Simple ways to unlock Marketing ROI!!
Posted by Ajay Kelkar on Sat, Mar 27, 2010
There are so many fancy words out there about measuring whether marketing efforts are successful or not. There is this huge body of work around what is called as ROMI(Return on marketing investments).
As a practitioner I have always believed that one can set up simple experiments that tell you whether your initiative is making sense or not. The simplest way of doing this when you have a database of customers, is to isolate one random group of customers as your "control" sample and select another group of customers for your campaign.
As an example I have had some experience in the past in activating Debit cards for a Retail bank-Activating essentially means getting the customer to use her debit card at point of sale(POS) and not only as an ATM card. We ran a simple RFM analysis (recency, frequency & monetary value) that identified segments of customers that we could go after for POS spends.
The RFM part was intuitive enough for seasoned bankers to vibe with and we were able to sell our idea of holding out a small set of customers as a control group. We launched the campaign and were able to assess its performance over time by comparing with the control group. The top RFM clusters did extremely well and on the basis of this we were able to launch a well thought out predictive model based Customer lifecycle program for Debit cards. A great side effect of this initiative was that we were able to build a great relationship with the CFO because suddenly marketing was becoming measurable.
Have a look at this interesting presentation which talks about Making Marketing more Accountable.
It would be interesting to hear what Marketers in large database industries like Telecom , Banking & Retail are doing to improve Marketing ROI!!