Why Am I Obsessed with ROI?
Whether as an employee or as a business owner I still believe in counting the pennies.
Marketing is always a bit of an unknown in terms of expense. You take a gamble with every marketing dollar because there are really no guarantees in terms of generating revenue. Whether I am looking at digital or traditional media, the best that can be done when planning a campaign is an educated guess. There is nothing wrong with that, as long as you make certain your results are NOT a guess. Documenting results for a marketing campaign is essential to building experience and a foundation for future improved results.
As a business owner you want to avoid the “hype trap” of following the flavor of the month in marketing/advertising and focus on results. ROI is your friend. We have a saying at my current dealership group, “the numbers don’t lie” and we live by that. Our operation is lean in a lot of ways, but yet we still spend generously compared to other powersports dealerships of similar size.
So why do I say we are lean? By being lean I am saying that we have specific demands that are expected of our marketing campaigns, all to meet our goal of $150 in total marketing spend per unit sale. In order to meet that goal we have to look at a whole set of sub-goals that build up to that unit sale. At a very basic level we look at CPC on the digital side (Cost Per Click). I shoot for a very low CPC of <$.15 and often we are able to land clicks at below .10, even as low as .07. Tell that to your marketing team and they will look at you like you’ve lost your mind.
Quality of that traffic is the next key issue and you MUST accurately understand and track this number. Traffic is irrelevant unless it generates real, hard leads. In our business, that also means leads from people who can actually buy a motorcycle. While iMotorsports is one of the few sub-prime dealers in the Midwest, we still look to bring in traffic from people with good income and good credit scores. Do we track this? Of course.
Every marketing channel is evaluated in terms of cost for gross traffic and cost per lead (conversion) and sale. Once this is known then its easy to be generous. When I can hit my goals then it is easy to justify spending several thousand on a campaign because I can prove how many sales were made and now much revenue was generated.
As a marketing director that’s how you get your sales team to buy you drinks and your owner to buy you dinner.