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Why Return on Marketing Investment (ROMI) Can’t Only Be about Revenue

Marketing leaders are increasingly tasked with calculating how much each dollar spent on marketing delivers in revenue. While revenue is a critical outcome of successful marketing, using it as the only barometer of return on marketing investments (ROMI) is shortsighted and sells the complex B2B marketing ecosystem short.

Helping your executive leadership understand how various investments deliver long-term value (vs. short-term revenue) for the marketing engine—its complex infrastructure, operations and outputs—is necessary to gaining executive alignment and trust, and securing budgetary support.

While revenue is a critical outcome of successful marketing, using it as the only barometer of return on marketing investments is shortsighted.

Four important marketing investment areas and initiatives that generate value beyond top-line revenue include:

1. Marketing Infrastructure

Marketing Infrastructure encompasses the systems, processes and platforms required to support marketing operations. Prime examples of marketing infrastructure include martech, account/contact databases, content management systems (CMS) and analytics tools.

The benefits of spending on infrastructure are predominantly connected with optimizing the effectiveness and efficiency of marketing operations and performance, as well as in increasing the value derived from investments made (vs. generating net-new revenue). Some examples of value derived from infrastructure investments include:

  • Increased operational efficiency as tasks and activities are automated and scaled
    • As an example, investing in Chatbot technology can result in significant time/personnel savings. Every year there are 265 billion customer requests. Businesses spent nearly $1.3 trillion to service these requests: Chatbots can help save up to 30% of these costs.
  • Enhanced martech performance and return through activation of dormant features and functionality and elimination of redundant technology and extraneous seats
  • Improved marketing effectiveness and analytics accuracy and reduction of errors and rework thanks to data cleansing and data standardization
  • Enriched customer experience through personalization delivered via data access, systems integration and deeper segmentation
    • A study conducted by Salesforce found that 52% of B2B customers are likely to switch brands if a company doesn’t personalize communications to their needs. Further, a study by Demand Gen Report found that 70% of B2B buyers are more likely to do business with a company that offers personalized experiences.

2. Brand Building

Many branding elements such as a company’s website, social channels, content and other owned assets play critical supporting roles in revenue-focused activities like Demand Generation and Customer Marketing. And while marketing ROI can be directly connected to revenue for certain brand-building investments, others deliver powerful—yet difficult-to-directly-measure—business value. Common areas of Brand Building value and their data-backed benefits include:

3. Customer Marketing

While investments in Customer Marketing are much easier to tie directly to revenue, many B2B organizations over-rotate on landing new logos versus mining the customers they already have. There are myriad sources of value to be derived from Customer Marketing that are outside of revenue creation and that should be included in any assessment of return, including:

  • Lower customer acquisition costs
    • Acquiring a new customer is anywhere from 5 to 25 times more expensive than retaining an existing one; put another way, selling to a current customer costs 0.04% to 0.2% of what it costs to land a new one.
  • Increased customer retention
  • Greater customer satisfaction
    • Investing in Customer Marketing also ensures that customers feel known and appreciated which, in turn, will increase NPS scores. According to an analysis by the London School of Economics, an average NPS increase by 7 points correlates with a 1% growth in revenue.
  • More customer referrals

4. Demand Marketing

Investments in Demand Marketing are the ones that can be most directly tied to revenue generation; however, this still doesn’t mean it is simple to do. And even if you have developed a solid multi-touch attribution model, overcome the challenge of long sales cycles, determined performance baselines and have sophisticated tracking and measurement systems in place, evaluating these investments only against won revenue can do a disservice to their value. Consider the additional value Demand Marketing delivers:

  • Buyer insight: Downloading content assets, clicking-through ads and emails, attending webinars, watching videos, “liking” social media posts and related buyer engagement provides marketers (and sales, and product development, and executives!) with rich insight into what is important, meaningful and resonant to buyers. This rich intelligence can and should inform brand messaging and positioning, content development, sales outreach, product design and business priorities.
  • Sales-ready leads: According to 6Sense, B2B buyers follow a consistent pattern when making purchase decisions. They spend 70% of their buying journey doing their own research before talking to vendors. Demand Marketing activities play a critical role during that time, not only nurturing and encouraging them along the buying journey but also proactively answering questions, positioning your brand vis-a-vis competitors, addressing concerns, etc., all so that prospects are primed when they finally connect with Sales.

Understanding how marketing investments are performing and whether they are delivering positive returns is extremely important—especially as marketing budgets are squeezed and teams are being charged with doing more with less. At the same time, marketing engines are complex and intricate, and investments that deliver value beyond top-line contributions are how it stays humming. And that’s an executive conversation worth having.