What is the ROI of Marketing?
The business needs to see if marketing costs are being recouped by its contribution to revenue.
Hosted by Kevin Dieny
NOW AVAILABLE EVERYWHERE YOU LISTEN TO PODCASTS
Links Mentioned in Episode
- Glenn Schmelzle LinkedIn
- Funnel Reboot Website (Glenn is the host of this podcast)
- Kevin’s Episode on Glenn’s Podcast Page
- Marketing What’s New (Glenn’s Agency)
- Why Bother with UTM Parameters (Link to episode)
- UTM Parameters Guide by CallSource (Resource)
[00:00:00] Kevin Dieny: Hello and welcome to the Close the Loop podcast. I’m your host, Kevin Dieny and today we’re gonna be talking about finding the ROI of marketing and practical ways to be able to prove that marketing is effective for your business. With us today, I have a special guest, someone that I met at a conference, someone that I met and we just hit it off at one of those networking activities.
[00:00:20] Kevin Dieny: And his name is Glenn Schmelzle. And Glenn is someone whose focus is always about helping businesses, B2B organizations get their marketing to the point where it’s profitable, his agency marketing what’s new leverages digital channels to generate leads with technology to track funnels in dollars and cents.
[00:00:41] Kevin Dieny: Cause it’s really difficult to track it, but we’re gonna be talking about that his funnel reboot podcast, which I had the honor being on not too long ago, uh, has served. As an educational platform where over a hundred fellow plus marketers have shared their digital marketing ideas. Glenn has a BA from the university of Toronto and an MBA from Clarkson university and lives with his wife and three sons in Ottawa, Canada.
[00:01:04] Kevin Dieny: So welcome, Glenn.
[00:01:05] Glenn Schmelzle: Thank you so much for having me on Kevin.
[00:01:07] Kevin Dieny: So, we’re gonna dive right in. We’re talking about, you know, finding the ROI marketing. We’re talking about the practical ways to measure marketing and be able to prove its effectiveness to the business. Just to kick it off. Why should a business take the measurement of marketing seriously?
[00:01:24] Kevin Dieny: Why does that impact the success of marketing?
[00:01:27] Glenn Schmelzle: Yeah, I’m happy to kick that one on. And I’m speaking both as a business owner, as well as a. Guy who wears a marketing hat. So for people who run a business, it doesn’t matter if you’re talking HR, marketing, how you get your coffee supplies. A business is built around having to make a profit.
[00:01:50] Glenn Schmelzle: And so there is no reason why marketing should. Let itself be held to a different standard than the rest of a company is being held to. We’re gonna get into some of the quirks that make it not easy to do, but I want us to remember that end of the day, we’re trying to make something profitable. That means that it has future potential for growth, that there is perhaps an opportunity to reinvest and make more of this.
[00:02:21] Glenn Schmelzle: Marketing is something that we are doing in the here and now that if done properly, should be able to move us in that direction. So I say, let marketing be held to measurement standards. Don’t just let marketing happen on its own without any accountability.
[00:02:39] Kevin Dieny: Yeah, I think accountability is really important and also the reason I like accountability is if you think about it, marketing is taking the, some of the business’ cash or taking some of the business’ capital and it’s using it. It’s putting it to a use. Now business is like, well, I could be using that to hire more people. I could be taking that and creating a new product or doing anything with the money.
[00:03:02] Kevin Dieny: So at the end of the day, it’s like, well, why should the business decide that marketing. Powerful and proper avenue for spending money. And why should it put it into marketing?
[00:03:16] Glenn Schmelzle: Yeah, absolutely. We all to also have to remember that marketing is one of those fields. It’s not like, you know, ultra sonography or some other field where.
[00:03:25] Glenn Schmelzle: All of the work happens behind the scenes. We walk through a world full of marketing. We are, you know, both, sometimes the people behind it, but we’re always the people in front of it, right. That it is reaching. So. I think we have to contend with some things that can distort our vision with this. And, you know, you were talking about how a business needs to take money away from profits and put it into marketing, or they can put it into other things.
[00:03:55] Glenn Schmelzle: Why should they have to put it into marketing? Well, if you have anything more than something that. I can click on Amazon and immediately order, or it’s within arms reach when I’m at the grocery store. If you have something like that, then you are having to reach someone at a time. That’s a little different from the time that they’re deciding to buy it.
[00:04:23] Glenn Schmelzle: And. That’s good because actually you now have some breathing space to influence their decision of who they’re gonna buy from, but here’s the challenge you have to part with those dollars now. And you have to wait until the revenue comes back and that dollar is recouped.
[00:04:42] Kevin Dieny: So that lag time, right. That’s sort of the function.
[00:04:45] Kevin Dieny: That’s sort of a.
[00:04:45] Glenn Schmelzle: Oh, it’s a killer. It’s a, it’s a byproduct of it’s it’s excruciatingly long.
[00:04:51] Kevin Dieny: It’s sort of like, uh, well, we, you know, we need to buy this part for our product or we need to have. A piece of our service requires us to have, you know, steps in it. That’s just part of the steps. The way I look at it is, okay, there’s invested money day one.
[00:05:04] Kevin Dieny: At some point, you know, it, hopefully it gets delivered. Sometimes you invest money in things and they just never come to fruition. They never even get to the market. So let’s look at it from the other side too, which is so why we decided to spend money. Let’s say a business is like, well, I get marketing. I get what it’s trying to do.
[00:05:21] Kevin Dieny: I get that when we’re spending money, it’s gonna have a lag time toward the impact. The problem is for a lot of businesses, which is where like we’re really wanting to narrow for this episode is why is it so difficult to measure marketing and measure the success of marketing as it aligns with the business’ goals?
