MARKETING ROI
Why Marketers Must
Learn How To Measure
By Sharon Kiggundu
O
ne morning I was put to task
infront a group of people who
really relate marketing with sales
only, and the question thrown at me was
‘people ask what artists do the whole day
and sale, but what about marketers? What
do marketers do the whole day?’
Whereas I was excited to answer what
marketing is all about, I knew I had a
bigger challenge of explaining the various
components of marketing and how they
all come together to serve the customer
who is the bottom line. As I assembled
my answer, another person asked, ‘why
is it hard for marketing people to justify
their time and the money spent?’
The above questions are part of our daily
challenges as marketers and yet we still
struggle to justify marketing investment
to the shareholders. Increasingly the
shareholders and management teams are
upping the pressure on justification of
marketing spend.
As Procter & Gamble’s Chief Marketing
Officer said, ‘Marketing is a $450 billion
industry, and we are making decisions with
less data and discipline than we apply to
$100,000 decisions in other aspects of our
business.” This is the time for marketers
to wake up and begin measuring whatever
activity they invest is.
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A marketer’s number one job is to
understand the organization’s strategy.
Subsequently all the activity plans
must then be aligned with the overall
organizational strategy and this will affect
the type of sponsorships, corporate social
investments, promotions, partnerships
that the marketer will make to achieve
the bigger goal.
For each of the activities, there’s a metric
to measure and this gives you the ability
to re-align your resources both people and
finances to activities that you give more
value. If you’re in the banking sector and
you donate trees to a community, it’s a
very good initiative but not great to give
you value compared to another bank that
will offer financial literacy skills training
as this is well aligned with most banks
strategies and how you measure that
return on investment is what will give
your organization edge over competitors.
A couple of metrics have been discussed
in the book by Paul W. Farris, Marketing
Metrics: The Definitive Guide to
Measuring Marketing Performance and
this can be the starting point for many
marketers alongside other measures.
Some of the useful metrics marketers can
use for example to measure sponsorships
value include the number of sales made
out of the event/sponsorships, the amount
of media exposure (organic and paid) and
increased brand awareness.
How an activity will be measured should
be critical in the planning process and if
you can’t measure it then it isn’t worth
exploring. Marketing function can only
justify their spend and benefits through
using both financial and non-financial
metrics when demonstrating to their
finance colleagues the relationship
between their activities and organizational
outcomes.
In addition to an increase in influence
within organizations, the marketing
function could benefit from a favorable
budget share and timely approvals for new
marketing initiatives when it is perceived
as having the ability to measure return on
marketing investments.
Sharon Kiggundu is a Brand and Sales
Support Manager, FINCA Uganda Limited
(MDI), and Vice President, Uganda
Marketers Society (UMS). You can engage
her on this or related matters via email at:
[email protected]