Detail Post

KPI v ROI – Real Service in Marketing

Marketing has a major issue, an issue that has quickly become its Achilles heel: most of the information that marketing agencies give to their clients means nothing.

The KPI Problem

Key Performance Indicators (KPI) are the numbers and metrics that show how an ad campaign has been performing. 

Most lists of KPIs include a lot of numbers that mean very little:

  • Cost per Lead
  • Sales Revenues
  • Inbound Marketing ROI
  • Lead-to-Customer Ratio
  • Organic Traffic
  • Social Media Traffic and Conversions
  • Customer Lifetime Value

All of these jargons dance around the real issue. The thing that every business—especially an auto dealer—needs to know is how much money did they make from the money they invested.

Return on Investment (ROI) is the one thing that everyone needs. How much money are you making from the marketing and advertising you’re paying for?

Make the Change

If you’re a dealer, you should require your marketing agency to help you calculate ROI. In the age of everything being trackable, they will be able to help you figure out exactly how much you’ve made from every advertising dollar.

If you’re an agency, you need to create an ROI pathway for your clients. Show your clients how you can make them money by tracking each client from initial contact to purchase. This change for agencies, especially digital marketing agencies, will bring back credibility to a field that has gotten a lot of money in the recent past, but has left some companies feeling taken to the cleaners.

Go Big or Not at All?

There are a few really big advertising agencies that outsource work to smaller agencies. They will get big contracts from businesses. The agency will then hire a smaller agency to do the work, usually for much less than the work is worth. 

Many of these big agencies overcharge for their services, selling a lot of “pie in the sky” and not a lot of actual performance. 

These agencies don’t have the clients’ best interests in mind. They are there to grab as much money as possible and leave the contractors holding the bag. 

Smaller agencies have struggled against these big agencies. They try to make inroads, but many dealers and other businesses will opt for BIG, instead of local.

How to make the change

The most important changes that need to happen are:

  1. Marketers and agencies need to deliver ROI figures, not just KPIs. KPIs are a great place to start understanding what’s happening, but the agency needs to make it clear that they have made money for the clients.
  2. Dealers should work with local, smaller agencies. Having someone in the local area is a great opportunity to work closely together, integrate marketing with sales, and build a strong and powerful marketing program that can deliver results in the long-term.
  3. Marketing needs to be part of the sales process. Today, most marketing professionals are divorced from the sales staff. The two teams don’t interact. An important part of getting the most from social media marketing is to have the two teams talk. This will let the marketing people learn from sales what they hear from customers. Salespersons can learn from marketing what the marketing program is working on and what emotions they’re trying to get from the customer.

Making a Difference

At SimpSocial, we work on ROI, not just KPIs. Our job is to deliver sales, not just a lot of clicks and follows. 

Social media is a place where you can get a lot of activity, but not all of it is productive. Knowing how to get the most from your social media marketing is a matter of experience, training, and understanding. 

We can show you how marketing can drive sales, not a “general” concept, but in numbers and facts.