[00:05:39] Glenn Schmelzle: It’s difficult because you’re normally involving others, right? So if you are a manager or perhaps an owner of a business, you’re probably not doing all of the creative or all of the. Add platform implementation or the emails, you know, that fall into, uh, the realm of marketing, but you are the person who has to judge its effectiveness.
[00:06:07] Glenn Schmelzle: And you’re a pretty good judge because you have gotten this far offensively because you’ve made good judgements in the past on similar kinds of decisions. So it requires some letting go. And I think that that’s, that has a lot to do with the difficulty. It’s not something that you can necessarily do. If, if you are, for example, a person who’s moved from, let’s say you were a good technician or consultant, but now you have a small army of people who do that job.
[00:06:43] Glenn Schmelzle: They are good at understanding how, how long it takes to do a certain job. And. You know, multiply that by a rate. They’re probably good at understanding, you know, how much revenue that job’s gonna be worth, but it’s a different thing altogether. When you try to swing over to the cost side and you say, all right, I need to now gauge how cost beneficial it’s going to be to get in front of people.
[00:07:10] Glenn Schmelzle: And yet you’re gonna have to tie it back to that revenue at some point. So I think that that’s jogging back and forth between those two. That’s a really big part of why it is difficult. And then I’ll slide my own industry. We have made it unbelievably jargon filled and technically complex, uh, and that doesn’t do anyone any favors.
[00:07:32] Kevin Dieny: So I had a guest on one time, say you have to look at marketing like an investment. Yes, it does all investments have the time lag also all investments have risk, right? Yeah. So what is it that, you know, a business in terms of, well, they’re not confident about marketing, let’s say because maybe marketing hasn’t worked before, maybe they don’t think it will work for their type of business, their type of industry, whatever it is.
[00:08:00] Kevin Dieny: So, to that I would normally say, well, what is success for you? What does success for marketing look like? Because it’s possible that marketing, in some ways doesn’t always lift revenue per se. It doesn’t always lift sales per se. Sometimes targeted marketing is done for other purposes. So it’s like if marketing was to be successful for your business, what would that look like?
[00:08:23] Kevin Dieny: What does that have to look like? And so, you know, for you, you run your agency. So. Are usually the ways that we look at marketing being successful.
[00:08:35] Glenn Schmelzle: Yeah, so glad you asked. Uh, and it is different by companies in a conversation. I had a long time ago that kind of showed me the foolishness of thinking that marketing should just, uh, serve, you know, all my needs all at once.
[00:08:51] Glenn Schmelzle: I was sitting down with a person and they were just beginning, uh, for a maybe dozen person company. And they. Kind of carved out some marketing budget and I said, well, what do you wanna do with it? And they said, I just wanna make some noise. Frankly, that was, uh, the conversation didn’t last much longer after that.
[00:09:11] Glenn Schmelzle: The truth is that you may see big companies doing that. And this is part of where I said, even though you’re walking through a world where you see marketing, please try not to take some of what you see out there and imagine that it is appropriate for your own business’s goal. It’s probably not. You’re probably better to start with a blank sheet of paper.
[00:09:34] Glenn Schmelzle: And you, you would ask things like. Do I have an existing customer base that I feel I could make more revenue out of. Right. If just, if the same people engage with me, either buying more things or there’s a higher dollar value per. Order. This is a way that you would absolutely want a telemarketer and say, I want that to be my objective.
[00:10:05] Glenn Schmelzle: At least for now another one could be brand new business. Another one could be, I don’t even want to go for end clients. I want to reach partners who will become a channel. And resell or refer people my way. Each of those is marketing objectives, but they stem from what you want your business to do. And a marketer worth their salt should be able to make that translation.
[00:10:39] Glenn Schmelzle: But I’m gonna complete the thought by saying there’s one thing in this bargain that you’ve gotta be ready to, you know, come back towards you with when that marketer. Does what you asked for that business objective, they’re going to probably show you some metrics. Those metrics don’t look immediately like your business goals, but I’m gonna ask you to let that high blood pressure that you’re feeling surge up.
[00:11:05] Glenn Schmelzle: Just let it pass and hear them out because what’s likely if a good marketing KPI can be found that serves as a lever. That by focusing on that marketing KPI, the byproduct is that your business’ key performance indicator and what you had as the original objective that that’s gonna move, but it’s not a direct, it’s only as an indirect and marketing is what brings the cause to it.
[00:11:40] Glenn Schmelzle: And the effect is found on your bottom line.
[00:11:43] Kevin Dieny: Right, something like you are describing there to me is like, I look at it like there’s top line, like maybe, uh, lagging metrics and leading metrics where there are data points that are telling us if the marketing is effective within the channel. And then there’s metrics that are telling us if the marketing is effective at generating and aligning with business goals, which might be revenue, sales, brand awareness, um, things like that.
[00:12:09] Kevin Dieny: And. To me, the more limited your budget is. And I I’ve faced some very limited budgets. The more I feel like I have to get closer to those metrics that are describing how they’re affecting sales or revenues or profits or gross profits. And the reason is is that if I start there and I’m like, okay, I can prove.
[00:12:32] Kevin Dieny: Give me a dollar and it’s equating a dollar in a certain amount of time period and paying it back and how much that’s gonna drive business, you know, continually then it’s like, okay, I can get more budget, but at some point you’re gonna need to fill the middle and the top of the funnel in a marketing funnel way.
