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There’s More to Marketing ROI (Return On Investment) than Meets the Eye

All too often people look at marketing ROI in terms of response rate: in other words, “I sent out 10,000 pieces of direct mail and only got 39 responses which is terrible.” This is wrong think.

When it comes to marketing ROI, you have to realize that the term means Return On Investment and the return is measured in dollars (or your local currency). Let’s say you spend $2,000 to get out a bulk mailing of 5,000 pieces and you get 10 calls as a result. Doesn’t look like much. But of these 10 calls you close 6 and get immediate sales of $12,000. That’s marketing ROI! And that’s not even taking into account the future sales to those 6 new customers. It could add up to hundreds of thousands of dollars.

The same simple mathematics apply to any other marketing efforts: radio ads, press releases or articles in magazines, print ads, yellow pages, web site, etc.

Obviously you need to keep track of response from each marketing campaign you do so that you can weed out unsuccessful campaigns and strengthen successful ones.

Case in point:

Jeff Lee, CFO of a very successful consulting company, Measurable Solutions, has adopted a successful small business marketing strategy based on direct mail marketing. Key elements are mailing out a newspaper and full color postcards. The design is done in house and the printing and mailing is done by a specialized postcard printing company. In his own words…

“We get our best response from mailing out a newspaper and back it up with postcards. Depends on the postcards. Some postcards have pulled better than others.

“The professionalism of the postcards is something that is effective: it gets attention, it keeps the image that we want to keep, it creates the reach, it creates the response and keeps our leads in a very high range.

“We probably average around 7,500 post cards per week. Out of 7,500 post cards we’ll get in an average of 15-20 leads. Of the 15-20 leads at least a third of them come to our introductory seminar. So say 5 or 7 people show up and they pay $1,700 a piece. Off of that we close a further $30-40,000 for services.

“The money we have put into the postcards is like a drop in a bucket compared to what we get back. We know that the more promotion we send out, the more return we’re going to get. It always works.”

That is excellent marketing ROI. Measurable Solutions spend about $2,275 for 7,500 full color post cards. That includes printing, postage, mailing (including the mailing list). From that they get between $8,500 and $11,900 in immediate response for an introductory seminar and an additional $30-40,000 follow-up sales.

Spend $2,275, earn $40-50,000. You don’t need to have majored in advanced math and rocket science to work that one out: that is what is meant by marketing ROI!

Results of direct mail marketing vary from business to business but the principle holds and always works: if you send out enough promotion, you will make sales and maximize your marketing ROI. Don’t worry about response rate if your marketing ROI is high.

About the Author

Joy Gendusa founded PostcardMania in 1998, her only assets a computer and a phone. By 2005 the company did over $12 million in sales, employed over 100 people and made Inc. Magazine’s prestigious Inc 500 List as the one of the 500 fastest growing companies in the nation. She attributes her explosive growth to her ability to choose incredible staff and her innate marketing savvy. As an Expert Author, she is always willing to share her marketing advice through articles, interviews and speaking engagements. Visit her web site at www.postcardmania.com

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Shopper Intimacy: A Practical Guide to Leveraging Marketing Intelligence to Drive Retail Success $27.99 Retail marketing is undergoing cataclysmic change, driven by upheavals in media, consumer attitudes, and the retail industry itself. Retailers know they must invest more heavily in marketing, both to build brands and to drive sales. But how? In Shopper Intimacy, two leading experts offer the first comprehensive, research-based guide to building winning retail marketing programs. Drawing on a decade of customer research, the authors introduce: A start-to-finish system for planning and executing effective campaigns. Powerful new tools for influencing shopper behavior and driving better results. Practical, workable techniques for measuring performance – including a breakthrough approach for measuring ROI from the standpoint of all stakeholders. Best practices models for integrating internal and syndicated research. Trend analysis to help retailers chart the future trajectory of marketing, and position themselves appropriately.Shopper Intimacy contains extensive case studies, charts, pictures, and illustrations designed to deepen marketers’ understanding. Above all, it presents practical learnings that cut across all retail segments, with data to support the authors’ conclusions, and techniques for successfully applying them.

Shopper Intimacy: A Practical Guide to Leveraging Marketing Intelligence to Drive Retail Success $34.99 Retail marketing is undergoing cataclysmic change, driven by upheavals in media, consumer attitudes, and the retail industry itself. Retailers know they must invest more heavily in marketing, both to build brands and to drive sales. But how? In Shopper Intimacy, two leading experts offer the first comprehensive, research-based guide to building winning retail marketing programs. Drawing on a decade of customer research, the authors introduce: A start-to-finish system for planning and executing effective campaigns. Powerful new tools for influencing shopper behavior and driving better results. Practical, workable techniques for measuring performance – including a breakthrough approach for measuring ROI from the standpoint of all stakeholders. Best practices models for integrating internal and syndicated research. Trend analysis to help retailers chart the future trajectory of marketing, and position themselves appropriately. Shopper Intimacy contains extensive case studies, charts, pictures, and illustrations designed to deepen marketers’ understanding. Above all, it presents practical learnings that cut across all retail segments, with data to support the authors’ conclusions, and techniques for successfully applying them.

