From 99 Marketing Traps and How to Avoid Them: A Survival Guide for Marketing Pros and Those Who Hire Them*
Precious few companies do any meaningful ROI measurement of their marketing expenditures.
Some don’t know how (though it really isn’t all that difficult). Those companies that think of their marketing costs as a business expense rather than as an investment don’t really think about measuring its return.
Then there are those companies that do calculate ROI on their marketing, but do it on an annual basis. Measuring marketing ROI for the moment is not much better than not doing it at all.
If you are only measuring ROI against new buyer acquisitions, you’re missing an important, profit-boosting insight: that marketing ROI increases dramatically with each repeat purchase.
If you measure ROI only against transactions, your marketing will be under-funded and its effectiveness restricted.
If You Know Anyone Who's Caught in this Marketing Trap, Here's How to Help Them Out.
Think of the cost of buyer acquisition in terms of lifetime buyer value. What is each buyer worth on an average lifetime basis? That’s what you should be investing against.
The lifetime value of each buyer represents the real potential value of each new buyer you attract. It also gives you a truer picture of the real return available for every marketing dollar you spend. http://www.blogger.com/img/blank.gif
When top management understands marketing from the perspective of that kindhttp://www.blogger.com/img/blank.gif of investment and its real long-term return, you’ll find it easier to get more of the budget you really need to make the kind of marketplace impact that can drive up sales.
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