Return on investment (ROI) is our core metric in marketing, and we’re hearing that metric tossed about in conversation more and more lately. It is your measure of whether your campaign or marketing program was a success – in which case, you run it again, or if it was a dud – you try something else next time.
The difficult economic conditions these past couple of years have made strong ROI hard to sustain for most industries. So, improving ROI is part of your daily focus, as marketers.
In an effort to create uplift in revenues from marketing, you use tools to listen to the market, tools to research and generate keywords, and tools to segment the market by demographic factors. You use tools to automate lead acquisition, tools to analyze click streams, and tools to A/B test your sites. You use tools to test your campaigns in browsers, operating systems, and devices, all in an effort to strengthen ROI – you can’t chance a lost sale because the tech guys didn’t change the Flash pop-up to HTML5 for mobile devices. You use social media automation tools, tracking, and last-touch attribution tools to figure out which department is bringing the revenue, retention, savings, etc., to be in line for the budget, resources, promotion, etc., that their strengthening of the ROI deserves.
The 90 Percent Effect
Marketers have never had more help to achieve their goals. The online marketing world is flooded with tools to help you boost return on investment.
The flip side of all this abundance is the danger of focusing on the tools themselves, instead of the mindset that should drive selection and implementation of tools.
Over the past couple of years, as I’ve worked with more VCs and investors (who definitely want a strong ROI), I hear them consistently minimize the role of tools (which are used 90 percent of the time in any average digital marketing campaign) and maximize the mindset of the managers (focused on 10 percent of the time).
Now, to be sure, we live in a world where trying to run a high ROI marketing program without tools is unrealistic. But, take note of the point that VCs consistently put tools as secondary to mindset in boosting ROI.
Many companies do just the opposite. That’s what I call “the 90 percent effect.” In other words, just because they have to use tools 90 percent of the time to run marketing, they assume they need to put their focus on the tools. However, it makes more sense to focus on what really makes a difference. Mindset is the missing element for boosting ROI.
Mindset is a big topic, and you might be unsure what you’re supposed to do with that information. I’ll try to put it in context. Last month, I wrote a column on the “7Ms of Integrated Marketing.” The first element of this framework was mindset. Here’s the definition:
The mindset you hold while creating your campaigns drives the sense of brand that reaches your visitors. Use it to center your strategy. Most managers don’t think deliberately about the mindset they bring to their work, which leaves them trying isolated tactics at random, rather than creating a strategy and then tactics to suit.
The specifics differ for every company, but mindset as referred to here has three elements with a direct impact on your business – exclusivity, empathy, and engagement. Let’s look at them one by one:
- Exclusivity. This is not only important for luxury brands, but for any company wishing to escape the competitive herd. If a higher ROI is your goal, the complex set of marketing tactics you engage in should be, not simply to be competitive, but to make your market develop a preference for your brand over another. Being competitive will weaken your ROI. Being exclusive will strengthen and boost it.
- Empathy. Most marketers think first of what they want to express in a campaign, then find the audience for their idea. For improved ROI, you work the opposite angle, thinking first of the market. This is where use of tools can be powerful, as you keep your mindset focused on consumers’ changing needs and the trends washing through them. With an empathetic mindset, you’ll be able to interpret things you otherwise would miss. You will see the seeds of market demand through use of measurement tools, and have a much deeper appreciation for your target customer. And with such understanding will come the power to move them and boost ROI.
- Engagement. Much has been written on engagement, and I don’t wish to bore you with more of the same. The critical aspect of engagement in a mindset-focused marketing team is to crush all distance between you and your market. This element is closely related to empathy, and requires you to be on an equal plane with your customer, and connect in a deep way. The return on investment for an emotional engagement with consumers is hard to measure, but one that veteran marketers recognize as a solid factor in boosting conversion.
When you have these three mindset elements guiding your marketing strategy, you’ll no longer be a victim of the 90 percent effect. You’ll have a cohesive flow to your team’s marketing efforts, and see the results in improved ROI and connection with your market.
How have you used mindset to center your marketing strategy? I’d love to hear your stories.
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