Industrial Marketing ROI
What industrial marketing ROI should be
Everyone knows that ROI stands for Return On Investment. When regarding industrial marketing ROI, I think it should stand for Realistic Opportunity Investment, and in this blog I will explain:
- Why Realistic instead of Return?
- Why Opportunity instead of On?
- What is Investment?
Be REALISTIC in industrial marketing ROI
I have provided industrial marketing services to 50 plus clients. Most of the manufacturing clients I have worked with didn’t have a realistic view of how long it takes to get a return from their campaign. To be fair, it’s because most were not engaging in an actual campaign. After all, the majority of them had a service or product that has filled a need for one market. Filling that need launched and grew the company without having to invest much into a sales and marketing campaign. ROI didn’t matter because they made little investment. That is until they hit the “sales ceiling.” However, to continue to grow, they now have to implement new strategies. Strategies the could include selling to other markets or deeper into the market they are serving. Realistically that takes time.
Immediate sales from a new prospect are rare in an industrial marketing campaign. Unlike a business-to-consumer campaign, manufacturers do not offer a promotion for the services or products. After all, not many manufacturers could offer Buy-One-Get-One-Free on a part or piece of equipment. Unless you can run a promotion to entice a prospect to purchase instantly, you have to factor in your normal sales cycle.
A sales cycle is the length of time from getting the lead to closing the sale. You need to know the average time from the lead to the sales meeting to the proposal presentation to the adjusted proposal to the closed sale to make a realistic projection of when you will start to see a return. If you don’t know your sales cycle how can you REALISTICALLY judge the return?
You need an OPPORTUNITY for industrial marketing ROI
An industrial lead generation campaign gives your company the opportunity to grow, but you have to understand the nature of the opportunity. Just as you need to know your sales cycle, you also need to understand the purchasing cycle of potential customers. For example, in a manufacturing marketing campaign, you need to consider the demand for what you are selling.
Are you selling large equipment that lasts years before a new one is needed?
Are you selling consumable supplies that a prospect frequently needs for production?
These questions need to be answered to understand how much time it will take for an opportunity to turn into a proposal. An opportunity is just that – an opportunity. The leads you receive from a campaign have to be followed up and nurtured to turn them into to sales. If your sales team is not pursuing the initial leads, you are wasting the opportunity. Be honest in your assessment of the effort your company puts into capitalizing on the opportunity.
Understand the INVESTMENT of industrial marketing ROI
Investment remains in my acronym because you are making a monetary investment. However, investment also refers to time, and time is directly related to patience. Just as with the stock market, investing in a marketing campaign yields greater results with time. After all, one stock will not build a substantial portfolio. With this in mind, investing in just one lead generation channel will not yield significant sales growth. You need to:
- Determine the budget and decide on the best channels for the lead generation campaign.
- Evaluate each over the first quarter and if one channel is underperforming, try another.
Keep in mind that there isn’t one magic channel that will deliver quick and steady sales growth. You need to make a commitment to a proactive campaign and understand that it will pay off over time. That duration of time has to be realistic and honest to evaluate your industrial marketing ROI. You should base that evaluation on:
- Sales cycle
- Purchasing cycle
- The number of lead generation channels
- Sales follow up efforts
In fact, numerous factors affect ROI that have nothing to do with the actual campaign. Consequently, you can see why I believe Realistic Opportunity Investment is the better term.
Paul Kowalski (or Pappy as he is called around the office) spent over two decades working at other agencies before opening Conach Marketing Group in 2008. The early part of his career was working with Fortune 500 clients at different agencies. However, working with smaller clients was his preference. This choice was because of the impact on a client’s business growth and the forming closer, personal relationships.
When he was creating Conach, his goal was to bring those Fortune 500 strategies along with years of B2B marketing experience to small business marketing clients. As a result of focusing on business to business marketing, Conach specializes in construction marketing, financial marketing, and industrial marketing. Even though we are in Mid-Michigan, Conach provides marketing services to clients across the country.