Vice President, Client Insights & Analytics
If you think everyone loves the confidence that comes from a good, solid metric, think about how you feel when you step on the scale at the doctor’s office. You know you’ll soon be receiving accurate, incontrovertible data, but is it going to make you feel better or worse? In the case of a promotional program’s Return on Marketing Investment (ROMI), some marketers feel hesitant about promulgating a number that is essentially a report card on a promotion they funded and supported. Here are some common mistakes they’re making when it comes to ROMI calculations:
Mistake #1: Postponing a calculation until every scrap of data is collected
Your internal data analytics team may be telling you it’s impossible to make any ROMI calculation without having every possible bit of information in on deck. Not true. Our analytics team at YA makes clearly stated assumptions for the data we don’t have, and then we move forward with the information we do have, which is usually fairly robust. For most marketers, being nimble and willing to take a stand is more important than waiting … and waiting … and waiting for a “final final” answer.
Mistake #2: Assuming it takes a long time to calculate ROMI
If you’ve been relying on your internal data analytics team, you might think that the calculation can take weeks and weeks. (Yeah, that’s what they want you to think.) At YA, our clients have 24/7 access to a program dashboard which includes a ROMI number that’s calculated as soon as an offer closes. You can see our assumptions right there, too, so you know how we arrived at the number.
Mistake #3: Treating ROMI like a number, not a growth opportunity
It may be a number from your recent promotional past, but ROMI is also a planning tool for the future. We use the ROMI numbers that appear on our clients’ dashboard calculator to look across a span of programs and see which ones have high returns vs. lower returns. We analyze all the factors that could be affecting the numbers, including promotion design, timing and reward as a percentage of value.
Case study: Using ROMI to find the right promotional mix
You won’t know what the value of your promotions is unless you measure them, quickly and effectively. We recently worked with a large retailer who had stopped using rebates when they switched their budgeting focus into a loyalty program. But we looked at the numbers and showed them the value rebates had, with validated data that made sense to their team and their management. They’re now considering a re-engagement strategy that combines the two approaches, instead of sticking to their “either or” thinking.
The data we provide helps our clients move from “gut feelings” to “data justified,” and that’s always a good situation for any smart marketer. If you’d like your next promotion to be supported by YA’s speedy and robust analysis, please contact me to start the conversation.