10 experts give 10 reasons why ROI fails (it's not numbers)

roi fails

Why ROI fails

ROI fails to be measured for many businesses when Return on Investment (ROI) is a relatively simple calculation.

One that is exceptionally useful for measuring success over time and taking the guesswork out of making future business decisions.

10 experts give 10 reasons why ROI fails. And it has nothing to do with the numbers.

  1. No executive mandate to force measuring ROI. “The lack of a true executive mandate to force the needed process and cultural changes across the organization—well beyond marketing’s toy-strewn cubicle walls. Quite simply, without an executive mandate for change, your marketing ROI effort is highly unlikely to do anything but waste months of time and goodwill.” – Marc Blumer, VP, Director of Demand Generation Strategy, Slack + Company
  2. Lack of alignment between sales and marketing on ROI measurements. “Marketing and sales leaders are trying to work together, but still struggling to operate in lockstep. Marketing automation and CRM tools begin to connect the dots. They fail, however, to capture the interplay between marketing’s impact on awareness, trust, and confidence across paid, owned, earned, and shared channels, and sales’ ability to sell, sell more. The need to add in and analyze other factor that influence the customer journey.” – Kyle Brantley, Co-Founder and Chief Customer Officer
  3. Not setting SMART goals. “SMART goals are: 1) Specific, 2) Measurable, 3) Attainable, 4) Relevant and 5) Timely. SMART goals respond to and produce clear actionable data. They encourage multiple departments to collaborate and allow for perfect alignment with organizational objectives. Even if targets are not met, SMART goals give results expressed in universally understood metrics, allowing you to learn, grow, and be better prepared for your next attempt.” – Emma Astroth, Marketing Director, SIO Digital
  4. Letting hot leads grow cold. “A surprising number of companies launch a shiny new marketing campaign but fail to prepare the sales department for an increase in sales volume: you launch your plan, hot leads come in, sales staff is overwhelmed, hot leads become cold leads. An effective marketing plan requires a scalable sales infrastructure to ensure the organization has the capacity to adapt and manage lead flow.”
  5. No baseline. “Without the Baseline you have nothing to measure against and little, if any, control of your blog project and the progress you want to make.With the baseline you can start to compare your performance improvements over time and showing how you are getting better at measuring ROI.” – Urs E. Gattiker, ComMetrics
  6. No Key Performance Indicators (KPIs). Having SMART goals is one thing, but if you’re not monitoring your progress and breaking down your goals, but uou need to make sure they’re attainable, after all, and have a regular schedule for checking your progress. KPIs are also vital in a measurement framework. Ultimately, these show how effective your company is at achieving its business objectives. – Gertie Goddard, Noisy Little Monkey
  7. Customer relationships are managed by software platforms, not people. “The experts warn you against assuming that everything is well and fine just because you’re connecting to your customer with a CRM. Building relationships with your customers is an evolutionary process. Be aware that customers tend to evolve and change, and your business may need to evolve and adapt to their ever-changing needs.” – Amer Wilson, Rolus Tech
  8. Companies isolate analytics from business operations. “Struggles abound when analytic capabilities are developed and applied far removed from the business, within pockets of poorly coordinated silos. To make this work, a hybrid model to develop initial, centralized capabilities.” – Dennis McCafferty, eWeek, Baseline and CIO Insight
  9. Focus on customer acquisition vs customer retention. “Depending on which study you believe, and what industry you’re in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one. It makes sense: you don’t have to spend time and resources going out and finding a new client — you just have to keep the one you have happy. If you’re not convinced that retaining customers is so valuable, consider research done by Frederick Reichheld of Bain & Company (the inventor of the net promoter score) that shows increasing customer retention rates by 5% increases profits by 25% to 95%.” – Amy Gallo, Harvard Business Review
  10. No strategy. “Without a strategy, there can be no ROI. The “R” in ROI implies that there is in fact a return to be had. As such, the return must be defined through objectives and ultimately strategy development.” – Danna Vetter, VP, Consumer Strategies, ARAMARK

Do these reason make sense to you why ROI fails? Are you interested in creating an ROI that succeeds for your business?

3 Comments

  1. Rob Petersen

    Thanks Paul. Appreciate your feedback. Great to hear from you too.

  2. William Miller

    I totally agree with all the reasons listed above especially the number 9 reason which is focusing on customer acquisition vs customer retention. This is often one of the major mistakes of some businesses.In fact, most companies have a customer acquisition strategy in place, but very few businesses have a customer retention strategy. If we come to think of it, it is cheaper and easier to entice or bring back old customers than to attract new customers. Thanks for sharing!

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