[00:12:47] Kevin Dieny: And a lot of doing those things, isn’t gonna directly lead to sales. There’s too far of a distance. Helping people get educated. Let’s say on like the types of cars will help them figure out eventually what car they want to buy, but it might be very difficult to be like, oh yeah, the guy we showed like a brochure two, three years ago, ended up buying the car.
[00:13:09] Kevin Dieny: Like, there’s, there’s certain things. So in marketing, there’s extremely accurate data points. I’d say they’re probably closer to the end, probably closer to the sale a lot of times. And then there’s stuff in the middle and the top. That’s just so hard. So a lot of times I’ve heard, man, measuring marketing just seems so inaccurate.
[00:13:26] Kevin Dieny: So how do you deal with that, Glenn?
[00:13:29] Glenn Schmelzle: You break it down and, and you did a beautiful job just there of, you know, describing it by funnel stage. If there are people who. Maybe already have awareness of you, maybe there’s even, you know, out of home brand touchpoints that cause them to see and know about, but maybe your website is not structured for that activation, right?
[00:13:56] Glenn Schmelzle: Maybe there’s something that you could be doing to at the time when they are ready, which we call bottom a funnel, then you have a. Very intuitive means of letting them take that action. This is something that a marketer, you know, back to what we were saying about a marketing metric, their KPI could be how well are we converting people from one stage to another?
[00:14:30] Glenn Schmelzle: And it’s maybe, you know, as you say, it could be very close to the point where a cash register ring. And yet the nature of something inbound is that you are reaching people when they’re interested and their interest is going to work. Just like the way that we always make decisions. I’m thinking about something it’s in the future.
[00:14:55] Glenn Schmelzle: There are times where I just want to know enough to satisfy my current haziness about it, but that doesn’t mean that I’m ready to buy. And so the marketer has to reverse engineer that and say, what are the things that could help me just get them to consider me. Maybe put me in the short list or make some association.
[00:15:20] Glenn Schmelzle: So they say, yeah, when I have that problem, that’s who I’m going to, this is different from the activation, you know, or decision making at one. And as you said at the very top there’s awareness so a marketer has to make decisions and budget allocations that try to serve all of those needs. And I’m not gonna disagree with you.
[00:15:46] Glenn Schmelzle: It has some difficulties in it, but there are ways to at least get a directional sense of whether or not it’s working.
[00:15:55] Kevin Dieny: Yeah, so I think like in terms of like the business leader, I have seen ads come across in front of me who are targeting me that say, Hey. Look, we got a 15 X ROI on this ad for this company.
[00:16:13] Kevin Dieny: We can do the same for you, or Hey, check out our email click rate. It’s over 50%. We could do that for you. And I’ve been like, wow, well, how did they do that? Everything you wanna compare everything, right? Wow. They’re doing so well. Yeah, they’re doing so many things, but just like you’re saying, right. Like if I send an email.
[00:16:33] Kevin Dieny: To current people in pipeline who are really close to buying that says like, you know, Hey, would you like 20% off more? And you’re already at the finish line. They might be, they might be interested in opening that email. So I could say, Hey, look at this email, got like a hundred percent open rate and like a hundred percent click rate.
[00:16:52] Kevin Dieny: And so it could be very misleading. So. If you’re the business owner, a business leader out there, marketer of any type you’re seeing these ads, you’re seeing the marketing done by agencies, by businesses, by freelancers. That’s going out there and saying business owners, look what we can do. And so. What we’re talking about with these metrics is like having a really good understanding in their business.
[00:17:16] Kevin Dieny: What kind of marketing is going out and what expectations to have, cuz if you, like you said, inbound and outbound, if you email people cold, outbound, you’re not expecting the greatest open rate or the most engaged rate or the most connected rate or whatever it is, inbound, it’s gotta be higher. So, all of those things, right?
[00:17:33] Kevin Dieny: Change the expectation of how marketing is performing. So you run the agency, Glen. So how do you help business owners or how do, how do business owners get around? What are expected, proper successes, ways of what, what are the most important types of things they should be looking at in their business?
[00:17:53] Kevin Dieny: They can put the blinders on and be like, okay, that’s, that’s, everything I’m seeing is not necessarily reality or wouldn’t be reality for my business.
[00:18:00] Glenn Schmelzle: I don’t wanna sound like I’m hedging it, but let, let me approach the first, how it should be approached. And then we’ll get into the, the dots and bolts of, uh, what should be measured, how it should be approached.
[00:18:14] Glenn Schmelzle: Let’s remember that you are working in a world full of people and humans don’t make particularly good lab test subjects. Anyone in the social sciences. You know, if we remember back to maybe college courses, we are very hard to pin down. We are not necessarily as predictable as you know, two plus two equals four is so we have that difficulty.
[00:18:41] Glenn Schmelzle: And I guess I have to also say that. There are now reasons why data is being either removed from what a marketer can see by privacy regulations, or some of the tech giants are obscuring it because serves their needs. And so, you know, there, there is less information that we have here and, and those are just sober realities, but I don’t want someone to lose heart.
[00:19:08] Glenn Schmelzle: You asked about the agency thing. It starts off with something as woo woo. As your philosophy and your culture. So what you don’t want to do is you don’t want to create a pressure cooker environment where sales, but, you know, to include marketing where they feel that they just have to make a bell ring, you know, like a lab, subject wood Pavlos dogs, because what’s gonna happen.
[00:19:38] Glenn Schmelzle: They’re gonna do things like. The landscape is strew with examples of, for example, people who are searching for a product and they can go straight to the website. And it’s the sort of thing. Like they can book an appoint. So that’s the, the action and they could, if they’ve already thought of that company’s name, they’re just going to Google and typing it in and Google’s just gonna show them in the organic search results.
