How To Explain The ROI of Digital Marketing (and Wow The Client)
If you have worked at a digital agency you will dread the question that gets asked by potential clients far too often:
“What’s the ROI of Digital Marketing?”
No matter how confident you are in sales and your company results, trying to explain the ROI of digital marketing will make your throat dry, your stomach twist and in the end, leave you with the feeling that you are selling fake goods at a market stall.
Well, that’s how I used to feel.
Then things changed.
I became better at selling and I became more knowledgeable about the digital landscape and how it will change in the future and the result was that I got more clients.
In this article, I will share with you 6 techniques that I use to explain and measure the ROI of digital marketing to clients and how you can do the same and wow your client.
You will learn how to use Googles own marketing to help you, you will also learn how to assess a client’s website and show them why it could be losing them business, in addition, you will also learn an amazing technique from one of the world’s leading social media management companies and much more.
If you are ready, let’s do this!
Technique 1: Measure Their ZMOT Score
ZMOT stands for Zero Moment of Truth and it is now my favourite weapon in selling digital services. The best bit it was created by that company your client may have heard of…..Google.
A few years ago there was a study in how consumers purchased their goods and it went a little bit like this:
Stimulus to buy: This came from an advert, desire or need
The point of sale: This became the first moment of truth where a customer put their hand in their pocket and purchased.
Using the product: This was the second moment of truth where they discovered if the product was any good.
Becoming a raving fan: This was the final moment of truth, where a person would become a repeat customer and a loyal fan of the product because it did a great job.
This was easy for marketers because they just needed to work on creating the stimulus and they did this via print adverts, TV commercials, radio, billboards and direct mail.
Then this little gizmo called the internet came along and messed it all.
So Google did some research and discovered that there was actually something they called The Zero Moment of Truth or ZMOT for short. This is that period between stimulus and purchase whereby we take out our tablets, smartphones and laptops and do research before purchase.
For example, I want a new car. Do you think when I Google car dealerships in my area and go to their premises I have done my research about what car I want?
Too right I have.
I will have looked at their cars, looked at the price and compared it to other Garages, looked at the vehicle details, Googled reviews and heck I will have even looked at YouTube videos.
By the time I walk into that showroom I know enough about the car, make and model I want, that I could go out and sell it myself.
The issue is that if the website I land on first, does not have the answers I want, I will press that back button and head elsewhere and once on another site I might well see the same car at a better price and perhaps they answer the questions I want to know the answer of.
So I might want a BMW and land on the local car dealers site and see a car I love.
But I want to see how big the boot is.
‘What!!!! I can’t see if I can get my kids bike in there’…….and the result is that I press the back button and head over to the local Volvo dealer.
But what if that dealer had written a great description on their website that made me quickly think the boot was ample or even better they had a video that showed the boot with a few items in so that I could see the size.
With my questions answered I head down to the showroom.
That is ZMOT in action.
But in case you are still unsure hear it from Google themselves:
So as you are now armed with this knowledge, here is how to use it:
1. Conduct An Assessment of A Prospects Digital Marketing Prior To The Meeting
Head over to the clients website and take a look. If you are physically meeting the client print off screenshots, if not simply create a PDF document
Depending on what service you offer you need to go down the website and look at the key issues, these might be as basic as contact details are hard to see, or an email sign up option:
2. Use Quora To Find ZMOT Questions
Next head over to Quora and input the type of business:
After you have done this you will a range of questions that people are asking about the business, in this case it is Thai Food:
Not only are these great topics to write about they give you an idea about not only the type of questions people want to know, with a bit of searching you will find important ones as well:
Here we see a question about the spice levels of food and it doesn’t take a genius to know that perhaps someone might be worrying if the food will be too spicy for them. This is a great ZMOT opportunity.
I would go and grab a list of at least 10 questions and see if their site answers them and then I would explain ZMOT and show them what information they are missing, based on just a few of the questions consumers have.
This gives a really basic benchmark for the client that you can measure the ‘lack’ of information’ on the site and provide a tangible reason why clients might go elsewhere due to this lack of information.
The best part is that by using Google and their data this really enhances your credibility.
Technique 2: Show Them The Reverse ROI
I have used this method before and I call it ‘The reverse ROI’.
