), politics, travel, beer, and cowgirl boots.

Rate this  

Overall rating

  • Not rated yet.

Add a Comment

Comments

  • by Kevin Horne Wed Dec 23, 2009 via blog

    Wow Beth - excellent detail and layout. Not to quibble, but readers should be sure to understand the thing you called a "detailed" ROI calculation is the only one a CFO is going to accept. Since every sale comes with operating costs that are owed to someone (e.g., suppliers, employees) those costs HAVE to be deducted. There is no simple ROI that is done purely on sales/revenues. Final nitpick - doing it on operating margin is sufficient since the net margin (net profit) requires knowing what the company's tax rate is going to be for the year,,,which the CFO doesn't even know! Anyway, great post about a hot topic that just can't get enough attention. Happy New Year!

  • by Beth Harte Wed Dec 23, 2009 via blog

    Kevin, yep you're right... The ROI calculation used SHOULD be the one the CFO wants. ;-) I went basic, maybe TOOO basic just to show the calculation and to get people at least thinking financially. It's better than nothing in some cases... But, that's just one gal's opinion. Happy New Year to you too!

  • by Promotional Products Sun Dec 27, 2009 via blog

    Beth, I appreciate your post. As we head for a new year, I think it is important that we approach it with a much more rounded sense, so as to increase our ROI. Thank you, Keep up the good work

  • by Frank Klesitz Mon Dec 28, 2009 via blog

    Great article - I sent it to all our clients this evening for their 2010 marketing plans we're working on this week. I made a worksheet based on this post that you can use for your clients as well, just send me an email if you'd like the Word document without my sales copy. ;) http://www.docstoc.com/docs/20581696/Social-Media-is-NOT-Free---A-Simple-Wo...

  • by @Edw3rd Tue Jan 12, 2010 via blog

    A major challenge faced by many marketers is isolating the sales units attributable to marketing campaign contacts. The true ROI on an investment is the INCREMENTAL sales due to the investment. In organizations with a sales force or where a contact pre-exists in a crm system, it is difficult at best for the marketing team to cite a return. Most Sales and Channel teams are financially compensated for their efforts and don't like to share credit. I would also caution anyone against measuring versus pure revenue. Measure the Return against Operating or Gross Profits of the specific products/services being sold. The goal is Profit Contribution. And, if you want to be a friend of the CFO, showing ROI as a melded cost average might not have much impact. Try instead, to show comparisons between the various tactics you deployed, and discuss what items can be scaled up, split-tested, toned-down, or otherwise improved so that it is clear you have your hands on the wheel and can manage for growth. If you've got a statistics guru, have them look for interactions between variables. Having one number simply means you have an overall benchmark - and one not easily understood. Showing how you can/will improve it is important in judging the ROI on YOU to a BoD. For anyone looking for textbook examples, search out Don Schultz who provides excellent samples of direct and integrated marketing measurements.

  • by Beth Harte Fri Jan 15, 2010 via blog

    Edw3rd, you are entirely right. I was trying to give basic information to at least get marketers headed in the right direction when it comes to planning and measurement... But you pointed out one of the biggest challenges - A CRM system! There has to be a backend system to capture all of this data. And if markters are using a system to capture responses, clicks, etc. well...

    David Meerman Scott just went on a rant about ROI -- No one is measuring or capturing. I think he's probably right... Do you know what that billboard produced? What about those ads?

    The measurement/ROI discussion is far from over... But like Shel Holtz recently blogged, "If you do your job right, nobody will ask about social media ROI." I think the same probably is true of marketing, PR, etc.

  • by Winston "Dub" Riley Wed Feb 3, 2010 via blog

    Hi Beth. Even though thePuxatony Phil has already appeared and the Oscar nominees are announced, I pulled out this article and dusted it off (amazing how soon we'll call something dusty now?!).

    Actually, this is a good time to be looking at this thinking. We're all feeling the pressure that this year may be harder than last year. Tools and positioning is even more critical as things continue to be ratcheted down further.

    Thanks for laying out something that almost anyone can "tweek" and be ready for a meeting. You help take a lot of the pressure of our jobs away. We just need to crack open Marketing Profs, scroll down to old faithful Beth Harte and click. Voila!

MarketingProfs uses single
sign-on with Facebook, Twitter, Google and others to make subscribing and signing in easier for you. That's it, and nothing more! Rest assured that MarketingProfs: Your data is secure with MarketingProfs SocialSafe!