I like this question. I also like the related question, “If you had to reduce your marketing spend by $100K, where would you cut?”
To answer either of these questions it’s necessary to have a good understanding of the incremental return on investment (ROI) on each of your marketing activities. I’m always surprised how often that starts with “I think … ” It makes me worry and, as a consultant, probe deeper to see what’s really known vs. what’s just “felt.”
The sad reality is that most B-to-B direct marketers today aren’t working from hard facts in this area. They’re operating from vague experience and gut feel. I’ve seldom seen a spreadsheet produced in response to this question that ranks all marketing investments on the basis of cost, immediate sales, acquisition and near-term value, like a one-, two- or three-year customer value. So I continue to probe. If you spend another $100K on outbound telesales programs, what would you get? How about pay per click? Search engine optimization? Investing in better site functionality? Mailing more prospect catalogs? One by one, I go through the comapny’s list of marketing activities trying to nail down the ROI on the last $100K spent or an estimate of the ROI on the next $100K spent. I’d be happy to see an analysis of short-term ROI, spend X get Y within three or six months. But alas, even that is elusive.
Now before you rush off and say something like, “We have that … ,” take some time and really objectively ask yourself, “Do I do a good job in this multichannel, integrated performance evaluation area … really?” Then I’d recommend you jettison qualitative statements such as, “We do really well in that area,” and commit yourself to hard numbers on a spreadsheet. Rank the various returns of all your multichannel activities. It’s a cleansing exercise. I suspect you’ll find that you have a bias in your allocation that reflects your legacy business. If you started as a cataloger, you’ll probably find you’re predisposed to mailing catalogs. It is, after all, what you know best. If you started as a telephone sales company, you probably overspend there, and so on.
Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fl., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at firstname.lastname@example.org or (954) 383-5221 (direct line).Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services B2B catalog company clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes @ b2bdmi.com or (954) 383-5221
Comments or questions are welcome.