Marketers — the good ones at least — get fixated on ROI, their return on investment. Hypothetically, it’s the single greatest metric you have to determine a campaign’s effectiveness.
There are ways to calculate ROI for a number of different strategies, so if your ROI is negative, you know it needs to be improved. But even with these calculations and an underlying desire for positive ROI in place, most marketing campaigns don’t end up seeing as favorable of an ROI as they could.
Why is this? Is it because the campaign was poorly planned, or because the execution was botched? In some cases, but most campaigns never reach their potential for one simple reason: marketers are complacent with a “good enough” ROI.
The True Potential of a Campaign
How can you gauge the “true” potential of a marketing campaign? There’s really no upper limit here. Run a quick Google search and you’ll be able to find some sample statistics — Web Strategies Inc. suggests that a “good” ROI for a marketing strategy is about a 5-to-1 return, or 500 percent. Honestly, that may be high or low depending on your industry, but it still doesn’t illustrate how much a campaign could potentially return to you.
What I mean by the true potential of a campaign isn’t necessarily a solid figure — you can’t strictly compare your marketing ROI to something someone else has done. In fact, that mindset often leads to stifled potential. Instead, adopt the mentality your campaign can always do better. Your true potential is always just on the horizon.
The Threat of Complacency
A couple years back, Wordstream wrote a post that noted the “average” conversion rate is about 3–5 percent, so that’s what most people shoot for. They tinker and tweak until they hit a decent figure — let’s say 4.5 percent — and then tap out, like their job is done. However, some businesses can attain conversion rates of 10 percent or higher — more than double the average rate considered successful.
The same problem applies to ROI; when most marketers break through and start yielding a positive ROI, they pat themselves on the back and keep things running close to the same. Doing this ensures that you continue seeing a decent return, but limits you from seeing even higher potential rates.
How to Fight Back
How can you fight back against complacency? How can you keep your ROI growing indefinitely, or at least see higher ROI than you otherwise would?
· Estimate conservatively. I’ve written before about how our own cognitive biases can negatively affect the accuracy of our measurements. For example, confirmation bias can make you see trends and patterns that aren’t really there — so long as you expect them. In a similar way, if your goal is a specific number (let’s say you’re shooting for a 30 percent increase in organic traffic), you might tweak variables and make slight adjustments until your campaign achieves that exact statistic. Rather than seeing if you can achieve a 50 or 70 percent increase, you reach your target and stop. To balance this out, try to estimate your metrics conservatively. Consider your work at its worst, and don’t allow yourself any shortcuts when it comes to measurement and interpretation.
· Never be too satisfied. I’m a big proponent of rewarding good work. If your team members accomplish something great, you should reinforce that behavior with some kind of reward. However, you should never let yourself become too satisfied with your efforts. If you reach the zenith of satisfaction, there will be no more motivation to drive you forward.
· Resist the pass/fail mentality. Most marketers end up happy with an underperforming ROI simply because it’s a positive ROI — it’s “good enough.” A campaign is a success, or a pass, if ROI is positive, and a fail if it’s negative. This mentality may help you cross that initial, important threshold of achieving positive ROI, but it will prevent you from seeing as much growth as you potentially could. Instead of viewing ROI as a pass or fail metric, view it as a gradual and sliding scale, with no upper limit and no threshold of acceptability.
· Always experiment. The marketing world changes almost constantly, and your tactics should change with it. It’s tempting to leave your campaign the way it is indefinitely, so long as you keep seeing a positive ROI, but you’ll miss out on other opportunities because of it. You need to take risks, run AB tests, and try out new strategies on a regular basis if you want to discover even higher-earning combinations.
· Hedge your bets. Finally, you’ll want to hedge your bets. Fully investing all your resources and capital into one strategy — even if it’s one that has worked for you in the past — is a surefire way to limit your potential. Invest in multiple strategies and see which ones work best. You can always discard the lowest performers and cycle in new ones with more potential.
If you follow these tactics, you should be able to prevent yourself from falling into the trap of complacency in marketing. There is always room for improvement, and there is no ceiling to your potential growth. Why settle for good, when you can be great?