During a recession everyone hops on the ROI bandwagon as marketing dollars are scarce. As soon as the good times return and the marketing floodgates open, most marketers slide it to the back burner. However, for high-involvement brands ROI analysis is mandatory – in good times and bad times. At Kilgannon, we use a scorecard to make ROI analysis relevant, easily understood, and actionable.
But let’s start with what we mean by a high-involvement brand (HIB). This is a brand that has a long sales cycle and the customer perceives some risk with the purchase. It is the opposite of a consumer packaged-goods impulse purchase. Because of the long sales cycle, marketing investments have a long gestation period, sometimes more than a year. It is highly risky for a marketer to wait until the end of a sales cycle to evaluate the marketing spend. This is why milestones are important — to make sure the marketing stays on track.
Our clients have told us that the scorecard we’ve created has proven to be invaluable. For HIBs, the scorecard is like a breadcrumb trail that leads from the marketing activity to the ultimate sale. This process enables a marketer to see the contributions of each phase of marketing activity. In the early stages of the sales cycle this involves measuring the effectiveness of building brand awareness and attitude.
In the middle stages of the sales cycle, customers are beginning to shop for information about the product. This stage is one of the key differences between HIBs and consumer packaged goods. Since HIBs entail more risk, customers go through a research phase where they shop and learn more about the product before making their purchase decision.
Obtaining metrics on product research activity and how it interacts with your brand is essential to understand your ROI. Web analytics, search results, store traffic, call activity, requests for information, and other lead generation metrics are examples of the type of information that fills the middle stages of the scorecard.
The final area encompasses the more traditional financial metrics, such as sales revenue, market share, share of wallet, and willingness to recommend.
By consolidating all these metrics into one scorecard and trending the results, a marketer can monitor his marketing activities in the short term, while achieving his sales goals in the long term. We encourage every marketer of HIBs to use a scorecard so they can be sure their spend is as efficient as possible.