[00:20:02] Glenn Schmelzle: Yeah. This is what you’re looking for. Here you go. And they will a marketer who is feeling pressured and who doesn’t have the ethical scruples can make a paper click ad with your company’s brand name and it appears up top. So. The person who types that and is just about to go to your website anyway, cause they already remember your name is seeing an ad and they click on the ad and then they go through and make their, you know, purchase or their appointment to purchase.
[00:20:35] Glenn Schmelzle: The marketer comes away and says, look at me, I’ve done this. pat on the back for me and the business owner. If they find out about this, uh, I’m sure aren’t none too happy. So, you know, but really is it entirely the marketer’s fault? They were given this, you have this quota to make you must by any and all means possible.
[00:20:58] Glenn Schmelzle: Failure is not an option. and that’s what you’re gonna get. Right. So I, I think we need to clear the air there, Kevin on maybe what shouldn’t be set instead. It’s going to be a mindset for experimentation and a mindset for let’s track what we can. And let’s be a little bit scientific about it. If I do these things, it ought to lead to those things, but I may be wrong.
[00:21:26] Glenn Schmelzle: So I’m gonna give it a shot.
[00:21:29] Kevin Dieny: Yeah, so that’s a really important aspect of marketing that. For me has come more as like something that it’s come over time that I’ve learned because in the beginning, it, to me, it was like, well, it’s all about the straight up performance in the here and now, and as quickly as possible, which is absolutely what a business has to be able to recover.
[00:21:48] Kevin Dieny: You know, it’s it’s expenses, especially the smaller it is. It’s like, my budget is very limited. Yeah, no doubt. But I’ve come to realize like at least 80% of the budget, you know, at max is in performance to me and 20% of. Is sort of like research. And by that, I mean, when I spend a dollar 80 cents of that is gonna be dedicated probably to the performance of that ad.
[00:22:12] Kevin Dieny: But in addition, 20 cents is gonna be wasted on learning from the mistake on figuring out, oh, there’s had the wrong keywords, or this was the wrong audience or this, this page there’s something off or. Because a marketer is not really after quantity as much as they are after quality, but there’s a balance there because if you go too much in either direction, you’re super high quantity, like you said, the bell ringing, getting people to just, you know, get an appointment, but then you find out none of them are.
[00:22:45] Kevin Dieny: None of them are a fit is a total waste on the other end. You trust is bad. Yeah. You have one only one person that came in your whole budget pulled just one person. It may not be able to float the thing, even though it’s okay. This person’s a really good fit. it’s just one person. So what can we let go of on the quality side to increase the quality to me, marketing is always that scale.
[00:23:06] Glenn Schmelzle: So I’ve got a suggestion for you there, and I’m gonna end up at scale, but I wanna absolutely underline what you said about, uh, experimenting. Let us not forget back to human beings. You know, those Shamira creatures that, you know, uh, are always doing new things and you know, when a new piece of tech shows up there on it, They are gravitating or drifting away, depending on your vantage point from platforms, what we call marketing channels.
[00:23:36] Glenn Schmelzle: So if you thought that Twitter advertising or Facebook, or, you know, name your platform, your social platform. That’s just your rock solid. I’m putting 80 cents of the do the dollar on that. In fact, I’m just gonna put a hundred cents on the dollar on that, because it’s always going to deliver for me, there’s this unending stream of people.
[00:23:58] Glenn Schmelzle: What you’re gonna find out if you don’t parcel away. A little of that money for experimentation is that human beings may drift away and not to get to kind. Philosophical here, but we have to acknowledge that the data that we have is incomplete. It’s a little bit. Walking through the dark and we have a flashlight turned on just a few steps ahead of us.
[00:24:21] Glenn Schmelzle: So what you may not notice while you are so busy walking down that path is that many of them are leaving for another platform or there’s a different kind of a tactic. And if you don’t pay attention to that, if you don’t move the flashlight around a little bit, Maybe 20% of the time, then you are not gonna notice that they’ve gone elsewhere to learn about solutions to their problems.
[00:24:48] Glenn Schmelzle: The effect of that is that your tried and true workhorse method will no longer have as much effectiveness and you don’t have anything else that looks like a candidate to replace. So I’ll, I’ll pause there for a quick second, and then I’ll come to your scale notion so far. So good.
[00:25:08] Kevin Dieny: I’m totally on board with that.
[00:25:10] Kevin Dieny: I was even gonna say it makes sense a lot of times, because a business might be like, well, okay, you spent the money, you got the results, but what can you tell me? That’s a such a great question. What can you tell me about what you’ve discovered? What have we learned? What have we discovered that will help us.
[00:25:28] Kevin Dieny: You know, cuz there’s sort of like a, not necessarily a forecasting, a trending, but there’s sort of like, like what you’ve described there’s insights in marketing that are signals that are telling you things about the market, telling you things about your own business. That may go way beyond just the current marketing campaign.
[00:25:44] Kevin Dieny: You’ve run there’s insights in there. And if you have a relationship with the agency or with the marketer in house or whoever it’s doing your marketing, they should be able to deliver. a, here’s the results of what you’ve spent, you know, budget in and some measurable success out, but also here’s what we’ve learned.
[00:26:02] Kevin Dieny: And I think that was, that’s something you’ve mentioned and touched on there that I think is really important before you move on.
[00:26:09] Glenn Schmelzle: Yeah, I completely agree. And if we were, let’s say doing everything in a business ourselves, especially the sales, uh, this is something that, you know, we would just intuitively do.
