Scorpion\u2019s Chief Marketing Officer, Corey Quinn, was brought up with Marketing ROI in mind. \u201cI was brought up through digital marketing, specifically in search \u2014 paid search, which is a very measurable channel in marketing…\u201d said Quinn. \u201c…spending dollars in PPC (Pay-Per-Click) advertising in Google in order to create clicks, leads, revenue, and so forth. I\u2019ve always practiced a data-driven approach to marketing, which is how I became very familiar with the concept of marketing ROI. Not just asking \u2018what\u2019s the emotional impact of our marketing,\u2019 but \u2018are we driving measurable growth?\u2019\u201d<\/p>\n
\u201cIn digital marketing, the actual return \u2014 unlike traditional forms of marketing \u2014 is very easily measured. With that, there\u2019s an expectation that there will be a return that you will directly see.<\/p>\n
It is an equation, it is something you can actually calculate. It is revenue minus the marketing investment, divided by the marketing investment. It literally means, if you are investing $10K in a marketing campaign, what is the actual revenue generated after you pay for your advertising?\u201d<\/p>\n
\u201cGood point! There are many ways to measure ROI. You could measure net profits, revenue, gross profits\u2026 There are a lot of different ways. But really looking at the revenue that\u2019s generated from that marketing campaign is the simplest way. Subtracting out the marketing investment.\u201d<\/p>\n
\u201cWell the interesting thing about marketing is that although digital marketing has created a great focus on data, not all marketing is limited to types or channels that are as easy to measure. For example, a YouTube series\u2026 There are costs involved, there\u2019s effort, and here at Scorpion, we don\u2019t tie that back to a hard ROI metric, because that\u2019s not the effect we are trying to drive with the series. We are trying to drive brand awareness and help tell our Scorpion story.\u201d<\/p>\n
\u201cYes, I would say so. Brand marketing is very difficult to measure. In fact, that\u2019s the very definition of brand marketing \u2014 it\u2019s just not measurable. But that doesn\u2019t mean it\u2019s not important. Some would argue it\u2019s more important than other types of marketing. Some think if it\u2019s not data-driven, then it\u2019s not valuable, and I think that\u2019s a mistake.<\/p>\n
When it comes to our clients, I think data-focused marketing is probably something that\u2019s new to them. It can be easy to get overwhelmed by all of the noise, all of the data, and clicks, and cost-per-click, click-through rates, average positions, all the data\u2026 so I think it\u2019s important for small business owners, whether they\u2019re an attorney, a home services professional, or a dentist, to know the key metrics on the health of the marketing investments that they are making. Certain data points are important to track.\u201d<\/p>\n
\u201cIn this context, I like to narrow the conversation to focus on paid search for ROI specifically. When it comes to the type of marketing we do for Scorpion clients, which is comprised of a lot of search engine marketing and PPC, there are three major data points I think are important for our clients to measure:<\/p>\n
1. NUMBER OF LEADS<\/strong><\/p>\n \u201cNumber one, the number of leads they\u2019re getting. After a month, or a quarter, can they look back and see how many leads their marketing dollars generated?\u201d<\/p>\n 2. COST PER LEAD<\/strong><\/p>\n \u201cNumber two, cost per lead. Taking the total number of leads, let\u2019s say ten for easy math. Let\u2019s say you spent a total of $1,000 in marketing during that month. Then the cost per lead would be $100.\u201d<\/p>\n 3. COST PER CUSTOMER<\/strong><\/p>\n \u201cUltimately, if the lead is good, they\u2019ll become a customer and bring money back to the business. Then, we want to look at how much we spent for each new customer. Out of those ten leads we were talking about, if one out of ten converts into a customer, the cost per customer is $1,000.\u201d<\/p>\n \u201cOne of the things I always say is that if you can\u2019t measure it, you can\u2019t manage it. This leads to a larger concept: It\u2019s important to not just to be working IN your business, but also working ON your business.\u201d<\/p>\n \u201cAt the very minimum, no less than monthly, quarterly, and definitely year-over-year. Annual measurement is important, especially for businesses with some seasonality. Then the next step is being able to forecast based on those measurements.<\/p>\n Measure the performance metrics \u2014 on a per-channel basis or on aggregate. This helps you understand the health of each marketing investment and which channels are driving ROI.<\/p>\n You want to make sure you\u2019re not spending more on marketing than the revenue you are going to get back. It has to be worth it. Not just a spray and pray. The hope strategy never works. It\u2019s about being intentional.\u201d<\/p>\n \u201cEvery vertical or industry is different. For home services, we like to see 4x the revenue versus the dollars spent. For personal injury, legal, we set the expectation around 6\u20138x the investment. In some cases, we have seen 20x ROI with landmark settlements and opportunities for our clients to make a lot of money. But those are rarer.