Basically, this is the damage that is going to be done to their business by not doing anything.
At first, this seems silly. After all, if they do not do anything then nothing bad can happen… right?
Nothing bad will happen only if the market stays the same and your competitors don’t do anything either and how likely is that?
I had a prospect that came to me for a short period of time who was an actual victim of reverse ROI.
They had been number 1 in Google for years and they took their success for granted. What they didn’t know is that a competitor had hired an SEO consultant who had gone to town on a link building exercise behind the scenes.
Slowly their business got less and less until they realised they had been bumped down to page 2, this was a combination of doing nothing and also some bad SEO decisions.
What many clients do not understand is that at play behind the scenes of Google is a ranking structure that rewards two things above all else: Content and links. If your competitors are actively doing either one of those or both it spells serious trouble for your prospect.
This is not a case of using scare tactics but if you think about it this is just like the space race. If you are not building space rockets don’t expect to get to the moon.
So explain, to the client that by engaging in digital marketing and committing to this they are investing into their future because the negative effects of NOT doing any digital marketing are only going to increase as time goes by.
Technique 3: The Diet Analogy
There is a saying in the fitness world that goes a bit like this:
‘if you want to know what your body will look like in the future, look at what you are eating today’
Makes perfect sense and digital marketing is exactly the same. The stats are pretty clear:
“There are 3.26 billion internet users as at December 2015; that’s over 40% of the world population” and “By 2017, there will be more internet traffic than all prior internet years combined”
“2.9 billion Google searches are made every day”
“Facebook now has 1.55 billion active users”
Like it or not your prospect needs to get moving with digital marketing or they will get left behind because the internet is growing. So if they want to know what their business will look like in the future, a lot will hinge on the levels of digital marketing that they are doing today!
Technique 4: The Contrast Technique
This is one of my favourite ways to explain the ROI of digital marketing because it makes the prospect really ‘think’ about their past marketing.
If you are having difficulty closing the sale with the prospect, ask them what their last marketing campaign was. If they have done any at all?
Some will say either radio or print adverts, so ask them very clearly ‘ can I ask what you paid for them?’ and once you have the answer you move onto stage two.
Stage two of the contrast technique is simple, you ask them how they measured the ROI of the advert/ campaign.
Now I know that 90% of people will not be able to measure the ROI effectively other than through sales/ leads to the business unless they have used some sort of coupon code/ offer within the campaign.
This approach will get the client thinking about the last campaign and if it was truly effective for them and also will set you up so that they are less focused on trying to measure the return on their investment.
Now some of you will be thinking ‘but what if the campaign they last ran worked really well’?
That’s OK we have you covered there as well because stage 3 of this technique delivers the goods.
Stage 3 is all about telling the client how digital marketing will help every other marketing campaign they run.
How do you achieve this? By heading on back to Googles Zero Moment of Truth.
People are researching everything online so you simply cannot avoid the need for a strong digital presence because this is how consumers are behaving. The simple truth is that other forms of marketing cannot do what digital does and this brings us on to technique 5:
Technique 5: The ROI Of Your Mother Technique
Gary Vaynerchuk is the head of Vayner Media and an internet marketing genius, however, he is very famous for telling people about a meeting he had with a chief marketing officer at a company who kept on talking about ROI, in the end he said ‘what’s the ROI of your mother?‘
Now this might seem harsh but basically, it was talking about the fact that you can’t always measure the exact return on investment on everything in life.
Watch Gary explain it below in the video.
OK that is all well and good, but knowing that if you mentioned the mums of 99% of your prospects you would lose the deal, how do you actually use this in your explanation without getting punched in the mouth?
Simple…. talk about the sales and how you can show a direct link from digital marketing to them!
The ROI of Your Mother Technique is all about showing them how the results of digital marketing can be tracked, whereas traditional marketing cannot be easily tracked.
This is about the power of digital marketing and explaining this power to them.
For example, this is how things go for me personally.
I sit down at night to watch the TV at about 9 PM. Beside me is the book I am reading at the moment and my phone. When the TV goes to adverts I will then pick up my phone or book, I never watch adverts.
I don’t buy magazines anymore and if I do I never even glance at the adverts in them. So, how many other people use media in a similar way? (I tell them this story as well) then I ask them how well they think traditional marketing performs in this ‘modern day’ battle for attention.
