When teams have access to results in real time and are empowered to make fast decisions, a whole new culture starts to take shape, writes Will Lavender. But to truly harness ROMI’s power, they must tick off eight steps.
This article absolutely, positively does not contain ROI jargon or complicated BS on "how to" wrangle real-time data sources, rank the influence of multi-channel experience, or make sense of omni-digital activity in a single environment.
It celebrates the pride and peer respect that a ROMI Culture can inspire within a business environment.
For clarity, return-on-marketing-investment (ROMI) is a sub-metric of ROI and simply measures the effect of marketing and digital effort—empowering smart decisions for future investment.
At its heart, a ROMI Culture measures marketing and digital experience activity right through to the sale, empowering teams to calculate the effect their activities are having on sales. These results form the basis of decision making, future investment, collaboration, and importantly, recognition and celebration.
A ROMI Culture can turn a team into a unified, motivated, brave and proud collective. It flips any work environment into a more exciting and satisfying one; where a hyper-focus on results from campaigns, experiences and channel mixes becomes a team obsession—like following fashion or a football club or tracking a successful investment.
Many people see numbers and reporting as mumbo jumbo or smoke and mirrors, meant for bean counters. A ROMI Culture makes the numbers—like the footie scores—accessible for everyone to see.
This triggers natural human competitiveness to kick in. The numbers become evangelised, and suddenly everyone is interested, even the non-believers. This is how a ROMI Culture begins.
ROMI Culture paybacks
A ROMI Culture empowers teams to:
- Pinpoint the effect that marketing is having across the business and make fast decisions.
- See how different campaigns drive high- or low-quality sales through different channels.
- Select which channels should be used for upcoming programs of work.
- Quantify the value of brand awareness versus sales-focused activity.
- Make fast business-decisions informed by real-time results, instead of putting a finger in the air, relying on research, or following the boss’s gut feeling.
- Quickly share results with Agency partners, so they too can learn and adjust.
- Induct and brief new team members with historical creative campaign, commentary, and results graphs and reports.
When Westpac became focused on ROMI, it doubled its share of home loan lending, from 12% to 24%, improved customer retention and grew its share price as a result. That’s the sort of impact made possible in a ROMI Culture.
Eyes on the prize
The ultimate quest in a ROMI Culture is explaining where sales are coming from. This narrative is the true north; it keeps a ROMI Culture on course.
The combination of campaigns, experiences and channels have varying influences on the sale. It’s now possible to corral technology and real-time data to demonstrate the effects of different media and channel combinations.
This makes the ROMI Culture even more exciting, especially for those involved in shaping marketing and digital channels.
Sometimes, there are blockages that interrupt the measurement journey. For example, if a digital campaign drives traffic to bricks and mortar retail, but there is no way to prove whether the uplift in sales was from the digital activity or the general retail marketing, the solve would be to normalise the base level sales and measure the uplift.
This may sound basic, but these simple workarounds enable end-to-end measurement to be completed. Nirvana will come in time.
Not an impossible task
Wrangling multiple data sources such as CRM, email, Google, Facebook, owned channels, social etc can make a ROMI Culture seem like a gargantuan task.
But it doesn’t need to start that way. At the end of the day, ROMI is just a basic calculation: take the uplift in margin growth, then divide it by the marketing cost. You are left with a ratio, for example, 3:1, where one dollar invested in marketing pays three dollars in sales revenue.
With this single calculation, you are on the way to creating a ROMI Culture. It’s natural to think of ROMI as a problem only solved through sophisticated data and technology. It is about taking one step in measurement, analysing it, then taking another, and then another.
Results take the emotion out of decision making
How often do great campaigns get shelved through client boredom? Or creative campaigns get selected based on personal preferences or gut feel? How many ways are there to kill a brilliant idea—10, 15, 20?
Results provide the answers to most questions and empower people in the trapezoid of business to make better, faster decisions—their own decisions.
Truly, the best creative campaigns last longer; less time is spent researching; and agency creatives comprehend the challenges required to optimise their work.
When ‘marketing’ can use hard data to justify itself in the ‘sales conversation’, it demonstrates it has P&L responsibility; it then commands the respect—and budget—it deserves.
Leaders shape the ROMI Culture
All culture starts at the top, and the ROMI Culture is no different. It’s essential that there are sponsors at an executive level—ideally CMO, head of channel, head of digital, CIO, CTO—each with a mindset to evangelise internal and external data across the business and enable results-based decision-making.
Of course, it’s also important for all creative and media agencies to be be part of the collective in a ROMI Culture. There will never be a greater supporter or contributor to the ROMI Culture than agency partners.
Bringing agencies along on the journey will heighten the potential to evolve activities, test new strategies, support strong creative, and win fame and recognition.
Eight steps to a ROMI Culture
- Everyone on board, most importantly senior execs
- Employ the right tools and track through to the sale in real time
- Establish companywide metrics that define customer buying stages
- Use consistent methods and terminology across the business
- If data gaps exist, make informed assumptions
- Share freely and have open channels
- Build an archive of campaigns, key graphing and commentary
- Don’t stop
Six common problems solved
- What are the optimal channels to reach prime audiences?
- What is the media-mix and channel ranking for future activity?
- What works best to make sales or build awareness?
- When are bigger budgets and investments justified?
- What is the optimal marketing budget per quarter—or for tomorrow?
- Where to focus brand building and sales-focused activity?