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Social Media Analytics: Effective Tools for Building, Intrepreting, and Using Metrics $18.69 New – The tools for measuring socia-media marketing ROI – and aligning results with business strategy

Social Media Metrics: How to Measure and Optimize Your Marketing Investment $24.95 Measure the success of your social media business strategyFilling a key need for serious online marketers, Social Media Metrics gives you an A–Z guide to using data to drive your social media marketing efforts. Inside you’ll find how best to assess your Twitter and Facebook followings (hint: more is not always better), how to maximize your social media ROI, how to use social media metrics to effectively make your case to skeptics, and much more. Filled with the numbers that matter and specific examples of how to use them, Social Media Metrics equips you to successfully market on the social Web.”Jim Sterne has been at the cutting edge of this industry since before there even was an industry. If you’re focused on measurement, you need his take on it.”—Seth Godin, author, Linchpin”Companies know they must have a social strategy, yet when approaching emerging technologies, measuring ROI is a challenge. Thankfully, we’ve got Social Media Metrics, in which Jim provides actionable frameworks and how-tos. This is a desktop reference that professionals should keep in close reach.”—Jeremiah Owyang, Web strategist”Jim Sterne has been in the business of teaching us how to measure the immeasurable for fifteen years. With this wonderful book, he brings his wisdom to the problem du jour: social media. In a faith-based medium, you’ll learn how to be data driven!”—Avinash Kaushik, author, Web Analytics 2.0

Social Media Metrics: How to Measure and Optimize Your Marketing Investment $24.95 Measure the success of your social media business strategyFilling a key need for serious online marketers, Social Media Metrics gives you an A–Z guide to using data to drive your social media marketing efforts. Inside you’ll find how best to assess your Twitter and Facebook followings (hint: more is not always better), how to maximize your social media ROI, how to use social media metrics to effectively make your case to skeptics, and much more. Filled with the numbers that matter and specific examples of how to use them, Social Media Metrics equips you to successfully market on the social Web.”Jim Sterne has been at the cutting edge of this industry since before there even was an industry. If you’re focused on measurement, you need his take on it.”—Seth Godin, author, Linchpin”Companies know they must have a social strategy, yet when approaching emerging technologies, measuring ROI is a challenge. Thankfully, we’ve got Social Media Metrics, in which Jim provides actionable frameworks and how-tos. This is a desktop reference that professionals should keep in close reach.”—Jeremiah Owyang, Web strategist”Jim Sterne has been in the business of teaching us how to measure the immeasurable for fifteen years. With this wonderful book, he brings his wisdom to the problem du jour: social media. In a faith-based medium, you’ll learn how to be data driven!”—Avinash Kaushik, author, Web Analytics 2.0

Social Media ROI: Managing and Measuring Social Media Efforts in Your Organization $11.04 Use Social and Viral Technologies to Supercharge Your Customer Service! Use this book to bring true business discipline to your social media program and align with your organization’s goals. Top branding and marketing expert Olivier Blanchard brings together new best practices for strategy, planning, execution, measurement, analysis, and optimization. You will learn how to define the financial and nonfinancial business impacts you are aiming for—and achieve them. Social Media ROI delivers practical solutions for everything from structuring programs to attracting followers, defining metrics to managing crises. Whether you are in a startup or a global enterprise, this book will help you gain more value from every dime you invest in social media.You’ll learn how to: Align social communications with broader business goals and functions Plan for effective performance measurement Establish clarity of vision, purpose, and execution Implement guidelines and operations for effectively managing social media Get started by “listening before talking” Integrate social media into long-term marketing programs, short-term campaigns, and brand initiatives Use social media to deliver real-time, optimized customer support Leverage mobility and the “on-the-fly” social media culture Measure FRY (Frequency, Reach, and Yield)

Social Media ROI: Managing and Measuring Social Media Efforts in Your Organization $19.99 Use Social and Viral Technologies to Supercharge Your Customer Service! Use this book to bring true business discipline to your social media program and align with your organization’s goals. Top branding and marketing expert Olivier Blanchard brings together new best practices for strategy, planning, execution, measurement, analysis, and optimization. You will learn how to define the financial and nonfinancial business impacts you are aiming for—and achieve them. Social Media ROI delivers practical solutions for everything from structuring programs to attracting followers, defining metrics to managing crises. Whether you are in a startup or a global enterprise, this book will help you gain more value from every dime you invest in social media.You’ll learn how to: Align social communications with broader business goals and functions Plan for effective performance measurement Establish clarity of vision, purpose, and execution Implement guidelines and operations for effectively managing social media Get started by “listening before talking” Integrate social media into long-term marketing programs, short-term campaigns, and brand initiatives Use social media to deliver real-time, optimized customer support Leverage mobility and the “on-the-fly” social media culture Measure FRY (Frequency, Reach, and Yield)

The Buck Starts Here: Roi-Based Sales and Marketing Made Easy $35.95 New – Based on a highly successful training program, this book looks at sales and marketing issues from a president’s point of view. It provides step-by-step processes to measure the effectiveness and the cost of specific programs. Programs for penetrating new markets, introducing new products. leveraging resources, evaluating performance, measuring return on investment, and more are detailed.

The Buck Starts Here: Roi-Based Sales and Marketing Made Easy $26.86 New – Based on a highly successful training program, this book looks at sales and marketing issues from a president’s point of view. It provides step-by-step processes to measure the effectiveness and the cost of specific programs. Programs for penetrating new markets, introducing new products. leveraging resources, evaluating performance, measuring return on investment, and more are detailed.