Measure and manage the ROI

By the past, some campaigns were expensive, with low financial returns on the spendings. Marketers used to be spending like rock stars on big marketing programs, trying to impress the customers. They were saying that marketing produces intangible creative outcomes, which you cannot translate in financial terms.

Nowadays, marketing ROI is a big issue for marketers and the economy. Marketers must be able to justify their expenses. They also need to be able to measure perfectly is the combination of strategy and tactics they are implementing is about to generate the most in terms of profit.

The return on Investment is now possible to measure. It is the net return from a marketing investment divided by the cost of it, and helps us measure the profit generated by investment in marketing activities.

It is still hard to measure. Harder than any other business expenses. If you buy a piece of equipment and then measure the productivity gain, you have the ROI of this investment. In marketing, benefits such as advertising impact can't be put into dollar returns.

A solution was found by some companies to capitalize all marketing performance (brand awareness, sales, or market share) into one marketing dashboard. This dashboard displays all the information needed to implement new strategic programs.

Increasingly, beyond the sole performance of marketing, marketers are using customer centered measures of marketing impact such as customer acquisition, customer retention, customer lifetime value and customer equity. These measures showcase not only sound marketing performance, but also future performance benefiting from stronger customer relationships.

Improving investment in marketing should increase customer value and satisfaction. Thus it improves also customer attraction and customer retention. Finally this delivers an increase in customer lifetime value and customer retention. Customers equity in relation to the cost of marketing determines the return on investment of the marketing program.