Are Quick Marketing Gains Reducing Your ROI?
Does your P&L tell you how much your customers trust you?
How engaged your clients are?
Which market segments are working or not?
Customer loyalty?
Client retention?
Memorability?
Your P&L is important and powerful, but it doesn’t give you the full picture of your businesses performance.
The bottom line matters – it shows how much money you’re making at the end of the day (or year).
But the way most business directors approach marketing spend and assess its impact on the bottom line is limiting. It’s limiting your understanding of your marketing investments and, ultimately, your earning potential.
Let me explain.
If we are measuring a three month period of how much we’ve invested in marketing compared to the value of sales we’ve made from those efforts, we’re only seeing one side of a 6-sided cube.
What about the long-term impact of those marketing efforts? What about the momentum we have built in a particular market segment? What about the research and data we’ve attained about a location-specific offer?
Some of the investment you’re making today will bear fruit in the future, but the typical period-set, financial analysis won’t show that.
The appeal of investing in digital advertising is that we can clearly measure our return.
Put in $1, and you expect to get $2 back.
But even digital advertising agencies now recognise that the success of their campaigns depends heavily on the foundations they’re built on.
We’re living in a fast-tracked world and that mentality often carries over into business. The average business owner wants results fast – “how can I get the most return in the least amount of time?”
The problem with this thinking is that it promotes short-term strategies that miss the bigger picture. This is why you end up trying different channels, working with an agency for 6 months, getting no real results, and feeling frustrated.
95% of our clients are in business for the long run.
Wouldn’t it make more sense to plan out your marketing investment over the next 12 to 24 months with a strategic approach, rather than trial and error?
Think about it—who in history went into battle without a plan?
They always mapped out where the cavalry would charge, where the catapults would fire… humans have been planning and strategising since the beginning of time (and if you’re still using catapults in your business – maybe its time to consider automation).
If you’re already planning and forecasting your finances, why take a trial-and-error approach to your marketing spend?
Some might say, “Marketing isn’t my thing, so I leave it to the experts.”
But have you delegated one of your business’s integral wheels to someone who may not be fully invested in your long-term success?
Here’s a sensible, high-level plan of action to get clear on your marketing:
- Get your brand foundations right
Who are we? What do we stand for? What’s our position among competitors? Is our core message memorable enough? - Go through a marketing strategy session
Work with a professional to create a marketing plan with a 6–12 month outlook. They should leverage historical performance and gather plenty of materials before the session. - Think long term when it comes to your marketing investment
Don’t limit yourself by focusing only on short-term ROI. Consider the long-term game: where do you need to go, and what steps (or half-steps) do you need to take to get there?
All business owners know it takes money and resources to scale, so your P&L in times of scaling can actually look terrible in a time of business growth, right?
If this article resonates with you or has sparked any lightbulbs, you’re welcome to add me on LinkedIn and send me a message about your thoughts.
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