Marketing ROI- 3 factors you might forget

Nick Rattermann on Feb 3, 2016 in Tips
Marketing ROI- 3 factors you might forget

Marketing ROI often causes confusion.

It is one of those fluffy MBA phrases that is tossed around with far too little care. It is rarely grounded in any context and typically oversimplifies why your customers bought your service or product.

Don’t get me wrong, marketing ROI often means well. The motives behind it are usually strategic and disciplined. In fact, marketing ROI has great intentions and purpose, but it still falls flat on it’s face. Experts have written to help simplify it (One Simple Metric), but it continues to be an elusive and misunderstood business phrase that is in need of some clean-up.

Over the next few months, we will do a deep dive on Marketing ROI, and hope it provides value to improve your marketing strategy, planning and purchases. To begin, I introduce three often overlooked factors with Marketing ROI.

3 Factors You Must Consider with Marketing ROI

  • The Path to Purchase is muddy
  • Marketing channels carry volume shortages
  • Social proof is a trump card

The Path to Purchase is Muddy

The Path to Purchase is foundational in our ROI conversation. Essentially, the Path to Purchase is the decisions and touch points that contribute to the customer’s journey of finding, evaluating and deciding to purchase a product or service. This is my choppy definition, so be sure to check out these helpful resources:

Web Marketing Today -> The New Consumer Path to Purchase

Kissmetrics -> The Online Path to Purchase (INFOGRAPHIC via Baynote)


We will go deeper on this topic in a later post, but the overlooked factor in Path to Purchase is the outside influences that can cloud and confuse a clear purchase journey. Did a certain advertising channel cause your sale to close? Did the 10 conversions from yesterday really result from your last Google Adwords campaign? What was really the “tipping point” on your customer’s decision to buy?

These are tough questions and your default reaction to them will be to oversimplify the inputs that affect your customers actions. The path is muddier than you think and in the digital economy it is nearly impossible to say “Advertising A resulted in B results, so therefore I will invest more in Advertising A”.

I really enjoyed this Daniel Newman’s The Myth of Marketing ROI blog article.

As campaigns themselves become more measurable and the results that ensue become more clearly attributable to ROI, the original question of marketing as a means of creating a customer ends up hanging in the balance. Just because our keyword led someone to a landing page, which led him or her to click on our link and take a specific action, is that the reason they bought something?

The most cut and dry response may be yes, but really the answer isn’t that clear. Does that workflow from click to buy measure in any way the role of content that the ultimate customer may have consumed? Does it say for sure whom in the customers community may have influenced their decision to buy? Is it really safe to say that the purchasers’ affinity toward your brand is legitimized by the sequence of events they went through just prior to making the purchase?

The takeaway? Fight the tendency to oversimplify your consumer’s Path to Purchase. There probably are more factors that impact your Path to Purchase than you realize, despite what your slick ROI tracking/automation tool might be saying.

Marketing channels carry volume shortages

Another factor that trips marketers up with ROI is volume and channel shortages.

For example, let’s say that you have a fruitful marketing channel that is driving inbound leads and motivated customers. It seems to be building momentum and your team is getting excited about this being the difference maker you have all been waiting on. Since you are the analytical type, you can’t help but do the quick math….

“Facebook ads are driving a $55 Cost of Customer Acquisition (CAC). If we were to ramp up our spend next quarter, we are going to acquire 1,000 new customers that are worth…. yada yada yada.”

Sure, your math is correct and your logic is grounded, but the game quickly becomes one of volume. Many channels simply don’t meet the volume requirements that we ideally would like. We run into this at Jersey Watch all the time. For us, it is a no-brainer to invest in Google Adwords to help reach volunteers that are searching for “Free Youth Sports Websites”. But the volume is really low. That is just the reality. We can get as clever on the ROI figures and calculations as we want for this channel. Volume is the chokepoint.

The takeaway? Channels can have tremendous ROI potential, but if their volume can’t fill your marketing funnel, they remain limited to only a small component of your marketing mix.

follow friends

Social proof is a trump card

A final overlooked area in ROI calculations is the simple, but powerful, role that referrals and social influences plays on the consumer. Studies confirm that the majority of consumers look at product reviews before making a purchase (some have it at 70%). Below are two quick reads on the power of social proof in marketing decisions.

Fast Company-> Social Proof to Your Advantage

TechCrunch-> Social Proof is the New Marketing

From a personal story, this past spring I needed to buy a zero-turn lawn mower to keep our yard looking good (we recently moved to a house with close to 2 acres of grass). This was a daunting task to say the least. I hardly know anything about lawn mowers, let alone most types of equipment, and began my Path to Purchase by doing a wide-range of online searches to find the best fit for me. As expected, the major industry players, like Toro, Kubota, Cub Cadet and John Deere had flooded the content sources and search engines with quality information on their products and specifications. It was a bit overwhelming, but I began to fine tune my list to a few groups but still had not made a clear decision.

And then it all change when a friend recommended the brand Gravely, and casually mentioned it had a good reputation.

Instantly, all the equity, credibility efforts and brand position from competitive groups became noise to me. I went with Gravely. The trump card had been played. Honestly, nothing more than this trusted friend’s approval was needed to break the gridlock. They had a dealership within a decent drive of my house (but so do 4 competitors) and I purchased the mower.

The takeaway? Social proof can easily be an underestimated influencer by marketers. Whether you like it or not, it does impact your marketing ROI, and you can build specific tactics to work it in your favor.

Have a specific question regarding marketing ROI for us to cover in the upcoming months? Want to learn how we track our campaigns for Jersey Watch?

Send me a direct email at

Special thanks to for the ROI lead image. You can find it here.

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