The best marketers know that the real purpose of assessing return on advertising spend (ROAS) is not just to count coins or track effectiveness—it’s much more ambitious than that. The purpose of understanding ROAS is to increase the top line and create the best possible customer experience.
You would think that, in this age of analytics, understanding ROAS would be easier than ever. Instead, we’re often drowning in data, and at the same time, unwilling to let go of old habits when determining budgets and allocating dollars.
I’ve spent the past 10 years measuring, testing, and trying to identify the optimal combination of tactics with my teams at Avaya, Cablevision, and Time Warner Cable. The strategy that will work today, I’ve learned, has an outside-in focus that keeps the customer at its center. It comes down to a few simple points.
- Break down the silos. Typically, the marketing budget pie chart is carved up into direct mail, print or publication, brand, digital, and so on. The people responsible for spending those dollars tend to be segmented by skill set, each using their expertise to maximize their particular channel. But your customers are not in silos, they are everywhere—on every channel, device, and platform. Your people need to understand not only what’s working in their own area, but what combination of tactics is working best. Then, the allocation of dollars on the pie chart—which generally has a lot of fluidity—can be moved around as needed.The key here is to organize your teams in a customer-facing way. At one major cable company, I created teams dedicated to small business customers, mid-market customers and enterprise customers. Instead of focusing on their particular channels or areas of expertise, the marketing teams learned to see customers through the same lens, and to understand the target groups’ preferences in order to maximize results. We were able to increase conversion by nearly 20 percent and wallet share by over 50 percent.
- Know where your customers are, and show up there. This means tracking the route they take to get to you, from start to finish—in other words, having full-channel attribution. Sounds obvious, but it can be really challenging in the world of multimedia, multi-channel, globalization, killer apps, and a lack of customer loyalty.Many of the touchpoints you want to track will, of course, be digital. But with geo-targeting and IP tracking capability you can also determine, with a fairly high confidence factor, the impact of your out-of-home advertising, your TV and radio ads, and your direct marketing mail. It is essential to do this in order to understand the impact of your efforts throughout the entire buying journey. For example, let’s say you send a direct mail piece about your product, and it sits around the customers’ houses for a few weeks. Perhaps only five in 500 of those people call the phone number you created for that piece. If you look at that figure in a silo, you might think the piece was a failure. But if you have the whole picture of the customer’s journey, you may see that the direct mail piece was an important influencer at the top of the funnel, and that those who received it were much more likely to go online to learn more about the product.That’s the kind of insight you can get by having a holistic view. Ask your digital agency if they can show you the real, complete path of a user, across domains and devices, without relying on modeling (which can create assumptions on top of assumptions, and we all know where that leads). Let the data determine the model, not the model determine the data.
- Measure consistently. Keep track of the conversion metrics you are focused on, whether those are purchases, enrollments, or something else. Set up weekly reviews to see what tactics need to expand or contract so you can dynamically reallocate your budget. Usually, success is not about making complete changeouts, but about iterating and fine-tuning.Yes, I said reallocate weekly. Near real-time data is here, and failing to leverage it is a huge missed opportunity. The days when quarterly reallocations were sufficient are over.
- Prioritize ruthlessly. Most marketers have many tactics going on at any given time, all documented on an Excel spreadsheet that’s two feet wide and two feet long. But everything on the spreadsheet can’t be important. My teams probably got sick of my asking, “What are the five tactics we always need to be using?” Keep asking yourself where you must show up all the time, and then you can create fluidity around the rest of it. Use your data to direct you and your instincts to take action.
While you’re incorporating these best practices, know that you’re not only serving your company’s top line—you’re serving the customer. People want to be sold to when your product or service is right for them. If you understand how your buyer is buying, you can show up at the right place at the right time. You’re making the buyer’s life easier—and creating a great customer experience on the journey to your doorstep.
Stephanie Anderson is chief marketing and strategy officer at Ai Media Group, a New York City–based media company that specializes in defining, managing, and executing online marketing strategies. She is also the NYC chapter president of The CMO Club.