The next step on the ROI of your mother path is to ask them a very direct question “Can I ask what has caused you to consider digital marketing?”
The usual answer here is that ‘because everyone is on Facebook‘ or something similar, or perhaps they will say how bad their results were using traditional marketing. This is your perfect ‘storm’ because you are free then to tell them what you can deliver and here is how I do this.
“Ultimately the measurement of any campaign is going to be sales because that is why you are using marketing, you want to tell more people about your amazing business. However, the beauty of digital marketing is that you will be able to track everything.
You will know how many people clicked on your ads, how many people read your company blog posts and how many people your Facebook page reached. You can send your ads and articles for pennies to the ideal customer and they will appear on their phones and tablets. You will also know if they read your content and clicked to go to your website.
Sure, sales will ultimately decide what your ROI is, but along the way, you WILL know how your marketing is performing. “
The goal of the ROI of your mother technique is to first showcase what traditional media does not allow you to do and then showcase all the amazing tracking and targeting powers of digital marketing. In essence, you are selling what digital and social media does and what other forms of advertising do not do!
Technique 6: The Definition Technique
In the excellent book ‘Commonsense Direct and Digital Marketing’ by Drayton Bird the author offers a definition of marketing.
He defines marketing as ‘any advertising activity which creates and exploits a direct relationship between you and your prospect or customer as an individual’.
I really like this definition but also the author also talks about Peter Drucker who stated that the purpose of business was not simply to make money but to create customers.
For me, this sums up digital marketing and I use this as part of a story of their customer (which I alter depending on the business), and it goes a bit like this.
Example business: A Cinema Complex
‘Dave is a hard working father of 3 young boys. He gets up at 6 am every day and heads off to his office job via a 45-minute car journey where he sits in traffic and when he arrives he spends a full 8 hours working before heading home sat in more traffic.
Dave loves films and he loves taking his family to the cinema, he has fond memories of going to the cinema with his Dad and loves watching films with his kids, but the price of tickets for him and 3 kids soon adds up and makes the cinema a rare treat.
Dave is the ideal customer for your new ‘family membership’. The thing is, Dave doesn’t know about your family membership because like most people he gets 120 emails a day (which is the average), his head is full of work and family stuff and he goes onto Facebook at about 9 pm every night when he finally sits down to relax. At this time Dave reads and looks for the things he likes, film trailers, movie reviews and updates from friends and family.
This is your ideal customer, so digital marketing is going to give him exactly what he wants. You are going to serve up movie reviews and film trailers from within your Facebook page (which he liked). Throughout the week you are going to tell him about the latest blockbuster that is out on Friday along with all the other films. You are going to be the ‘go to place’ for everything movie related for Dave. The result is that Dave is highly engaged with your Facebook page and website.
Because of this, you can now start to encourage Dave to buy a family membership. You will be able to send him posts into his email inbox because he subscribed to your newsletter. You will be able to write a series of blog posts about ‘Why going to the cinema helps to improve the imaginations of children’ and also how ‘family trips to the cinema strengthen the bond between parent and child’ and you will be able to tell him how the cost of a family membership works out at just £6 per week.
In the end, Dave understands that the family membership doesn’t just make sense it, it will make him happier because it will allow him to go to the cinema more often with his kids. Using digital marketing you have created a customer and encouraged him to come to your venue more often”
This might be a very long tale but the thing is, this is how digital marketing works. You have ethically created a customer and encouraged him over a period of time to buy from you, but to get him to this stage required you to give the customer value upfront. You have helped him by making his life easier.
So again when I am struggling to try and explain the ROI of digital marketing I head back to the definition, but explain how that definition works in reality. This is especially powerful because the client at this point will realise that they too have been marketed to by another business.
So there you have it, 6 techniques to help you to explain the ROI of digital marketing to a prospect.
Sadly we live in a world where people want to have page 1 rankings in a week and customers lining up to do business with them. However in this day and age it takes more than that, a business now has to put marketing high up on their schedule and list of priorities.
Those that embrace digital will win in the long run, but those who choose to paddle in digital marketing and not swim will lose.
You need to fully immerse your business in digital marketing to gain the benefits.
I hope this post has helped you, if so please feel free to share it with your friends.