It's High Time to Measure Your Online Promotional Investment

Online business owners are looking at their online promotional investments with greater frequency and scrutiny.  Audits measure more than just profit and loss, they also measure return on investment (ROI) and this is valuable information when planning future objectives. The article points out the benefits a company can take advantage of by measuring the ROI of marketing, advertising and promotions and seeing whether these vital activities are being used to their full potential.

While many executives think of promotions as a superfluous expense item, it has proven to be a critical component of tight budgets in the present economy. This is been driven by several factors, most notably the new perception of how important marketing, promotions and advertising is for growth. But understanding its crucial nature is not enough. Company's marketing programs are often poorly measured, rendering their full potential unrealized. Given the current depressed economic climate, it is essential for a company to be able to measure the ROI from all its promotional investments.

Companies are looking to increase the number of new prospects while shortening the sales cycle by improving their promotional efforts without increasing budgets. It is important to know which tactics within the program are working and which are not, so strategies can be set accordingly. The push for ROI is intended to justify marketing and demonstrate its effect on the company’s bottom line.

The Solution is to implement yearly, semi-annually, and monthly audits to help executives, top management, and investors ensure they are doing the right things to help drive growth for their organizations.

An audit is an evaluation of promotional practices and results. By measuring campaign performance, strategists outline a framework for effective business planning. This helps to maximize positive external perception and demand generation.

Many companies choose to measure the quality of their promotions by determining marketing effectiveness based on the number of leads generated. Audits must be based on factors such as quantity of leads, sales cycle reduction, and lower cost per sale. This audit should be periodically revisited to see if the changes have had a positive impact on sales performance or growth of company value. The audit will also indicate where adjustments may be required, such as positioning, or demand generation on the sales cycles.

There are no permanent “right” answers in promotions. Customers’ needs and wants are moving targets, and programs require frequent testing to find the most profitable formula.  Whatever industry your company serves, your company executives should insist on developing robust measurement practices to assess the value of your promotional efforts.

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