\u201d<\/p>\n \u201cWe encourage our clients to think about setting their budgets based on a lifetime value (LTV) of a client versus an immediate value or job. Let\u2019s look at a plumber, for example. A plumber can spend a couple hundred dollars to get a new customer. Well, if the customer only generates $200 on the first job, like a garbage disposal issue\u2026 When you look at those numbers, that job would be a waste of time because the cost to get the customer and the revenue is a wash. But if you look past the first transaction, if the plumber provides good service and is good at building relationships and long-term trust, it\u2019s likely the customer will continue to use that same plumber next year, and the year after that, etc., which might make the LTV $20,000. And it cost only $200 to generate that customer. When you think about it that way, it\u2019s a no-brainer.<\/p>\n Theoretically, the plumber could afford to spend more like $300\u2013400 or more for that first job, because they are taking into account the customer\u2019s lifetime value. The plumber has to feel confident they can keep that client in order for this model to work, but this gives them a competitive advantage in the field.<\/p>\n And that\u2019s how we operate here at Scorpion \u2014 we like to believe we are setting our clients up with leads to customers or clients that will be with them for a lifetime, hence providing a high LTV. Your customer retention is the ultimately competitive advantage.\u201d<\/p>\n \u201cEither they don\u2019t realize metrics exist or haven\u2019t trusted them in the past. But no one in their right mind would want to disregard the data.\u201d<\/p>\n \u201cNumber one, continually measuring those three metrics I mentioned. Two, having the mindset of a lifetime value of a customer. And three, knowing your client retention rate is your competitive advantage.\u201d<\/p>\n \u201cI go back to measurement \u2014 be looking at it and paying attention to it. It won\u2019t improve on itself. Understand which channels are driving the highest-quality leads, and look at your marketing mix \u2014 if you are 90% Google for example and 10% Facebook, but Facebook is really working for you, maybe you reallocate funds from Google to Facebook to get better performance.\u201d<\/p>\n \u201cDigital marketing is still a very young medium, which means it\u2019s an area of a lot of innovation on platforms that evolve very quickly. What worked last year most likely won\u2019t work in the same manner the year after. You have to work with a partner who is thinking ahead of those innovation curves so you can benefit from them rather than be hurt by them.\u201d<\/p>\n \u201cSome companies get trapped into being too focused on ROI metrics, to the point that 100% is allocated to digital alone, and they are over-indexed. Because there is value in the brand marketing that will have an effect on the digital side.\u201d<\/p>\n \u201cThe way I\u2019ve seen it work depends on the business. Typically, if a business doesn\u2019t have good brand recognition in a market where they are trying to win customers, they are going to have to rely more on digital and direct marketing. But a smart business will do both paid search and brand-based marketing.<\/p>\n It\u2019s sort of a sliding scale, based on how well your brand is known initially, and once it is known, you allocate more and more to your brand. Direct-response initially.\u201d<\/p>\n \u201cThe costs are going up and will continue to go up as Google and other platforms become more and more competitive. It\u2019s forcing businesses to invest in their brand so they can lower their dependence on direct-response ads. Telling the brand story in the marketplace so you can gain trust. Very well-known brands, you see very little direct response. With brands like Coca-Cola or Nike, you see brand marketing.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" SCORPION SUBJECT- DEEPER DIVE- MARKETING ROI Scorpion\u2019s Chief Marketing Officer, Corey Quinn, was brought up with Marketing ROI in mind. \u201cI was brought up through…<\/p>\n","protected":false},"author":1,"featured_media":3078,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":""},"categories":[87],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/scorpion.rmdsites.com\/wp-json\/wp\/v2\/posts\/3900"}],"collection":[{"href":"https:\/\/scorpion.rmdsites.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/scorpion.rmdsites.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/scorpion.rmdsites.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/scorpion.rmdsites.com\/wp-json\/wp\/v2\/comments?post=3900"}],"version-history":[{"count":1,"href":"https:\/\/scorpion.rmdsites.com\/wp-json\/wp\/v2\/posts\/3900\/revisions"}],"predecessor-version":[{"id":3901,"href":"https:\/\/scorpion.rmdsites.com\/wp-json\/wp\/v2\/posts\/3900\/revisions\/3901"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/scorpion.rmdsites.com\/wp-json\/wp\/v2\/media\/3078"}],"wp:attachment":[{"href":"https:\/\/scorpion.rmdsites.com\/wp-json\/wp\/v2\/media?parent=3900"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/scorpion.rmdsites.com\/wp-json\/wp\/v2\/categories?post=3900"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/scorpion.rmdsites.com\/wp-json\/wp\/v2\/tags?post=3900"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}WHY IS IT IMPORTANT TO MEASURE IN GENERAL?<\/h3>\n
HOW FREQUENTLY SHOULD ONE MEASURE?<\/h3>\n
WHAT ARE THE BENCHMARKS TO KNOWING YOUR MARKETING IS DOING WELL? WHAT\u2019S THE EXPECTED ROI?<\/h3>\n
WHAT MAKES SCORPION DIFFERENT FROM OUR COMPETITORS IN TERMS OF ROI?<\/h3>\n
HAS ANYONE EVER SAID MARKETING ROI ISN\u2019T IMPORTANT?<\/h3>\n
CAN YOU GIVE US THREE KEYS TO SUCCESSFUL MARKETING ROI?<\/h3>\n
WHAT WOULD A COMPANY LOOKING TO GET BETTER ROI DO TO IMPROVE?<\/h3>\n
ARE THERE OTHER DIMENSIONS TO HAVING A SUCCESSFUL DIGITAL CAMPAIGN? OTHER FACTORS? LET\u2019S SAY ONE Q4 LOOKS COMPLETELY DIFFERENT FROM ANOTHER Q4.<\/h3>\n
WHAT SHOULD A COMPANY\u00a0NOT<\/u>\u00a0DO FOR MARKETING ROI?<\/h3>\n
IS THERE A MAGICAL MARKETING MIX? IS THERE A PERCENTAGE THAT WORKS WELL IN COMBINATION?<\/h3>\n
WHAT ARE SOME CHANGES YOU SEE COMING FOR ROI?<\/h3>\n