[00:26:21] Glenn Schmelzle: We would understand. We would get some of those insights in those conversations, marketing, sadly doesn’t have as many opportunities like that. Maybe things like chat bot. Kind of come close. Maybe analytics kind of tells us, but we have to be on platforms that are really unfamiliar. If anybody is unsure that they are unfamiliar.
[00:26:45] Glenn Schmelzle: Uh, I’ll ask you and I want anybody listening to take a moment. Now we’re in middle of 2022. Please go and get your website or instruct someone to get your website on Google analytics four. And. You need to have it, but I don’t want you to be under the illusion that if you just put it on there and you open it, these insights are just gonna spring out, like, you know, old faithful at, uh, at a national park, but what can we do for that?
[00:27:14] Glenn Schmelzle: And here’s how I think we can do it and get scale. If you have, uh, this kind of purchase where there is a customer journey and you think that they are. If you look over several of the last successful sales that you had and you come up with a hypothesis that well, gee, every single one of them first wanted to kind of know about this broad problem question, and then they want, they moved kind of into a more narrow.
[00:27:45] Glenn Schmelzle: All right. But I could solve this several ways. Now. I have questions on why and how much I would solve it for. And then they come into, well, why would you. be the right solution out of the ones that are very similar to you. And then to a decision, if they’re going along into things like that or whatever it is in your business, the way you can look at scaling it is to work with the marketer and to try to come up with cues for those conversations.
[00:28:18] Glenn Schmelzle: But not at an individual level. These are at a group level. So this is what for example, might be in a series of drip emails. This may take the form of maybe a message that a marketer, if they tell you they’ve used retargeting, this might be that retargeting message that is saying you. Come along and, and try this.
[00:28:42] Glenn Schmelzle: These are almost like breadcrumbs that are left at various times along the customer journey. And if the marketing is actually getting traction, these are things that should move the person from whatever stage they’re at to the next one. But I’m gonna repeat if I have to nauseum, this is done at a group level, we have to, as marketers make this so that it handles.
[00:29:08] Glenn Schmelzle: As many conversations and we’re going to write it once we’re gonna set it up once and we have to then measure to see whether or not the customer is picking up the trail.
[00:29:22] Kevin Dieny: Yeah, so I would say, I agree with everything there. In fact, I would say if you’re a business starting out and you’re thinking, okay, I want to get marketing tracked.
[00:29:35] Kevin Dieny: I wanna have a, I wanna feel more confident about it. I want to have more information about how it’s working, what’s going on, where maybe there’s a drop off. Right. I think sometimes I’ve come in and been like, well, here’s a drop off. And the business has been like, If the drop off’s there, let’s fix it. And then it’s not necessarily about fixing marketing budget or having that conversation.
[00:29:55] Kevin Dieny: It’s like, wow. Okay. Marketing’s creating leads. The leads are dropped off because there’s some hole, some black holes somewhere in the past, in the process for the business. So I usually go, I start like this. So you start at the end, you have a sale. Cause that’s something good happened there and go back.
[00:30:13] Kevin Dieny: Okay. How did you get the sale? You go one step back. Well, We sold him a contract. Okay. How did you sell him? The contract go a step back beyond that? Well, we had to tell ’em about it. Okay. How did you tell ’em about it? Well, they call, was that a yeah. Phone conversation? Yeah. You, you just go back, back, back, and then as far as you can, or if you hit a point where you’re like, you know what.
[00:30:32] Kevin Dieny: I don’t know exactly how this came in or what happened then for there. It’s like, okay, that’s the missing tracking point. Once you can get back to a certain degree now, I’m not saying you’re gonna be able to go, oh yeah, that’s the moment on the couch when the guy decided, you know, I don’t think it’s gonna be like, go back that far, the farther you go back.
[00:30:50] Kevin Dieny: No, you know, it’s gonna be harder and harder to get gray and gray to the point where, you know, you’re just making guesses, but stop at the point where you’re. Okay. I would say I’m below a confident point for myself of whether what really happened here. And is it really important that you need to track this point?
[00:31:07] Kevin Dieny: You might just be like, well, look, I got the last eight steps. That might be a lot and just focus there for now. But if you have, at some point, you’re gonna have the end. All tracked and measured. And if you do, you can see how many people are in each successful point in that progression to being a sale.
[00:31:24] Kevin Dieny: And if you see, okay, the numbers drop off significantly between one step and another. For me as I’m marketing analyst at heart, it’s like, okay, that’s narrow there because if we can get that up, Right. the whole pipeline radically changes. And is to me, is a, is that spending money on ads? No, that’s just, being able to track the process and seeing what’s going on in the business and narrowing it down.
[00:31:48] Kevin Dieny: That’s sort of operational work, but marketing is so tied to the operations of a business. That’s why we’re talking about tracking, measuring marketing’s effectiveness. You don’t do marketing. I would say. Until you’re confident you’re putting a lead into a process that’s properly tracked this is my 2 cents there.
[00:32:07] Glenn Schmelzle: Yeah. You, if you can’t go in a room and write it all out. Yes. Uh, then you’re right. Mar marketing is more back to the guy I talked about. Let’s make some noise so right. Uh, so a caution here, uh, and that is. Let’s say it is all written out and now we’re at the point of saying, okay, I think that some parts of this would be aided by specifically spending money on media.
