The Difference Between ROI & Marketing Accountability
Maria Peroglino:
Great post, and interesting comment about the CEO versus CMO tenure. As I am... Read Entire Comment
Bas Berkenbosch:
Hello there, Really happy to come across this discussion. What I would like to... Read Entire Comment
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By Bryan Eisenberg - Jun 25 , 2009
I’ve heard my brother Jeffrey explain the difference between ROI (definition) and marketing accountability hundreds of times, but I realized we’ve never shared it in a public forum.
An exchange he had with Brian Carroll on his B2B Lead Generation Blog offers the opportunity.
Brian Carroll writes:
CEOs continue to demand better ROI measurement and accountability from marketers.
As a result there’s been a surge of interest in software and tools to manage the process of lead management, lead nurturing, and lead generation with a greater emphasis on measurability.
In 2005, I wrote a post predicting that lead generation dashboards would become a hot topic, and according to the CMO Council’s 2007 Outlook Report, the time for marketing performance dashboards is now.
Brian continues the post by explaining how many marketers, CEOs, and companies don’t receive maximum value (read: ROI) from these tools:
I think that most sales and marketing professionals recognize that software will not spontaneously generate results, but the allure of easy execution and fast results are difficult to resist. It’s also easy to forget that these systems require a great deal of hands-on input and maintenance to be fully appreciated.
Jeffrey takes it further by posting this comment (emphasis mine):
Measuring the ROI of lead generation isn’t the same thing as full accountability. If marketing is a profitable activity, it still doesn’t mean that what it is communicating to the universe of buyers is building the business. I’ve seen lots of marketers sacrifice early and middle stage buyers because they had to show an immediate ROI on each campaign they ran. Who is accountable for all the potential business they lose by saying the wrong the thing to the right people at the wrong time?
In great form, Brian replies:
I agree with you. I think our “instant gratification” culture is the main culprit. We’re a “Fast Food Nation,” after all.
For example, most CEOs feel that they aren’t getting enough activity at the top of the sales funnel. Marketers are constantly reminded that more leads are needed…now!
So here’s the challenge that most marketers face…they want to think long term but keep getting sucked in by the more immediate and pressing issue of a not having enough high quality sales leads.
We all want our ROI, and we want it now! So who’s to blame? The CEOs who cower to the will of their investors, boards, analysts and media? The investors who applaud short-term returns in their portfolio? The analysts who predict the future success of a company and then punish them for falling short? The media who criticize leaders for thinking long-term?
In addition, we can’t ignore research showing the average tenure of a CEO is six years. But for a marketing leader, it’s less than 24 months. So I think fear plays a role, too.
So many companies are still scraping the bottom end of their sales funnel while many potential prospects are left unsold.
The solution? Take a wider, more complex view of sales and try to persuade prospects at all stages of their buying processes. Also, have a little patience.
Apple is a company that focuses on building long-term value and forgoing short-term ROI. This is in sharp contrast to the many companies that focus on increasing ROI by not only pushing more sales, but also cutting costs.
Apple has sold millions of iPods. Do you remember the package your iPod came in? Did you keep the package, even when you don’t keep any others? I’m sure you realize it wasn’t cheap. If Apple wanted to increase its ROI for the next quarter, it would just reduce the package quality. No one judges an iPod by the package. Or do they?
What’s your company doing to ensure ROI not only for today, but for longer-term marketing accountability?
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Bas Berkenbosch
Posted on June 26th, 2009
Hello there,
Really happy to come across this discussion. What I would like to add is that this question coming from the CEO (or anybody else) stating that he/she needs more sales allways has to be questioned. (Getting more leads is never a problem. Just start from page 1 in the phone directory.) At what price will we achieve this and what is the ROI outcome? Now this is the real work marketing has to come up with. And that is what the tools and the brains are needed for.
The bottom line is that every (marketing) activity (be it acquisition, retention, social media, billboarding, etc.) should be judged by it’s incremental ROI for the company.
Serving any other agenda will never fully add to the bottom line and wil allways leave money on the table. The CEO needs to understand this and educate shareholders.