The Other ROI
So you’ve put together a super product. And you’ve got a stellar copywriter who’s selling the pants off of it. And your marketing team is sending the ad copy to millions of subscribers to e-newsletters everywhere. But when the results come in, your big campaign has been a big flop.
That’s when the blame game starts…
Your copywriter blames the product. “My copy is pitch-perfect,” he says.
Your product-development team blames the copy. “This is the best product we’ve ever made,” they say.
You’ve got to make a change, or the money you’ve spent on your campaign is wasted.
So where do you look?
MaryEllen Tribby has the answer, which she revealed in a recent ETR marketing meeting. And it has to do with that all-important metric, return on investment (ROI).
MaryEllen has told us before that ROI is the only thing that matters when you’re reviewing your marketing efforts. As long as it’s over 100 percent, you’re doing fine.
But ROI can also tell you what needs improvement: your product or your marketing.
What you do is look at both Net ROI and Gross ROI.
• Your Gross ROI is what you have when all of your orders have come in – when all of your prospects have had a chance to look at your ad copy and buy your product. If you have a high Gross ROI, your marketing is doing well. It means that people are connecting with the ad copy… that the landing page you are sending them to is relevant and enticing… and that they want to buy what you’re selling. If the Gross ROI is low, your marketing could use work. And that’s where you start testing – different headlines, different ads, even different e-mail lists.
• Your Net ROI is what you have after all your cancellations and refunds have come in. So, depending on whether you have a 30- or 90- or 365-day money-back guarantee, it could take up to a year to figure out your Net ROI. If your Net ROI is high, it means that your product is exactly what you promised in your advertising. If your Net ROI is low, it means that your product doesn’t work well, doesn’t fulfill what the ad copy promised, etc. In short, it means that your product needs work. (Now, it’s possible that the product is really good, but the ad copy misled people about it in some way. But that’s a different lesson for another day.)
“You may ‘know’ that your product is fantastic,” said MaryEllen. “Or that the ad copy is stellar. But what you ‘know’ doesn’t matter. Stick to the numbers. Net ROI shows how well your product did. Gross ROI shows how well your marketing did. Once you know what’s not working, you can get in there and fix it.”
[Ed. Note: MaryEllen Tribby has 20 years in the marketing trenches, so when she speaks, we listen. You may not be able to sit in on ETR's marketing meetings, but you can still get MaryEllen's advice on marketing and business building. Let her - along with 11 other Internet marketing, copywriting, and business-building experts - show you how to make between $100,000 and $1.2 million in 2009. Get the details here.]
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