[00:32:38] Glenn Schmelzle: Right? So for anybody listing, if you’re putting something out, like you put up a webpage, Google’s gonna see it organically. You didn’t have to pay for that. If you’re putting it on a social network, anybody who is following your page. And the algorithm smiles on them. They’ll see it. So we’re not talking that we’re talking about where you, this is sometimes called boosting, but you know, I think the more appropriate term is that there is targeted advertising.
[00:33:05] Glenn Schmelzle: Okay. So where does it make sense to do that? And how long does it make sense to do that? For first thing, I’m going to caution people on is to. Use the accountants ROI measure as their be all and end all for how this works. Why? Okay. Let’s be clear. I’m going back to my own, you know, days when they taught me this, but in school, I remember them saying that ROI is it’s the difference from your revenue after cost has been taken out.
[00:33:42] Glenn Schmelzle: Divided by the cost. Okay. So revenue minus cost divided by cost, right? What did I get for what I gave, you know, by taking out, uh, what I gave, I am only, you know, I’m only looking at what the difference is here and I’m comparing that difference over my original couple of cautions for that. But the main one I have is this could be used to defend.
[00:34:07] Glenn Schmelzle: Ideas that don’t make sense in real life. What do I mean if I let’s take ROI of me as a person and let’s think of me spending money on food. Okay. So I could say to myself, I want to have, um, I don’t want to have any, um, outbound cost because that’s on the, you know, bottom of that equation. I don’t really want to, uh, you know, I, I wanna venture very little here because I want to keep, you know, my calorie count low so I can starve myself.
[00:34:39] Glenn Schmelzle: Right. But I didn’t spend any money on food. So I kind of gained the formula and by the formula, I’m looking pretty good. But in reality, my body is now in real trouble. ROI by its own self is just an efficiency metric. And I could say, yes, I’m, I’m so efficient. I didn’t even have to buy any food, but don’t ask me to get up and do anything because I I’m basically exhausted just lying on the couch.
[00:35:06] Glenn Schmelzle: Right. So let’s not fall into that trap of saying, I must have this kind of a high ROI. It just means you were efficient at doing nothing. So what I’d like to think about is instead is effectiveness. And effectiveness. This is back to that, you know, lever, you know, Emma is marketing, actually moving a lever that in some part of that big process, that you’ve operationalized, that we can see a different number, you know, moving and it’s moving down pipeline towards revenue.
[00:35:42] Glenn Schmelzle: That’s a really important point. I wanna, uh, leave with the listener here, yeah.
[00:35:47] Kevin Dieny: That’s really important because. You know, in my head there’s marketing budget, it’s never zero, but in some businesses it is, you know, especially a business starting out. It starts at zero, but it’s really also important when it’s like, well, okay.
[00:36:02] Kevin Dieny: The spending 5,000 versus spending 50,000, that’s a 10, 10 X difference. There that’s a lot. So what you’re getting at is. It’s gonna be, let’s say a business is spending money on marketing and it could think, well, we could just cut that budget slash it and something, we have that recuperation we make. Yeah.
[00:36:17] Kevin Dieny: We make that efficiency look really good. Um, sometimes the business does have to slash budgets across the board or let people go. It happens because they, they are beholden to shareholders, but. And they’d need to stay alive. I mean, a business that dies because it, you know, it pushed out all its budget and ads that didn’t work is also problematic.
[00:36:36] Kevin Dieny: What you’re really getting to, which is something that I really like to focus on too, is like the health of a business. So a business should have a goal. We need to grow to this point or this number. This is what we want to get to, or this is how we wanna grow our company. You know, we’re gonna grow in sales, but we’re gonna grow in staff.
[00:36:52] Kevin Dieny: We’re gonna grow in product. We’re gonna grow in services or whatever it is. And so.
[00:36:57] Glenn Schmelzle: Or, or in these specific markets, like, as you say, it’s, it’s got something that a, uh, a strategy that the company as a whole is embracing.
[00:37:06] Kevin Dieny: Yeah. And, and achieving that. Does that require growth in something? Yes. Okay. How are we gonna grow it?
[00:37:14] Kevin Dieny: Okay. Well, marketing is probably one way it could grow, but other alternatives yes or no. So marketing. I think at its best when it can deliver you the information about how marketing could work, what you get from using it, it’s gonna give you efficiency. It’s gonna give you effectiveness. It’s gonna tell you how effective it was.
[00:37:33] Kevin Dieny: And you could take that and be like, well, okay. If I market in this channel versus that channel, right? This is how it’s kind of, this is kind of what I might expect. If I do both. You know, I might expect, you know, different result too. And that at the end of the day is the information, businesses need to decide, you know, how it’s gonna grow, how it wants to grow and what budget to allocate, because there’s some risk in everything.
[00:37:59] Kevin Dieny: So if it decides it’s gonna have slash all of marketing, I’d be like, well, what is it gonna do to still achieve its growth? You know? And is the amount budgeted realistic? To get and obtain that goal. Yeah. So, yeah. So anyway.
[00:38:15] Glenn Schmelzle: Yeah, I, I couldn’t agree more and yet I see this is not something that companies, um, Gets to this epiphany all at once.
[00:38:25] Glenn Schmelzle: Um, it, it takes weeks and months and sometimes years, but there is one common pattern that I’ve seen. And, and I’m so glad you raised the, the notion of, you know, how the budget should be looked. I’m used to seeing that a company goes from that $0 to, uh, a limited time campaign. So they’re kind of thinking, you know, like the work campaign comes from the military, right.
