Now is the time you should be planning for 2021. This next year will be one of recovery and rebuilding, so it is more critical than ever to create your plan with Return on Investment (ROI) in mind.
When your executive team asks the hard questions, can you explain with confidence and precision how your marketing dollars directly relate to revenue? Don't be fooled into thinking it's only about creating the perfect viral content or new ways to engage your audience because clicks, views, and shares aren't the quantifiable evidence that proves your team's worth.
While those are important components of effective digital marketing for brand awareness, they are not an accurate reflection of all the work that increases revenue through marketing investment.
However, by following a sound methodology that keeps ROI at the forefront when planning for 2021, you can create a plan that your executive team will approve. With carefully defined metrics, goals, benchmarks, sound strategy, and following best practices, you can clearly tie your budgeting dollars to ROI.
Return on investment isn't measured by dollars alone. Other metrics are important for measuring ROI, like brand awareness. But as we've established, you have to be able to measure each one in direct relation to the gains realized from the dollars invested for your marketing efforts to be recognized. Without showing how brand building and lead generation directly affect overall profits, the only parts of your plan that will be recognized are the ones that convert directly to sales.
Choose a Goal System
There are several ways you can approach planning your marketing goals. You don't have to pick only one. Using a blend of any of the following methods may work better to define and track progress toward your particular goals.
The North Star Metric
The premise of the North Star Metric is finding the one overarching goal that the company should focus on to be successful. By focusing on the primary objective, you can optimize your spending on what converts most effectively to increased profit. Examples will vary by industry and individual company, but an example for a media business could be total read time, while a Software as a Service provider may choose the number of daily active users as their North Star Metric.
This strategy is an acronym for Objective and Key Results. It requires choosing:
- Objective - The goal you are working to achieve.
- Key results - What you measure that gets you closer to the goal.
- Initiatives - What you are doing to impact the key results.
Setting specific, measurable, achievable, relevant, time-based goals is a way to ensure you have identified an objective that is not only within reach but can be tracked with accuracy, clarity, efficiency, and transparency.
Lay Down a Strategy
Every sound marketing budget is backed by a strategy with ROI as a goal. Some strategies could be to drive traffic with target personas and paid search ads or to create content specifically designed to attract, convert, and retain your target audience. However, you must consider the long-term as well as short-term objectives. When setting your strategy, address every part of your sales funnels so that you don't miss an opportunity to measure your contribution.
Setting benchmarks is a critical step in determining what ROI is achievable. Some ways to benchmark your marketing efforts can include establishing year-over-year comparisons of your company's sales data, doing competitive analysis, and using the right tools to measure your digital campaigns' effectiveness, like Google Analytics, among others.
When planning for 2021, your company is likely looking for any way to cut unnecessary expenses. Now is your time to be proactive. Audit your overhead costs to determine if there are expenses you can reduce without impacting your team's productivity. Some examples may include:
- Cut low-performing ad spend.
- Focus on referral marketing.
- Consider outsourcing.
- Narrow your channels to those that bring the highest ROI.
Follow Best Practices
Following industry best practices is an easy way to leverage others' experience in your field without having to learn the hard way through trial and error. Some to consider are:
- Integrated marketing - Create seamless, multi-channel marketing by combining digital media with other traditional marketing channels.
- A/B testing - Run two similar versions of the same ad to see which is more successful before rolling out to a larger audience.
- Marketing automation - Automating tasks like email marketing, programmatic ads, etc., frees up your team to do more revenue-generating work.
- Outsource to specialists - Engage a marketing specialist for targeted efforts where more experience can lead to a bigger ROI.
Increase Your Chances of Marketing Success When Planning for 2021
By keeping ROI top of mind for your marketing efforts in 2021, you are directing your focus toward the most efficient and effective means for achieving your goals. With realistic and measurable goals, metrics, overhead audits, a sound strategy, and employing best practices, you have put your marketing efforts on the track for success.