December 12, 2011

A Real Life Example of Marketing ROI

marketing return on investmentFrom time to time I work on consulting projects for other companies and recently had the opportunity to do some research into the return on investment (ROI) one organization received from their advertising and marketing strategy.  In this specific instance, the company has a ‘largish’ marketing budget and was able to divvy their time and dollars amongst paid advertising methods (which included radio ads, newspaper ads, and online ads) and unpaid means which, in this case, included a company blog, company website, e-newsletters, and dedicated Facebook and Twitter accounts.

Given that all of the actual marketing dollars went into the paid side of the strategy, one would have expected to see customers ranking one or more of the paid means as the reason they made a purchase, right?  Or, perhaps their customers are more social media savvy and the purchasers were compelled to stop by because of the time and attention spend on the unpaid marketing methods?

If you answered yes to either of those you’d be wrong.  Overwhelmingly (47%), customers indicated that they purchased from this organization because they were either repeat customers or because a friend or family member told them about the company.  Because what this company offers is not completely unique to the marketplace and customers could, conceivably, find similar products elsewhere, that leads me to believe that nearly half of this company’s business is due to superior customer service (which is an area they spend a lot of time and money on training staff).  If customers didn’t like their first experience with the organization then they wouldn’t continue shopping there and they certainly wouldn’t recommend the business to their friends!  Just a reminder that all the attention you put into marketing – be it traditional advertising or social media – at the end of the day a larger portion of your business may be coming from good old-fashioned customer service!

In case you’re still wondering whether paid advertising beat out unpaid social media check back tomorrow…

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