[00:38:50] Glenn Schmelzle: So we’re gonna go, you, storm that beach. Right. But you know, after we’ve done, you know, taken that one beach, then we’re gonna take a rest. That’s an okay stage. I think in terms of metrics, it would probably be, did we see some number, like, I don’t know, raw leads. Go up, did something happen? Okay. And if it did, you know, maybe that BOS our confidence to get to the next stage for me, the next stage is that we are seeing marketing cost return or lend some help to closed revenue.
[00:39:32] Glenn Schmelzle: And we see that enough to the point where the company says, this is a regular line. It. This is now not a, do we turn it off? You know, because of the change of seasons, we can see a regular stream of people and we expect there to be more like them. So that’s kind of the next one, uh, where I think you spoke about at the end there, it takes a different kind of thinking, uh, to me, instead of thinking about, we put.
[00:40:01] Glenn Schmelzle: This many thousand on our marketing budget, instead it becomes, you’re asking how healthy was that, you know, marketing applied in the acquiring of one customer. Okay. Uh, this is, you know, you may wanna start with averages for this, although that’s probably not going to be granular enough, you know, as you get on, but, you know, just take and you take an average order and you kind of break down the unit economics into, alright, I’m getting this much revenue out of it.
[00:40:32] Glenn Schmelzle: And I have a certain amount set aside, my fixed costs. And then I have my marketing acquisition costs and. What’s left over her profit. Oh, in this last month, it doesn’t look like any was left over. Okay. Bummer. But we’ve said it’s kind of a, now a regular part of our spending. So what can we do to make that acquisition cost on a per customer basis effective enough so that we do.
[00:41:04] Glenn Schmelzle: Our target margins. What is it that we need to do? That’s the kind of inquiry that takes companies to tremendous scale.
[00:41:15] Kevin Dieny: Yes, yeah, yeah. And if you think about it, if a company found that they spend a dollar and they get $10 out of it, why wouldn’t they be doing it all day?
[00:41:24] Glenn Schmelzle: They wouldn’t they would just put it right back in the top.
[00:41:27] Glenn Schmelzle: Exactly. Right. But I, I don’t want people to, you know, cuz people might be a little depressed thinking. All right. I’m so far away from that. , you’re not as many steps as you think, but, but you, and, and even those companies that are at the top and, and just plowing it back in, they now have like this institutional discipline of measuring things like maniacs.
[00:41:49] Glenn Schmelzle: So you’re gonna have to build up that muscle. At some point along, I would encourage you to do it at the early stages cuz you know, you’re gonna need it. Right?
[00:41:57] Kevin Dieny: Yeah, so I want to there’s one last thing I wanted to get to. I know, uh, we’ve been on, uh, there’s some time, but you know, this is just something I thought was really important and that is I, it is my belief that marketing has to be something that’s managed.
[00:42:12] Kevin Dieny: It’s not something you turn on and sort of. Turn it on and forget type of a situation. Marketing does have the, even if it’s performing well today does have the requirement of managing that marketing campaign, effectiveness budget, making sure even if it’s all set to just do what it’s been doing, everything has entropy into case.
[00:42:33] Kevin Dieny: That’s been my experience. It’s, that’s shown me to be true across every channel, every marketing thing I’ve ever done, it starts to decay people see the same message and they start to ignore it. So. It leads me to. Okay, well then that means it needs to be managed. That needs to be managed at some frequency.
[00:42:50] Kevin Dieny: If it’s, you know, someone from an agency, a freelance, in-house a manager, just taking a look at it once a week or once a month. So some frequency of it has to be on a always recurring basis when there’s marketing happening, spend going out the door. So. If that’s happening. If marketing spend, if you’re a business where marketing spend is a regular part of your day, regular part of your business, what are the practical tips or practical strategies for measuring the effectiveness of marketing that you would have?
[00:43:20] Kevin Dieny: Maybe just like a few tips or anything you’d have for businesses who are doing that today?
[00:43:24] Glenn Schmelzle: Definitely, I think the key is to, um, uh, unless I, you know, reread the same ground that you have, um, an area where open conversations can happen and where that marketer who may start to see a tapering off of results, be saying to themselves, I wanna do something about this.
[00:43:48] Glenn Schmelzle: There has to be enough freedom and admission of. What’s not working so that they will say I’m okay to tell the person managing me that we have to try something new. I have to switch it up, uh, or I maybe have to kill a program that we worked really hard on. And that it’s it’s time beyond that. The, I think the real gems come out of asking.
[00:44:21] Glenn Schmelzle: Within each one of these channels that we’re using within each one of the different types of headlines and messages that we’re giving to our prospects, it takes a willingness, particularly by the non marketer to listen and probe how well those things are doing, because that’s usually an early warning sign of a need for a change.
[00:44:47] Glenn Schmelzle: How does that get measured? The most practical thing that I wanna leave people with is if they are using any marketing that is happening off of the website, but that is bringing someone to the website, then they need to check out something called UTM parameters. And we can include some information in the show notes on what those are and how to build them.
[00:45:12] Glenn Schmelzle: Very simply though, they will. Quietly ride along with that person as they make their way to your website. But your analytics will now tell you so much about what you were doing to bring them. Were you talking about something that is seasonal in a post? Were you talking about something that is a story of, you know, each one of the frontline service people that you have and had a human interest angle?
[00:45:41] Glenn Schmelzle: Was it something that. Raised a new regulation and, you know, had that, you know, kind of spoke to people’s heads. There are so many of these things. If you start to track them more than just at the level, that would come outta the box, by adding these little snippets, you can start to understand what is really doing the heavy lifting it’ll help you perhaps lighten your load and get away from things that aren’t.
