Data can be good. But not everything is quantifiable, which means that focusing only on results you can measure could be hurting your business. Check out what I mean in this post: Why Your Online Business Shouldn't Be Fixated On Measuring ROI
If you’ve spent much time around the online marketing world, you’ve probably heard people say that we need to measure everything. They say we should focus our marketing efforts on things we can measure and only spend money on advertising when we can measure the results and ensure a return on investment (ROI).
Here’s the problem with this view: it’s short-sighted. In fact, your obsession with measuring ROI could actually be hurting your online business.
I’m not saying that you shouldn’t measure anything or that measurements are bad. But I want to try to convince you that fixating on measuring stuff is part of what might be going wrong with your business.
You Need to Build Brand Awareness
Of course, when it comes to marketing and advertising, you want to be careful about how you spend your money and time. But you shouldn’t be thinking exclusively about what’s called direct response marketing where you get people to take immediate action.
If you look outside of the online marketing space to how professional marketers approach marketing, you’ll see that they use a mix of direct response marketing and traditional marketing. Most of their marketing is not direct response. They’re doing brand awareness ads and marketing tactics that have nothing to do with getting people to take immediate action. Lots of big brands, like Apple and Coca-Cola, do this.
My view is that we ought to be looking at what big brands are doing and finding ways to incorporate brand awareness marketing into our online businesses.
When You Stop Using Direct Response, You Stop Making Money
People in the online marketing space say that with direct response, you can get an ROI right away. You put $1 in and get more than $1 back. But what happens when you stop advertising? All of a sudden, you stop getting revenue, and that’s a big problem.
If your business is built on paid ads that are direct response (a freebie, a sales page, a launch event, etc.), what happens when you stop advertising? You stop making money. If you stop advertising, what you’ve been relying on for your direct response advertising and marketing spend is no longer effective.
That’s why in the online marketing space, so many people freaked out with the latest iOS update. If it’s going to make advertising less effective, are you still going to get the same kind of return? It’s like you’re on a constant treadmill.
You Want Long-Term Benefits
If you’re willing to invest in indirect marketing, brand awareness, providing value, creating content, and all these things that traditional marketers do, you can actually put in $1 and get multiple dollars back.
It’s going to take some time, though, and it’s not going to be direct. But what I can tell you is that even when you stop advertising entirely, you can still make money because you’ve built goodwill over time. You won’t make money forever, but you’ll reap the benefits of the effort and work you did for years.
If you focus exclusively on closing a hard sell and don’t capture your buyer right away, what tends to happen is they get jaded. They feel like you only care about sales. You start to be seen as someone who’s not about service, and if they don’t have an immediate need for you, you’re out. Then you lose the chance to market to those people over time.
Whereas, if you had taken a more global approach of mixing measurable marketing with non-measurable approaches, serving your people, and building trust over time, the opposite happens. Even if they don’t buy from you today, they might buy from you in 12 months. Building awareness and positioning your brand will pay off.
Some Things Are Simply Hard to Measure
I do want to stress that you should have things like key performance indicators (KPIs) that you can look at and tell whether your business is growing. But it shouldn’t be tied directly to money. The trick is to recognize that sometimes those things are going to be hard to measure. We shouldn’t measure things just because they can be measured. We should focus on the things that matter, even if they’re amorphous.
It’s important to diversify your marketing by shifting away from focusing solely on the direct return on investment, measurable stuff, and instead including building goodwill and those things that will ultimately power your business for the long term.