In the previous article, we discussed why it is so important for marketers to quantify their marketing efforts during the ROI analysis. Today, we will have a look at some of the tactics you can use to improve ROI.
We prepared a short guideline on how you can optimise your ROI analysis by improving marketing efforts in 4 easy steps.
4 steps on how you can optimize your marketing ROI:
1. Analyse the outcome of past marketing efforts during ROI analysis
At this stage, it is important to define which marketing activities showed positive returns and which efforts did not add any value. Marketing activities which were not that valuable can be reduced. This step should be carried out during the regular ROI analysis.
Marketers should pay attention to this in order to improve the ROI and prevent further financial loss.
Luckily, modern technology and analytics makes it much easier to conduct a detailed and qualitative ROI analysis. Such technologies help to analyse the performance of each marketing activity. Nowadays, most of the marketing KPIs can be measured on a daily basis, which makes it much easier to analyse the effect of each indicator on the marketing ROI.
As a result, regular analysis can help marketers to improve the ROI by allocating efforts in the future to intensify growth or cut expenses.
2. Analyse the external environment: competition and opportunities
This stage of ROI analysis involves competition-examination as well as noting the markets where significant growth is possible (opportunities).
Of course, it is not that easy to analyse the competitors and their performance.
However, it is possible to monitor most competitors’ results and activities with regard to advertising and price promotion. Sometimes financial data is publicly available. In this case, marketers can analyse their competitor’s marketing ROI. This can help to create a thorough image of the main strengths and weaknesses of the competitors and their strategies. The competitor’s ROI analysis should be conducted in addition to the regular one.
As it was mentioned before, in order to improve the ROI, the main opportunities should also be analysed. This step should also be considered during the ROI analysis.
Marketing is an industry where everything changes really fast and you will need to stay updated on the most important trends and innovations. For example, the growing popularity of artificial intelligence has an impact on the marketing industry.
Predictive analytics algorithms can now improve the procedure of forecasting seasonal trends. As an example, AI technologies can help marketers to anticipate the frequency of purchase and consumption depending on the season. Having this in mind, a marketer can plan their strategy more efficiently. As a result, it can help to cut costs and improve ROI.
Simple correlation analysis can also help to identify interesting trends and patterns between indicators. It can also be helpful for ROI analysis as well. By identifying such patterns, new opportunities for marketing activities can be identified.
In addition, it is always important to identify where the greatest opportunities lie. It can depend on current trends or tendencies. After defining such opportunities, the company’s resources can then be adequately allocated to boost further growth.
3. Reallocate marketing resources to sieze new opportunities
This is one of the most crucial stages of ROI analysis. After the internal and external analyses are conducted, it is then important to reallocate marketing resources efficiently.
Unfortunately, many companies count on ineffective ways of allocating resources. Most of the time, the decision is simply made based on the results of the previous year: for instance, the best department gets more funding. Both of these methods are ineffective since they are not based on data.
That is why the decision regarding the allocation of resources should be made on the basis of a data-driven ROI analysis.
4. Make sure there is transparency and responsibility in each marketing activity
Last but not least – the importance of accountability. After a detailed ROI analysis is done in order to improve marketing performance, it is crucial to set the correct and relevant goals as well as KPIs for employees.
Most of the time it can be really hard to estimate the effectiveness of marketing campaigns during ROI analysis. That is why many companies tend to estimate the effectiveness of their marketing performance by looking solely at sales, which of course do not reflect the marketing efforts and have nothing to do with the marketing ROI. In the end, this can lead to problems when it comes to resource allocation in the future. Moreover, it can affect the employees’ motivation.
It is crucial for marketers to define clear goals and key performance indicators (KPIs). Do not forget that the goals should be SMART: specific, measurable, achievable, realistic and timely. SMART goals should be set for each marketing activity.
Only after that should the marketing tasks be assigned. As soon as the goal is reached, responsible employees should be rewarded. It might sound very easy but, unfortunately, many companies forget about that. However, it is important to keep employees engaged and motivated.
Hope this information was useful and you can now implement these easy techniques in your marketing strategy to improve your marketing ROI!