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Marketing ROI -- The Path to Profitability

This year I made it my personal goal to dive deep into all things marketing ROI. I’ve read books, articles, and attended seminars, and let me tell you…this stuff has been challenging to figure out.

Sure, marketing ROI requires good measurements and measurement systems. It involves analyses, a solid financial framework, and – most important of all – a process for applying any insights you’ve got back into the strategic and tactical decision making processes. But it's sometimes easier said than done.

On today's program, diving deep into the subject of marketing ROI was a familiar guest to the show. In fact, after I interviewed him last year, I was so impressed I immediately bought his book right after the show -- Marketing ROI. Jim Lenskold, president of Lenskold Group, talked with us about how smart customer and sales segmentation provides more insight and can deliver more profitable marketing initiatives.

Key to the discussion were these three point:

**Marketing ROI is a financial issue. We as marketers must be able to translate what it is we are doing into profitability to the company...not just performance of a particular channel or medium.

**Segmentation based on demographis and psychographics is great as it provides meaning and relevance to our messages, but we must ALSO segment on customer value to the company -- who are the most profitable customer groups to target.

**Value-tiered marketing investments provide greater flexibility in marketing spending and allows us to spend more on the right customers (as opposed to those bottom feeders).

I met Jim at Mplanet 2006 in Orlando and have had the chance to talk with him several times. He's smart, easy to understand, and I like his stuff.

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