A marketing campaign’s costs depend on many factors, including the agency's expertise, the efficiency of tactics, market research quality, and the focus on ROI.
By keeping the ROI front and center of your marketing plan, you can design a highly efficient campaign without excessive expenses. Doing so is only possible when you make ROI the primary focus of the strategy.
Several ways exist to make marketing ROI the focus of your marketing campaign. The most popular approaches are North Star metric, OKR, and SMART goals. Let's take a closer look at each one of them.
1. The North Star Metric
A North Star metric in marketing is the key measure of success for your campaign. It gives your marketing team an understanding of what needs optimization.
The North Star metric is a powerful concept that can change the way your entire company works. It emerged from the way Silicon Valley's highly successful companies approach their business goals.
Examples of North Star metric are:
- Number of daily active users (for SaaS provider)
- Purchases per customer (e-store)
- Total read time (media)
The purpose of identifying and utilizing the North Star metric is to guide the company to focus on what it needs the most to achieve success.
Many businesses struggle to find their North Star marketing metric, thus failing to optimize their marketing efforts and spending.
When you make ROI the North Star metric of marketing, all efforts will revolve around improving it. If you stop spending money on marketing tactics that don't generate revenue down the line, you can improve your company's bottom line substantially.
OKR stands for Objectives and Key Results. This methodology allows companies to implement an optimized marketing strategy, which results in a better focus, higher transparency, and improved alignment.
Unlike the North Star metric, OKRs involve multiple Key Performance Indicators (KPI).
Objective: Increase ROI
Key Results (usually between two and five):
- Use website form fills to capture at least 50 emails
- Reach a conversion rate of 6% of email leads to customers
The achievement of the OKR framework is organizing team members around a common objective. The framework consists of the "Objective" (a goal to be achieved), "Key Results" (the measurement of the progress towards the objective), and Initiatives (work to be done to influence the Key Results).
They should offer a clear direction toward achieving a goal.
By taking advantage of the OKR methodology, companies can help employees prioritize their work while measuring its outcome. This approach goes a long way toward switching from the "output" mindset to the "outcome" strategy.
Overall, using the OKR methodology helps you create a clear plan that works to achieve certain goals.
If you make ROI the Objective, the Key Results will all contribute to raising the marketing ROI.
3. SMART Goals
Setting SMART (Smart, Measurable, Achievable, Relevant, Time-based) goals is a highly efficient step toward improving the company's bottom line. Their primary benefits are clarity, transparency, and efficiency.
One of the reasons why many companies fail to reach their marketing goals is the wrong approach to setting them.
Here is how SMART goals work:
- Specific — be clear about what you want to achieve. Narrow down your objectives.
- Measurable — make sure the progress toward achieving a goal is easy to measure along the way. Otherwise, you'll never know if you are on the right track.
- Achievable — the biggest problem companies face is setting unachievable goals. It's vital to have a clear understanding of what your team is capable of.
- Relevant — each goal should align with your long-term plan and other goals. It must be relevant to what you want to achieve in the long run.
- Time-based — setting a timeframe can help motivate you toward achieving the goals while making them measurable.
Using the SMART goal framework allows you to set boundaries and define clear steps to take, resources to do it, and milestones that indicate progress.
Setting a standard for what the ROI should be at a certain point of time can help keep your team focused on the right goals.
4. Mix and Match
Depending on your needs, you can start with one methodology and take advantage of others. It's possible to create a unique framework suitable for achieving your company's goals.
Keeping ROI at the forefront of the marketing plan may involve exploiting all the available methodologies simultaneously.
Keep Your Focus on the Marketing ROI
Putting ROI at the forefront of a marketing plan involves inserting it into your campaigns’ core objectives. Using any of the above methodologies, you can create a clear plan for doing so while achieving business goals.