Return on Investment: the ratio of money gained or lost on an investment relative to the amount of money invested. Pretty easy to measure in a controlled financial environment. Impossible – and potentially dangerous – to measure in a marketing environment.
The long-standing quote from Wanamaker – “I know that half of my marketing is wasted, I just don’t know which half” – is really a brilliant insight.

Issue #1: The core of the problem is that numerous variables that impact the marketing success of an organization cannot be directly measured. Therefore, if you develop a marketing plan based on the concept of ROI, it forces you to focus on measurable tactics like direct response, couponing, and sales promotions. In the meantime, key factors that most strongly influence the brand are ignored. For instance, how do you measure word-of-mouth and buzz, associate behaviors, consumer-generated marketing initiatives, PR, store or product design, product quality, location, cultural differences, innovation, and customer service? In the new age of consumerism, the ROI approach is the wrong approach.

Issue #2: Advertising agencies and most marketing departments don’t really get involved with all this stuff anyway. Agencies can’t make any money on most of this stuff. Marketing departments are too “siloed” to look at the big picture. They get involved with how to spend (waste) money on expensive initiatives like TV advertising. A recent visit to a prestigious European car maker was typical. The head of customer and loyalty marketing has no influence over the service department. Yet, after purchase, the service department is the main point of contact for the car customer. Is this crazy or what??

Solution: Call Cult Marketing and we’ll explain how our approach breaks down the corporate silos and helps you understand and create a holistic brand experience that enhances the entire customer brand experience.

1 reply
  1. Bob Jordan
    Bob Jordan says:

    Interesting, and probably true, but is it reasonable? Every company needs some kind of ROI measure. What’s the answer?

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