Sometimes trying something new and investing in things you think your audience will like pays off.

And sometimes it doesn’t.

Take the famous 2019 movie Cats. Producers invested in what has historically been considered one of the world’s greatest plays, threw in well-known (and surely expensive) faces like Taylor Swift and Judi Dench, and thought “Bam! We’ve got ourselves a hit!”

Except, the film is estimated to have lost somewhere between $71 – $114 million.

So, not all ideas are great and can cost you big money.

However, the lesson here isn’t to avoid making cat musicals. It’s the importance of measuring.

In the world of business, measuring ROI is fundamental. However, when being in business becomes challenging, when cash flows get tighter, and normal pressures feel harder, we have to let go of our traditions and shake things up.

Adopting a fresh approach that considers the impact of customer experience, brand equity, and long-term targets will create a more cohesive picture of your marketing investments' effectiveness.

Why Traditional Approaches to Measuring ROI Fall Short

Traditional approaches to measuring marketing ROI fall short because they only focus on direct sales revenue, time spent on campaign creations, and promotional costs.

While these metrics are important, they don't give a complete picture of the impact of marketing on your business.

For example, a business might launch a campaign that generates a high volume of sales in the short term, but if those sales don't lead to repeat customers or increased brand loyalty, the campaign may not have had a significant impact.

In contrast, a campaign that focuses on building brand awareness and engagement may not generate as much immediate sales revenue, but it can lead to greater long-term success by building a strong and loyal customer base.

Taking a less traditional approach might mean understanding whether your efforts are at Cats level or Avatar.

Adopting a Holistic Approach

By taking a more holistic approach to measuring ROI that considers both short-term and long-term metrics, businesses can better understand the true impact of your marketing efforts and make more informed decisions about optimising your campaigns for maximum success.

Here are a few ways you can improve measuring your marketing ROI:

Determine your yields  

Success is fluid. It certainly isn’t the same for everyone, so adopting the same basic formulas that every other business (regardless of industry) uses isn’t going to effectively tell you how well your marketing is doing.

Before you start considering measuring anything, take a step back and determine what your yields are and what you want to achieve.  

Not only will establishing your yields help you build better campaigns as you define clear objectives, but it also helps you create formulas of your own  

Customer experience  

A positive customer experience can increase customer loyalty and advocacy, ultimately driving long-term revenue.  

To measure the impact of customer experience, consider:

  • Conducting customer surveys
  • Monitoring social media engagement
  • Analysing customer reviews

This data can provide valuable insights into the effectiveness of your marketing efforts and the overall impact of your campaigns on customer satisfaction.

Brand Equity

Brand equity refers to the value of your brand in the eyes of your customers. A strong brand can increase customer loyalty, higher prices, and greater profitability.  

To measure brand equity, consider tracking metrics such as brand awareness and your number of returning customers, and include questions around brand perception in customer surveys.  

Conclusion

Taking a fresh and holistic approach to measuring the ROI of your marketing efforts is crucial for success.

Traditional methods may fall short in providing a complete picture of the impact of your campaigns, and in today's highly competitive marketing landscape, you need to be on top of your game.  

By adopting a more comprehensive approach that considers the impact of customer experience and brand equity, as well as the long-term metrics, you can better understand the true ROI of your marketing efforts.  

So don't settle for outdated methods that may not accurately reflect your business' success. Take charge, be bold, and embrace a new approach that will help your business thrive.