The Jordan Rules (@thejordanrules)

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Jul 27 '09

Controlling ROI

Yesterday I participated in a Twitter chat on using your blog for lead generation, and asked one of the hosts (@amyafrica) if she engaged prospects through social networks in addition to her blog & e-mails.

Her response was interesting: “No. I suck at all things social and when I say suck. I mean I am the world’s worst. I like controlled ROI.”

I found it interesting for 3 reasons:

  1. Given the structure of her blog (question/ answers) she certainly quite good at being social online.
  2. Co-hosting a Twitter chat that may include potential clients, in my opinion, qualifies as engaging prospects through a social network
  3. The idea of controlled ROI seemed like a new concept to me


So, I started thinking about the term “Controlled ROI” & and why someone would want to control it. If you know you’re getting a positive ROI, wouldn’t it be ok to allow return to grow uncontrolled?

The more I thought about it, the more I thought Amy might be thinking in a different way than me; and might be very right. I generally work for large brands who have a ROI target.

ROI

If we can spread the message through additional channels without incurring substantially higher costs, the client is usually on board.

Essentially, we would agree on a target (i.e. 5000 new subscriptions, 2% increase in traffic, 5% increase in sales over 6 months) and as long as we hit the target, anything above would be considered icing on the cake.

Then I started thinking about the differences in B2B and B2C marketing, business models, and business goals.

It occurred to me that ROI should be controlled for a few reasons:

  1. Smaller consultancies have a finite number of clients they can take on before becoming ineffective
  2. Social networking can take a lot of personal time to engage properly. It might be better to have no presence rather than an ineffective or alienating presence.
  3. Uncontrolled return may have a side-effect of returning unqualified or not optimally qualified leads. Lead analysis could severely decrease ROI.
  4. Consultancies often need a one-on-one relationship to convert prospects to clients


So here’s my definition of controlling ROI:

Having the ability to throttle the cost of marketing activities to produce desired revenue.

Tags: roi controlling roi marketing social media