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Is ROI Taking all the Focus off the Customer?

Social Media ROIReturn on investment is undoubtedly a top concern among marketers, and understandably so. After all, business owners need to know that their ROI is going to be enough to justify pouring resources into a marketing campaign. But are SEO companies and their clients approaching ROI in an entirely wrong way? Specifically, some are saying that they may be placing too much value on ROI, and not enough value on the customers that drive it. Conversion rate optimization is a service designed to evoke consumer action, and therefore the consumers being targeted deserve more of a focus when an SEO company is organizing a campaign.

Vic Drabicky from MarketingLand, who calls ROI “the most dysfunctional metric in marketing,” is one of the experts who has said putting too much stock in ROI leads to undervaluing customers. The idea is that because customers are what a business hopes to gain, obtaining them should be the end goal of all marketing activities, rather than achieving some number that supposedly represents ROI. One insight he offered was:

One of the biggest issues with ROI in its most common interpretation is that it puts value on marketing and eliminates the value of the customer driven from the marketing. While it obviously makes sense to put a value on marketing, it doesn’t make sense to split that from the value of the customer driven.

He offers the example of a campaign that drives two conversions: One, a consumer who buys once simply because the item is on sale; the other, someone who buys every time a new product is released. When the business only sees value in the marketing that brought those customers in, it fails to consider the value that each customer offers. He elaborates:

So the first step is to figure out what a customer is actually worth. By looking at data around lifetime value, purchase frequency, AOV, etc., you should be able to come up with a pretty solid number showing the value of your average customer. If you have the ability take it a step further, you can divide this data up even further, giving different values to people based on their purchase history.

Einstein on ROIThese are great ideas, and as a San Diego SEO company that believes in both ROI and the value of the customer, Crest Media embraces the concept of customer-driven ROI and thoughtful customer retention via social media channels. We examine the value of campaigns from all angles, both tangible and intangible, and approach ROI in a way that helps our clients’ brands thrive. For more information on our conversion rate optimization services, contact us for a free phone consultation.

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