How to Evaluate Your Marketing Mix
Marketing budgets can be invested in dozens of different ways and places.
Instead of pointing fingers at managers and company owners for making "mistakes" with their money, we should be more open minded and view potential marketing investments on the basis of several key analytical dimensions.
What is the reach?
- What is the typical ROI?
- How reliable is attribution?
- What is the risk from any fallout?
- What is the "signaling bonus"?
- What is the "strategic burden"?
To add some detail to the above, "signaling bonus" is my term for a form of marketing serendipity where a tactic has unexpected additional benefits. A unique work culture leads not only to greater productivity, but admiration in the press. An expensive-looking billboard campaign or golf tournament sponsorship not only reaches customers, but positions your company so that potential partners and investors take you seriously.
As for "strategic burden," companies often underestimate the time, budget, and complexity of implementing tactics that require an integrated strategy. What appears to be a simple tactic turns out to be a much bigger challenge. This strategic burden often comes to light in the midst of projects like website redesigns, for example, and it seems to explain why more "modular" tactics are implemented when other types of projects flounder.
Let's undertake an exercise in strategy planning, using these marketing tactics as examples.
|Marketing Allocation Playbook: Evaluating Options|
|Social media presence||↑↑||Infra||Uncertain||Strategic||In-house||High||High|
Trade show exhibits/
|Note: ↑ = good; ↑↑ = excellent; ↓=low; Infra=infrastructure|
|Source: Andrew Goodman|
In assessing whether a tactic offers a high ROI based on observed experience, you can plug in case studies or your own results. In this table, one or two up or down arrows would denote either good or low ROI.
But ROI isn't always the issue. Building airports, for instance, is a prerequisite to having air travel in a nation. Or buying diapers is part of parenthood. In each case, the investment pays for basic infrastructure.
So, costs to operate your company website may fall into the infrastructure category. Measuring the ROI on having a proper website then would be like measuring the ROI for having sufficient oxygen in the air you breathe.
Zappos, and other clever "unmarketers," are actually a bit disingenuous when they say they don't evaluate customer service costs based on ROI. Anecdotes about their longest ever customer service phone call (7.5 hours) are an approach to creating positive word of mouth and signaling effects. Amplifying their company culture by talking about it is a secondary side effect that only adds to the loyalty effect achieved with the customer service practices themselves.
Looking at seven potential attributes of marketing tactics, it's now possible to go down the list of, say, seven core digital marketing competencies, and add in five other interesting and useful tactics to arrive at a dozen potential investments to be compared along those seven dimensions. Now, instead of a dismissive comment like "I didn't see the ROI there," you'd be willing to concede that many businesses have made use of the tactic appropriately, based on their (usually tacit) assessment of reach, ROI, facility of attribution, strategy orientation, ease of outsourcing, risk calculation, and signaling bonus.
Next time, let's more closely review approaches to evaluating tactics.
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Evaluating Marketing Mix Exercise was originally posted by ClickZ.