What Is ROMI?
How Does It Drive Top-Line Growth?
A 3-Step Methodology
ROMI or Return on Marketing Investment is the contribution...
I hope you and your loved ones are well and staying safe.
In this post, I'd like to expand upon the recent Pittsburgh Technology Council One Mic Stand interview I did with Jonathan Kersting (thanks!) on April 14th.
If you haven't had a chance to check it out, please listen/view here:
Digging deeper into the interview, I'd like to discuss some ideas on how to plan in these uncertain times. It's been more than a month since response to the pandemic caused many businesses, including ours, to rethink the way they work. In this blog, I'd like to touch on a couple of big ideas to keep focusing on what we can influence: Getting ready for the return to a "new normal."
As I noted in one of my weekly LinkedIn posts, the pandemic's effect will be profound. Yesterday, I heard that the futures price of oil was negative. Yes, producers will have to pay "buyers" to take barrels of oil. Unbelievable!
Retail and associated businesses, such as commercial real estate, will see an accelerated decline as the pandemic exacerbated existing trends.
The list goes on. So, where are the safe heavens? How do we pivot our businesses to overcome negative circumstances and place bets on promising futures? In my days at a couple of large public corporations, my teams led the five-year strategic planning process to conduct that exercise. We had the resources to scan markets, test hypotheses, and derive strategies. Some worked, some didn't. We called the process "Green Belt for Growth" and "Market Area Planning." There are many more terms and concepts that describe the same thing.
Because most of us have limited resources compared to large corporations and can't pay hundreds of thousands (sometimes millions) of dollars for consultants to conduct research and make recommendations, we need to create a movement, a group of leaders, willing to work together to get through this crisis. I suggested #MarketingMustGoOn as a place to start.
The idea, to paraphrase one of my best mentors in the industry, is to: Think Strategically, Focus Sharply, and Move Fast.
In a nutshell, it's about focusing on ideal customers rather than blanketing the earth with random messages. The idea is to educate them by being a thought leader. The technique is called inbound marketing. Executing inbound marketing campaigns can be a daunting task. That's why we typically add a layer of automation to make certain we reach the multiple personas (targeted buyers and influencers) we need to be successful in our chosen markets.
That's the most critical part of the journey. Usually, we blow past it and miss the point. The point is to cross-evaluate every product, portfolio and service offering we have (no sacred cows), look for contributions to margin, economic value added (EVA), market share, and the other data sets or measurements we typically use. However, there's a depth to the process that I would recommend: Understanding the real future of that market in 1 2 months, 36 months, and 5+ years.
Why invest in a dead product in a dead market? Well, look around. We do that every day. Courage is the key to being able to think strategically.
COVID-19 just accelerated a trend that I've been watching for quite a while. Traditional outbound marketing had its day. It still has a place but is less effective. When using the term "outbound marketing," I'm referring to trade shows, general advertising, trade advertising, and more. The idea is to promote our brands and products or services in the hope that someone among the people who see the impressions we made will pick up the phone or send an email.
If the pandemic has taught us something, it's that we can work effectively online, via web meetings, and we can research ideas ourselves. Do we really need those days off work going to a forum, expo or convention? Those expenses will become very hard to justify in the foreseeable future.
We need agility. If the way we've been working for the past five weeks is the "new normal," how are we going to get leads in a few weeks when things return to "normal"? If our sales and marketing strategies are highly dependent on client visits, meetings, trade shows, conferences, and generally un-targeted messaging, it's time to rethink a bit.
Remarkably, it really boils down to ROI. I want to walk you through a couple of examples:
As I have explained in some of my podcasts and blogs, it's a journey that needs a captain and strong leadership. In times of crisis, we leaders, need to rise to the challenge. Indeed, we need to take care of the "now" -- our people and our customers -- as best as we can. That called "working in your business". You can get consumed with internal matters and miss the external signals that can help you position your business for growth.
Authentic leadership is the ability to anticipate the future and lead your team toward a new normal. That's called working "on your business." Making the time to think is all it takes. Regardless of where I am and what's happening around me, I still devote 3-4 hours a week to that exercise. It could be a luncheon with someone, attending a webinar, reading a book, brainstorming ideas on a blank piece of paper over a glass of Armagnac. Whatever it takes.
One of the best pieces of advice I ever received was to spend 10% of my time thinking about the future of my business.
If you're interested in taking a deeper dive into imagining the future, I codified the approach we had at big companies into a simple, 6-step process. Read more...
Four weeks ago, in our staff meeting, we talked about the potential impact of COVID-19 on our customers. We looked at brands that stood the test of time and what they did during recessions. There is a high correlation between long-term success and investing in marketing during downturns. Companies that invested in promoting their brands and products or services during challenging times typically emerged stronger than those that pulled back.
I hope that the idea to create a movement #MarketingMustGoOn gives you inspiration and optimism, and that you will join us and share the hashtag with your customers or clients, associates, strategic partners, friends and relatives.
Thanks for taking the time to consider some new ideas, and I look forward to knowing what you think about #MarketingMustGoOn. Just send me a note using the form below, email me. Thank you!
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ROMI or Return on Marketing Investment is the contribution...
Inbound marketing – a business methodology that attracts customers by creating valuable content and experiences...