Return on marketing investment (ROMI) is the businesses profit attributable to marketing, divided by the marketing investment. Measuring the contribution that marketing has on a company’s revenue is pivotal in understanding the effectiveness of a channel or audience you may choose to market to, and for many, the answer is “how long is a piece of string”.
According to a recent study, 87 per cent of senior marketers did not feel confident in their ability to impact the sales forecast of their programs. It becomes especially challenging when choosing mass marketing channels such as print, radio or TV where the actual in-store response or sales impact is harder to track. This is a startlingly high proportion, considering that the entire role of marketing can be boiled down to having a positive effect on a company’s bottom-line.
However it’s now possible to use in-store technology to help you understand whether your foot traffic is being influenced by your marketing efforts. Here are some top insights about how businesses can increase their return on marketing investment:
Catalogues and mailers work
An average of 35.58 per cent of customers asked, said their visit had been prompted by the brand’s catalogue or mailer. Not only does this show that a third of customers read marketing material, but it shows that they act upon the offers and deals mentioned in them. These customers also spent 9 per cent more per purchase on average than those who had not been prompted by a catalogue or mailer, proving that catalogues and mailers can be a really effective channel.
Loyalty programmes pay dividends
Whilst catalogues and mailers work wonders on your broader database of customers, offering a specific loyalty program is another way of upping their average transaction spend. An average of 32.23 per cent of customers said they had been asked to join or had redeemed their loyalty card/membership, and these customers spent on average 14 per cent more than customers who replied “no”, proving that loyalty programs, although can be hard work to set up and maintain, are a great return for both businesses and customers.
Social channels are crucial
Having an online presence, not only in the form of an online store, but via social media channels are crucial for driving customers in-store. An average of 13.30 per cent of in-store customers asked said they had seen the retailer’s Facebook page or that their visit had been prompted by the Facebook page. Those customers who were aware of a retailer’s social media channels spent on average 5 per cent more per purchase than those who said they had not seen the Facebook page. Although many retailers already have a dedicated social media channel, it’s worth considering running multiple channels (Instagram, Twitter, Pinterest etc), and have a content plan in place to give you the maximum exposure possible.
Click & Collect increases spend
Customers who indicated that they had researched products on a retailer’s website, or researched via Google first, spent a staggering 38 per cent more in-store than those who said they had not researched online. Consider Click and Collect functionality, that allows customers to order and pay ahead to then collect in-store.
Tracking ROMI has always been a challenge for marketers, and it is so important especially with the high cost and effort of creating and implementing advertising materials. As technology and data evolves we can start to more effectively understand communication channel preferences in the general market, as well as within our own organisation’s customer base.
Sophie Jillings, Head of APAC, www.trurating.com