Well, OK…solved kind of.  If you don’t know about marketing ROI then you probably have never worked in marketing or have never hired an agency or have never tried to pitch a marketing concept to a company that doesn’t do any marketing.  You may have hear it phrased:  “How do we know if it’s working?”  or “How do we track results?”  Basically, is your ad/PR program/website/branding program/etc bringing in more than it’s costing the company?

In the BtoB realm, this causes marketing people to really squirm and come up with all kinds of ways justify their budgets.  Some talk about leads rather than results (this puts the pressure on sales.)  Some talk about ROO (Return on Objectives).  Some just talk about the branding potential and dismiss the idea of ROI altogether.

The truth is that there is no easy answer — but there is a process of getting to the answer.  Here it is:

1.) Track where your business is coming from now

I’m continually amazed at how little companies actually do this.  Even to break it down in a simple way by how much is from existing customers and how much from new leads.  How many from phone calls?  How many from email?  How many from the telephone?  There are only so many ways that people can buy something from you so this shouldn’t be that complicated.  But it’s really important to know.  Will this solve the Marketing ROI problem?  No.  That’s why there’s a #2.

2.)  Determine Where and How You Want to Grow

There’s a really funny scene in a play called The Mercury Room where a banner hangs over factory workers that reads: “Work Harder.  Make Fewer Mistakes.”  Many companies approach sales and marketing with the same attitude:  “Get More Leads.  Sell Faster.”  That’s not really a marketing strategy.  If your company is going to grow, how much more can you depend on existing customers?  How much from new customers?  Maybe your existing customer base is shrinking.  How many new customers do you have to bring in to continue upward growth?  If you’re introducing a new product, where do you want interest to come from?  New customers?  Small customers?  Large?  Foreign?  Domestic?  Some will say:  Well, it doesn’t matter.  I just want any business.  That’s great, but do you have an unlimited budget?  Because that’s what you’ll need to succeed.  You need to determine these goals so you can spend wisely.  Will this solve you ROI problem.  No.  That’s where there’s a #3.

3.)  Determine a Clear Path to Each Goal

OK, this can get complicated in explaining, but not in doing.  Every business is different.  If you’re selling online, you might have a pretty simple path:  I want to tell new prospects and existing customers where they can buy from me, get them there, and watch the orders flow in.  For most of us, there is a more length and twisted path.  But you need to determine how you’ll reach the goals you determined above.  Want to increase your business with small users that are all new customers by 20% this year?  Then you’ll have to reach out to them somehow: direct mail, PR, advertising.  Want to increase you business with existing customers by 30% ? Maybe direct mail or a phone call would do.  What action does a prospect take when they read about a new product in a magazine?  Call you?  Go online?  What happens then?  This isn’t easy, but it’s also not impossible.  Determining those paths is going to help you with the next step…

4.)  Determine What You Need to Get There

Call it a marketing plan.  Call it a budget.  Call it whatever, but this is the stage where you lay out the tactics that will move you along the pathways you determined in the last step.  How much is it going to cost to accomplish these goals?  What’s the most cost effective way of doing it?  Who can do it better than you?  What’s the timeline going to be?  What’s it got to be?  By the way, this is where you actually determine ROI! If you need to do A,B, C, D, E, and F to increase new customers by 20%, how much will A, B, C, D, E, and F cost?  How much will 20% earn you?  Are you OK with that ratio?  Is your boss OK with that ratio?  If you’re hiring an agency for any work, you should be telling them your ROI expectations — not asking how they measure ROI.

5.)  Expect Some Failure.  And Plan to Fix It

Good marketing does not work 100% of the time.  Good marketing is nimble enough to modify itself to accomplish its goals.  If something’s not working, change it.  But be targeted.  With the pathways you created, you should be able to pinpoint what isn’t working and modify that element.  Too often companies eliminate a program because they didn’t see results.  That’s like getting a new car because the starter’s gone bad.  Sometimes you need to junk something entirely, but if you haven’t determined the problem you’re just wasting more time and money.

6.)  Trace Success Along Pathways

Look at the pathways you outlined and the goals you determined for each one.  Did you accomplish the goals along the way?  Did each of those goals build on one another and lead to ultimate sales goal?  In other words, if we did A,B, C, D, E, and F, did it lead to 20% increased sales to new customers?

7.)  Sometimes the Big Things Aren’t the Big Things

I’ve had conversations that go like this:

“We’re rebranding the whole company.”

“O.K.  What are you hoping to accomplish?”

“We think it’s time for a change.”

“Is it going increase your sales?”

“Maybe.  We think our customers need to see us in a different light.”

“Great.  So this is aimed at increasing sales with existing customers.”

“Not exactly.  We just need a fresh image.”

“But what are you trying to do.  What are the business goals?”

“We’re going to figure that out after we go through the rebranding process.”

This is really, really wrong and dangerous to a company.  But companies do it all the time.  It’s because a re-branding seems like a big deal.  Launching a new product seems like a big deal.  Going to a trade show seems like a big deal.  But these are really just points along the pathways we just talked about.  They’re not the goal.  Which leads me to the Big Secret.

8.) The Big Secret

The big secret is that most marketing folks — in fact most people in BtoB — approach a company like a sick patient.  They play doctor and prescribe different therapies to fix problems.  Not selling enough?  Rebrand.  Launching a new product?  Write a press release.   Then we scramble to find a way to justify ROI on those medications.  The big secret is that marketing isn’t what you think marketing is. It’s really the whole process of determining business goals, the products and services that will get you there, and the goals and pathways that need to be met and followed to reach the business growth goals.

There isn’t an easy answer here, but the answer also isn’t overly complicated.  Once you determine your business goals you can work  backward to determine your goals and pathways.  You should never set off down marketing path without first outlining what you need to do to be successful.

I’ll close by saying that this takes time.  You need to devote a good deal of time to just determine these goals.  I’ve heard from people that they’re too busy to do this or that they’ll get to it after the next product launch or trade show.  That’s like saying:  “I know I need to drive from New York to LA but I have to finish up driving aimlessly around the country before I can even think about such a big trip.”   That’s insane.  This process, which takes a few days of concentrated effort in planning,  is the main thrust of how you will succeed.  Devote time to do it.  No, really.  You have to…

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