[00:46:11] Glenn Schmelzle: Working for you, no matter how emotionally attached to you are to the creative, but more importantly, it’s going to give you that sense of I am managing this. I, I absolutely know. I’ve been listening out in the field and the stuff that I’m hearing in the last couple of weeks is different than the marketing that we designed three months ago.
[00:46:32] Glenn Schmelzle: We need to start plowing that into what we’re doing in our marketing. And we need to see if we can detect a change.
[00:46:40] Kevin Dieny: Yeah, that’s really good. I think what you’re describing is like the feedback, uh, cycle for marketing, which is deploy. See how it went test. If you can improve and then redeploy or deploy multiple and see how they’re doing and how they help each other, there, it, it can become a very complicated web of attribution and, and also incre mentality of what’s going on with marketing and its effectiveness, but at its very basic, very basic core, I would say, I mean just a kind of quick summarize here too for listeners is ask this question yourself, do you know the effectiveness of your marketing in your business?
[00:47:16] Kevin Dieny: Do you know how effective it’s being and, and when I say effective, what’s the first thing that pops in your head? Is it sales? Is it leads? Uh, is it, is it a true prospect, someone who’s a qualified fit for your business? You know, is it just ringing the bell that’s leads? Is it a qualified lead, right?
[00:47:31] Kevin Dieny: That’s a little different. Is it, you know, the size of the sale, the average order value? Is it the frequency, how often they’re coming in? Is it a specific product you’re trying to move? Is it a new area or territory you’re trying to expand? Is it, uh, The interactions engagements on the website and emails and social there’s so many things it could be.
[00:47:51] Kevin Dieny: Maybe it’s all these things. How well do you understand the effectiveness of your marketing today? Great. Okay. So how often are you updating it then? Okay, great. It’s effective today. It may not be effective three months from now. So what does that take to have an engine, right. A marketing department in your business or an agency or whatever that is that is generating a frequent.
[00:48:14] Kevin Dieny: Set of campaigns that either needs to be refreshed or parts of it that need to be refreshed so that it’s always gonna be delivering, improving, and, and guiding your business and delivering back to you, insights, performance, results. I think that all needs to be considered when you’re looking at what’s the ROI of marketing and also that it aligns with your business goals.
[00:48:33] Kevin Dieny: I think marketing that just rings a bell, but that has night and to do with the way the business wants to grow. Is a, is sort of a waste because it’s gotta align now. Obviously things nobody’s perfect ever, like Glenn said, human beings are wildly unpredictable, so you’d need to just have feelers out there and testing and feeling it out.
[00:48:52] Kevin Dieny: Was there anything else Glenn that we didn’t say, or we didn’t mention before we close out here?
[00:48:56] Glenn Schmelzle: I love how you’re, you know, committed to the process. Maybe the one takeaway here is the answer to, you know, does it work? Does it not work? That’s not gonna make anybody truly satisfied and we all have a profit imperative.
[00:49:12] Glenn Schmelzle: So the sooner that we commit ourselves to learning all the things you said, and watching this loop happen, the better off we’re gonna be for it. And, you know, I really do believe that marketing serves a business. It’s not the other way. And so, you know, if you are either a principal or have been entrusted as a manager in a business and you know that it is meant to grow, then it’ll just go better.
[00:49:43] Glenn Schmelzle: If you decide to take in what marketing can do and follow along on. Process of inquiry that will eventually help your company. I wholeheartedly believe it will, but I want you to see it, you know, in proof in your actual numbers and in staff that can be hired and in good things that can be done in the community in which the company is, this is where it all ultimately should go.
[00:50:14] Glenn Schmelzle: Uh, and marketing is I think, an essential element to get you there.
[00:50:17] Kevin Dieny: Yeah, I’d like to echo that and also say, marketing is something that, yes, it might, there are specialists, but it is a hat that anyone can put on and reporting it, measuring it, seeing if it’s successful. It doesn’t take a, a tech genius that you could do it.
[00:50:35] Kevin Dieny: And I, and I would like to echo that too, that what we’re talking about isn’t only for all of the biggest companies or the most complicated setups, anyone can do that. So, Glenn, let’s say someone wants to reach out to you, contact you and learn more about you, your agency, or anything, your abouts, check out your podcast.
[00:50:51] Kevin Dieny: How can people find you?
[00:50:54] Glenn Schmelzle: And thanks for the opportunity, Kevin. They’re welcome to reach out to me. I’m pretty, uh, visible on social media. If they are into LinkedIn, they can come and look for Glenn Schmelzle. They can look for, ‘Hey GlennS’ on other social platforms. If they want to, go check out a podcast. They can go on to whichever platform they’re listening to this show on and listen to Funnel Reboot, where we talk more to the marketer on what they can do to get better.
[00:51:27] Glenn Schmelzle: And, uh, They’re welcome to use any and all of those.
[00:51:30] Kevin Dieny: Well, Glenn, thank you so much for coming on and talking about this topic and really, you know, I think putting some polish on marketing and ROI on, you know, what it is, marketing’s goals are how it fits into a business. What success is we’ve really tackled and talked about.
[00:51:46] Kevin Dieny: A lot of we’ve been into some rabbit holes too. So I think it’s a really great. Resource for our listeners to that, want to get more out of marketing and wanna put marketing into a better position in their company. So thanks, Glenn.
[00:51:59] Glenn Schmelzle: Thank you. And that’s what I hope to do. And if anybody wants to reach out and carry it on farther, even if they want to just find out more, uh, what’s down one of those rabbit holes I’m game.
[00:52:09] Kevin Dieny: Oh, that sounds great. All right, Glenn have, have a great day. Thank you listeners for chiming into the Close the Loop podcast.