Don’t overthink how to measure ROI in advertising

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Businesses use all kinds of methods to try to figure out how and why customers come to their doors. But are those methods effective for really figuring out what attracts customers?

What I’ve found is that, sometimes, those methods tend to make things more complicated than necessary.

Many businesses use their point of sale to determine if a campaign is working. They rely on the employee asking, “What made you come in today?” Or, “What is your favorite TV or radio station?”

Some businesses have customers fill out a questionnaire of multiple choice answers. You can get some good information that way, but the problem with that method as the primary means to gauge ROI is twofold: Did your employee remember to ask, or did they just fill in the blank?   The reasons that customers cite for their visits do not always tell the whole story.

I remember attending a marketing seminar once where the speaker described this scenario: A customer walks up to the register at a store. The employee asks them what brought them into their store. “My friend told me about the sale,” replies the customer.

What most likely happened is that the customer drove by a billboard last week, or had heard or seen something on the TV or radio, or saw something online. But, they just had lunch with a friend who mentioned something about the sale going on. When they were asked at the register, the knee-jerk reaction to the question was that they heard about it from a friend. The employee marks it down as word-of-mouth referral.

Can you see how this method has potential for error? 

Over the years, I’ve worked as an advertising consultant and media buyer with a myriad of business owners and marketing professionals from industries including retail, finance, health care, automotive sales and service providers, just to name a few.

When it comes to your advertising and marketing efforts, there should be some type of measurement process in place for return on investment, or ROI. Most media outlets and agencies have measurable analytics and metrics to prove that they can deliver an audience.

Business owners could drive themselves crazy just by overanalyzing their customers’ responses. They get caught trying to please every customer and wind up bouncing around from station to station, media to media, based on the data that is gathered at their point of sale. That can be dangerous, since you need a consistent plan to remain effective.

When a business utilizes a well-balanced multimedia advertising strategy that targets the primary media outlets that will effectively and efficiently reach their core customers, it will work to bring customers into their business. And if sales are increasing, does it really matter why the customers are coming in?