Review These 3 Elements Before Calculating Your Marketing ROI

Ben Bradley
Ben Bradley

Director of Strategic Accounts - Client Consulting

I am sure you have no doubt heard the phrase “Content is King” when it comes to marketing. This is an undeniable truth. But if content is King, then Marketing ROI is the Emperor. Although subjective by company, ROI is the universal measuring stick that technology marketers are measured against.

As a member TechTarget’s Client Consulting team, my main focus is on helping clients achieve better ROI from their marketing programs, so I thought I would share a few tips to help marketers effectively evaluate their efforts.

Marketing ROI Element #1: Goals

What are the business goals of your marketing program?

marketing roi red flag metricsAre you looking to build brand value, perhaps to become an acquisition target? Are you looking to take market share from competitors? Are you looking to expand your target markets and reach? Different goals will need to be measured by different metrics.

For example, if you are looking to build brand value, a metric of success might pre- and post- surveys to customers and non-customers to understand their brand perception. However, that wouldn’t be the metric of success for a goal of taking market share. Identify the “Red Flag Metrics” that will give you actionable insights.

What tactics are you using to accomplish these business goals?

Let’s be 100% clear: Tactics do not equal Strategy

Common tactics might be Branding, Demand Generation, Lead Nurturing, the list goes on. In fact, there are 20+ tactics marketers use today to reach various goals, with the average buyer using 13 tactics.

Marketers need to understand how different tactics will drive different goals, and as a result, need to be measured differently.  See this handy grid for a listing of tactics/benefits.

Marketing ROI Element #2: Customer Lifetime Value

marketing roi customer value
Source: Carnegie

How you manage your customer relationships over the life of the customer is essential for maintaining marketing ROI. And different business models come with different metrics:


For SaaS models, what is the Churn Rate of your customers? If it is over 5-7% annually, you may need to re-assess your strategy.

Also, many SaaS models apply a “Loss Leader” strategy to getting customers; if that’s the case, you need to look at the return you get at the Account level, not the product level. Many marketers are responsible for a specific product line within a company, but they should all collectively be working toward growing the success of the company. Don’t short your success and impact by looking too narrowly at the marketing ROI from just 1 product line.

What are the cross sell, or upsell opportunities once you have earned a customer? Measuring these opportunities can be applicable to Saas, but is  critical for non-Saas and traditional hardware models. If done right and focused on value, up-selling tactics can lead to more sales upwards of 20% of the time.

Marketing ROI Element #3: Attribution Models

We need to accept the fact that technology buying requires research – lots of it.

With so many online resources to consult, buyers across all spectrums are more informed these days. For example, when was the last time you walked on to a car lot and bought a car without consulting any resources such as Kelley Blue Book, Edmunds, or the millions of car owner forums that exist out there? Can’t remember? Probably because the average consumer uses 10.7 sources of information before buying.

Technology buyers are no different, viewing 4+ vendor assets before putting a vendor on a short list, and navigating up to 70% of the buy cycle before talking to you. (If you read this blog regularly this likely isn’t news but it’s the foundation that the multi-attribution model is built on)

Are you processing all this in your attribution model? To track accurate Technology Buying ROI, marketers need to implement a multi-attribution model to follow the research process of buyers. Single attribution models are dead. The multi-attribution will attach value to each of the many engagements a user has across the entire buy cycle. You must holistically evaluate how these touches have impacted a buying decision

And, similarly, focusing on or weighting success on any single metrics is often short-sighted without fully understanding how they impact the outcome or value delivered to the business. Marketing and analytics guru Avinash Kaushik recently illustrated this concept relative to search advertising:

Never, ever, never obsess this much about CPCs. Yes, cost per click is metric. But if you had to obsess about something, obsess about the value delivered to the business. You will never obsess about the cost per trade of your E-Trade portfolio, right? It could go down from $10 per trade to $1, and you could have completely gone bankrupt as a result of your trades. So, don’t obsess about CPC. Focus on Economic Value from your search advertising. Focus on Profit from your search advertising. Focus on the outcome. As long as you make a profit, does it matter if your CPC is $1 or $200? And would it matter if your CPC went from $200 to $1 if you were making no profit?

This highlights how easy it can be to focus on the wrong metrics – CPL, or other front end metrics that have a minimum impact  on measuring the true value delivered. We are overwhelmed at times with the volume of metrics and data to look at, but the key to being intelligence driven marketers and more importantly, ROI driven marketers, is the ability to focus on the metrics that matter most, such as aforementioned “Red Flag Metrics” .

The key to being a successful digital marketer is being able to focus on and identify the right metrics. Of course there are many other metrics and considerations to view than I have covered here, but in my opinion, these are 3 core elements marketers need to address before they can start to calculate marketing ROI.

If you have any insight to add to this discussion, feel free to leave a comment, or you can connect with me on Twitter, LinkedIn, or Google+.

analytics, B2B marketing tactics, CRM, Customer Engagement, marketing goals, Marketing ROI, marketing tactics, metrics

Contact Sales