"So what is the ROI on our marketing strategy?" This is a question that almost every marketer has heard, and if they haven't, their leaders are hearing it. It's a fair ask. Marketing costs money, and you want to know that your investment in Marketing is producing results, and executives often view business results as revenue.
Although marketers today have a deep bench of tools and measures at their fingertips, these tools are designed for the online consumer customer experiences and short buying processes. Suppose you are in the world of long buying processes and complex journeys. In that case, it can be difficult, or impossible, to know what marketing activities along that process influenced a purchase.
Don't fear. There is a solution that will help address this question and help leaders in your company easily relate marketing actions to results. It is called the Return On Objectives (ROO), and it is a better measure to relate Marketing to its impact on the business. ROO is not something I created. Top marketing firms use it to help their clients see the return marketing provides to the organization.
Why Return On Objectives? ROO focuses on tying business goals to key objectives that marketing can influence. Like HR, Legal, Finance, IT, and other functions at a company, we invest in these functions assuming that they will help us achieve our business goal. A ROO plan outlines these business goals and what customers need to believe to achieve these goals. These core beliefs become the Objectives of the marketing strategy and help others align to what Marketing is doing to influence the business goals.
What is unique in this post is the template I'm providing. This template allows you to relate Goals, Assumptions, Objectives, Activities, and Measures into a simple, one-page overview you can walk any executive through. The people asking about ROI typically don't have time for complex decks or briefs, and this one-page overview helps "connect the dots" between Marketing's work and the value it delivers to the organization.
To help you, I've broken down how to use this One Page Return On Objective template with an example of a completed ROO strategy for a hypothetical contract manufacturing services company we'll call Zirk Manufacturing. Let's break it down by section:
GOALS: This section breaks down the top-level company goals. Marketing may not be the ones setting these goals, but they are often the measures in which a business determines it is successful. Think revenue, percentage growth, number of accounts, share price, or other metrics the company uses. You are on the right track if your CEO shares it with investors or employees.
Pro Tip: Goals should always be measurable, so only include items you already have a measure in place. For example, if someone says our goal is to be the "most trusted contract manufacturing company in the area," then you must have a way to measure this. Otherwise, "success" will be subjective.
ASSUMPTIONS: This section is likely the most challenging section of a ROO plan and is the lost link between goals and what marketing can do to help. To achieve any business goal, you need customers, and marketing's job is to reach those customers. The purpose of this section is to document what fundamental beliefs or feelings your potential customers need to have to consider purchasing. Think of core beliefs from the customer's perspective, such as values, trust, safety, quality, compliance, and time. Each Assumption should tie to one or more Goals in the previous section.
Pro Tip: When talking to leaders about this or walking them through the strategy, pause at this section and ask some questions. You want to move on beyond this with alignment.
OBJECTIVES: This is what the whole plan is about. What are Marketing's key objectives to help the company achieve its goals? Think of ways marketing can make buying easier, change perceptions, increase awareness, or remove obstacles. Each Objective should clearly tie to one or more assumptions in the previous section. Although the Assumptions may be the most difficult, the Objectives section is where you should spend the most time as it is where you have the most influence to set the strategy.
Pro Tip: When you have Goals tied to Assumptions and Assumptions tied to Objectives, this builds links between company goals and marketing. Focus on working with leaders on aligning on these three sections before you get into the last two. Not all people asking about ROI will want to get into the details of the previous two sections, so know your audience.
ACTIVITY: This section details the various activities that Marketing will execute to achieve the stated objectives. Depending on your marketing budget and team size, this can be small or too big to fit. You can reference separate content plans or strategies beyond the one-page template for the latter. For example, you may have a whole media plan to bring awareness to a subject. Simply stating, "execute media plan to build quality awareness" should be sufficient. Each activity should clearly tie to one or more Objectives.
METRICS: The last section is the bottom-level measure of our marketing activity. How are we going to measure the success of these activities? This section is where the marketing tools shine and are likely well-engrained in what your team is measuring day-to-day.
Pro Tip: If you don't have a way to measure the success of a marketing activity, I recommend you question why you are doing it. Your activity may be to put in place a measurement, but if you can't measure performance, the best measure you'll have is internal feelings about it, which can vary widely and lead you away from your customers.
CONGRATS! Once you complete all five sections, you have a connected plan between company goals that spur the ROI question in the first place and what marketing is tactically doing to help the company achieve those objectives.
All together it should look like the below:
Finally, you should be able to tell a story about how these all link together for those asking about ROI. For example, if asked, "What is the ROI on our digital marketing strategy?" Your response should look something like the following:
"We focus on a Return on Objective approach, and our goal this year is to support the business in achieving its goals to grow revenue to $175M and acquire 50 new accounts. To do this, we believe customers need to be aware of our service, and our objective to address this customer need is to make it easy to find our services when customers are researching independently online. The actions we take to do this include using our digital marketing spend to drive traffic to our website through search engines and digital advertising. We measure our success in achieving this objective through metrics like web traffic, quote tool use, time on page, and spend per click. This is how our digital marketing influences our strategic goals as a business."
I hope this tool helps you draw a clear path for how marketing helps your organization achieve business results. Here are a few final Pro Tips:
If any section pushes the template to more than one page, you have too much and need to increase focus.
From top to bottom, Marketing has less influence toward the top than toward the bottom. You will need to rely on other stakeholders to help define the top, but others will rely on Marketing to determine the bottom.
You should have fewer bullets in the top Goals and Assumptions areas and more in Activities and Measures. Less at the top will make focusing limited time and resources easier.
Like any strategy, these are meant to be built upon and approved over time, so keep these plans active. Update at least once a year.
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