In a previous post, I referred to a common question I’m asked about LinkedIn: Does it really work (i.e., will it help me generate sales)? Is there an ROI?
There is no simple equation to say “yes” or “no”. I liken the question to: Does advertising really work. The answer is “yes it can” although sometimes it’s hard to determine a precise correlation between an ad and a sale, or its ROI. This may sound like blasphemy to many marketers. Of course we strive to understand ROI. But creating brand awareness via “less accountable advertising” can be a part of your marketing mix.
So back to LinkedIn. One notion I’ve suggested is LinkedIn’s value equation includes time saved to conduct research. Let me illustrate this point.
I’m looking to crack into the financial services sector with a social media offering. I identified a specific company I felt was a strong prospect to pursue - let’s call them Company X. Using LinkedIn I conducted a search on Company X and located a former employee with 2 degrees of separation.
- So a phone call went into my colleague who knows this person.
- She introduced me via email to the former employee - let’s call him Joe.
- We had an email exchange and set up a phone call.
- I spoke to Joe and not only got the inside scoop on Company X’s use of social media and its marketing department dynamics - but I took the opportunity to ask Joe how social media is being utilized in the financial services sector.
- I learned lots. While Joe was at Company X, he was part of a team that conducted an in-depth competitive review on how competitors were using social media. I learned about successful social media initiatives at various banks, attitudes of marketers in the sector toward social media, top objections to selling Company X on social media services, top blogs in sector for consumer banking, and much more.
- I’m now more prepared to sell to this prospective client.
LinkedIn was the sole reason I located Joe. This chat has saved me hours of research and has provided vital intelligence to help in the sales process. If you’re a VP of sales, how much more productive can your team be if they can identify valuable contacts using LinkedIn? Think about how you can compress the sales cycle.
So my question to LinkedIn pundits and curiosity seekers: What’s the ROI on this experience? Massive!
June 2nd, 2009
Assessing the impact of marketing is often a difficult topic for marketers to address. How does one measure the ultimate impact of an advertising campaign for example? How does one assess the impact of speaking engagements at a seminar? What’s the right time frame to be assessing the results? All good questions and there is only one adequate answer: It depends (I know this is a cop out to some extent).
Based on recent experiences and a review of marketing literature throughout my career, some business owners and executives try to oversimplify their answers. For example, while conducting market research for a client that produces a business publication, I asked business owners and marketing managers how they measure the effectiveness of their advertising with the publication. A common response was: “If it works, I’ll keep advertising”. When asked, “how they know if it’s working”, answers typically included “I get an ROI on the dollars, or it leads directly to sales”. Certainly small business owners must tend to their marketing dollars much more closely than a large business, and I’m all for assessing the relative impact of advertising in different media, but one has to be careful not to take an approach that is too narrow and too short term focused.
A past client provided me with a point of view that was refreshing. I was helping his company develop a brand strategy and marketing plan; and also develop essential marketing collateral that included a web site and brochure material.
Prior to my work with them, this B2B company did not have a formal marketing and sales program, collateral was non existant and past efforts were ad hoc . All business was generated through growing client accounts by word of mouth and personal contacts; and periodically introducing new services to existing clients. I asked him how he would determine if the plan would be effective. Here were the highlights of his response at the time:
1) While the roll out of the program began at the start of a calendar year, he felt he’d need to wait until the Fall of that year to assess the impact of the marketing program.
2) He went through a budgeting process with his leadership team that included projections for sales growth. This was a sales target he felt his team could achieve if they operated status quo. If at the end of his fiscal year, the team exceeded that sales target, he would have largely attributed that difference to the marketing of the firm.
3) If there wasn’t a huge sales lift in year 1 of the program, he would not have panicked. He viewed the year as a learning experience will be a year of learning with respect to marketing.
4) He admitted there are many things that need to go right to achieve growth and make a profit. He planned to develop other metrics that can provide indicators his company was doing the right things.
I’d moved on to other client work before seeing the results of this engagement. I circled back with the client two years after the fact. His company had achieved 50% year over year growth over that 24 month span. While I would have liked for him to state the marketing program we developed was the reason for this growth, he stated the real impact of that work was:
1) The marketing efforts created a tremendous amount of credibility for his company. Before the work began, they did not have an image; nor was there company understood in the marketplace (even by their own clients). The brand strategy helped to reinforce positive attributes of their brand that were recognized by clients; the company had developed an elevator pitch that helped clients better understand their business and marketing collateral provided case studies, client lists and complete service lines that helped their existing clients (and new clients) understand the breadth of their services.
2) He described the marketing work as THE catalyst for their sales and marketing efforts. If nothing else, it generated excitement among his team about the prospects of marketing the company and feeling proud about their story.
If only every executive that hired marketing professionals had this kind of outlook? What’s important to note is my client wasn’t suggesting irresponsible marketing and frivolous spending of dollars. He wanted to get the most bang for his marketing dollar. However, he didn’t expect results in 3-months and defined success from a broader point of view for his company.
So what does this all mean? Deriving the answer to the question: “How will I assess the impact of my marketing dollars” is a personal answer and needs to be placed into context. Here are some key elements to consider before developing your answer:
- Whats’ been my organizations’ past experiences with marketing?
- What’s the right time frame to measure the impact given my situation?
- Where is my business at in it’s life cycle?
- What am I really trying to achieve with marketing?
- How much risk tolerance do I have with respect to my marketing investment?
There are many other elements to consider when trying to answer this question. But hopefully this helps move the conversation beyond cliche answers like: ROI, response rates, cost/lead.
I hope this this story helps you think differently about measuring the impact of a marketing program.
January 8th, 2009
