How much of your profit is traceable? How many sales can you attribute to their original marketing methods? Tracing your Return on Investment has always been difficult, but that all changed with digital marketing.
You will never be able to prove ROI
It was hard to prove particular marketing tactics were successful prior to the internet, other than in sheer sales numbers. I’ve worked for big TV, phone and gaming brands and we struggled to really isolate what particular marketing tactics were effective, versus ones that were a waste of money, because everything was ‘on’ all the time. We had gut feeling, anecdotal feedback, focus groups, commissioned industry research and sales figures. If sales were going up, then the higher-ups would let us spend millions on whatever we thought would turn the dial, even if we couldn’t prove it would, before or after.
Even with all the TV research, ratings, TARPs, etc – no one truly knows if their old-fashioned advertising efforts are effective, or what makes a person purchase widget A, versus widget B, and it’s likely to be related to what researchers suggest as hundreds of tiny decisions, comprising and stemming of a complex web of values, upbringing, socio-economic issues, emotional triggers, education, level of research, past experiences, peer referrals, religion, aspirations... The list goes on.
But Google and his mates Facebook, Twitter, Instagram & LinkedIn changed all of that. We can’t read people’s minds with these tools, but we’re as close as we’ll ever be (or want to be). If you’re running a decent CRM, then all your website traffic can be traced down to the dollar of revenue it creates. We know what EVERYONE is doing on our sites, social media and search engines. We can tabulate up, every month, what every dollar we spend in search and social media generates for our iSeekplant and our customers.
We know the customer journey including how many times they visit our site, how many products they view when they are there, how many times they return before they buy. I’m sure people who will vehemently defend their right to waste money at industry events will be keen to offer examples of guys that have walked past the stand, only to purchase the following week or month – but was that one sale worth it? Can you actually prove any others happened? Can you prove that the customer went away, thought about it for 6 months and then came back to buy? Can you prove this activity, on its own, was effective in closing a hard dollar figure in sales? Because based on the cost of it, you have to be incredibly sure that it’s producing a hard revenue result, otherwise your decision to set fire to your cash is indefensible.
But you can’t, and you won’t ever be able to and that’s fine, if you’ve got more money than sense. If you care about what you invest in building your business, and what it generates in returns, then you need more information about ROI from your marketing mediums, and you’ll NEVER get it from an expo. But if you spend it online, and you stay on top of your analytics, then you’ll be able to attribute every cent you invested, to the many many dollars generated in return.