If marketers are really committed to weaning themselves off short-term ROI and prioritising long-term growth they will need to get the C-suite on-side.
Marketers’ obsession with maximising ROI is killing businesses and should therefore be tempered with an equal, if not greater, obsession with growth, says effectiveness expert and consultant Peter Field.
He argues that ROI is “incredibly dangerous” when used as a decision metric and marketers must demonstrate to the leaders in their business that there is another route to sustainable, profitable long-term growth.
Field’s work with collaborator Les Binet, head of effectiveness at Adam&EveDDB, has sounded a warning against using ROI as a decision metric used to pit one campaign against another, because essentially the best way to maximise ROI is to spend less money.
“It’s a ratio, so you get back what you put in,” Field explains. “If you could minimise what you spend, you’re likely to maximise the ROI, so what it’s leading businesses to is a whole lot of activity that generates very mediocre improvements in trading but does it at minute cost.”
Part of the shift away from an overreliance on ROI comes from getting senior leaders in the business to better understand the job of marketing.
He urges marketers to communicate with the CFO and CEO about why an obsessive pursuit of ROI is dangerous and explain why they, in particular, are perfectly positioned to drive long-term profitable growth.
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