Return on investment is top of mind for marketers these days as most marketing efforts come under the scrutiny of ROI justification.
Here are a few insights gleaned from an interview with Jim Lenskold, President of the Lenskold Group, about how to improve and optimize the measurement of marketing ROI:
1. The biggest challenge in improving marketing ROI is removing cultural barriers and instilling a sense of discipline in planning and assessing the financial contribution of marketing.
2. Marketing strategies that do a better job targeting higher value, higher converting segments have the greatest impact on ROI.
3. Measurements that use market testing and modeling are most conclusive and often under-utilized when measuring marketing effectiveness.
4. Choosing measurements that provide insight about how to improve future initiatives is the most important step in generating greater performance and profitability.
5. Using revenue instead of profits as the return is a basic financial error that marketers make. It must be corrected for accurate ROI calculations and credibility with executives.