At budget time, the math discussion usually revolves around ROI. The CFO will ask, “How many sales (and revenue) will result from this marketing spend?” The CMO will explain that “the whole is greater than the sum of its parts” and so there should be investment in direct marketing AND brand development marketing channels.
That’s when the meeting gets uncomfortable. Notice that the CFO says “will result.” CFOs want
quantifiable return, calculated with predictable facts and figures. That’s easy for direct mail,
telemarketing, or other targeted efforts because you’ll know who was solicited and can track response and purchase from those people. It’s not so easy to quantify ROI for brand development tactics.
But expecting to use the same yardstick for sponsorships, social media, website content, awareness-building advertising, etc. as for direct marketing isn’t fair. It’s almost impossible to draw a straight line in a short time between spend and return for these brand development efforts.
However, they can be measured against other objectives that your C suite should care about. Such as customer satisfaction and likelihood to refer a friend, trackable with customer surveys. Your CFO will surely understand that it’s cheaper to keep a customer than to find a new one. And one that becomes a promotor of your business by referring others is even better. Indeed, priceless—and trackable, with source of business metrics used by your sales team.
So how did we get from investing in brand marketing to high customer satisfaction to revenue? By cultivating brand ambassadors advocating for you, privately or in social media. By creating brand familiarity and awareness with advertising, and positive brand sentiment through sponsorships and social media. The direct mail response rate will go up because the envelope open rate will go up because brand awareness will go up. This is when the whole is greater than the sum of its parts. When 1 + 1 = 3. When it all adds up to supporting sales.
Want to measure this? Just ask your customers who they’ll buy from after you make the local festival or charity race possible. Ask your sales team how easy the cold calls become when prospects have heard good things about your company. Heck, ask your employees how good they feel working for not just a great business, but also a great brand.
If you found this helpful, share it with a colleague. If you want to know more about the value of brand development for your business, give me a call, send me a note or let’s meet. You’ll be glad you did.