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  • Soumya Nair

Common Marketing Mistakes that Generate Negative ROI

Updated: Jan 16

NOT EVERYTHING THAT COUNTS CAN BE COUNTED” -ALBERT EINSTEIN

Return on Investment, a.k.a. ROI, is a more than a century-old, tried, and tested concept.

Donaldson Brown, in 1914 working as Assistant Treasurer for DuPont company in the United States, devised a formula keeping the working capital, earnings, and investments in mind. He termed it, as we know it today, “return on investment”. The concept became hugely popular in the financial and academic circles as the DuPont formula for ROI.


Although the concept of ROI is simple — you put money in, measure money out, divide and prosper— it would be a mistake to only measure direct and immediate financial gains.


Consider a well-designed and executed marketing or PR campaign with long-tail returns on investment that will benefit your organization for years to come.


  1. increased brand and product awareness

  2. better customer satisfaction

  3. better sales leads

  4. better reputation

  5. more credibility


Think beyond monetary returns; think further and much broader, widen your scope and comprehend ROI.


Marketing is the core of any flourishing business, and we owe it entirely to marketing to add life, color, and vigor to a brand. Marketing is the key to brand awareness, thought leadership, and lead generation.


Then why do we hear about marketing delivering negative ROI? As with any plan, things can go wrong. The same holds good with marketing.


Some common marketing mistakes that may generate negative ROI:


Target audience not clearly defined: We can't always please everyone all the time! Hence, it's essential to clearly define and understand your target audience so that you can tailor your marketing efforts to them. This way, you have more chances of appealing to the right audience rather than wasting time and effort over a sizeable audience with nothing to do with your business.


Set clear goals: This should be one of the primary steps when you start to market -- what is the ultimate goal of marketing? Is it brand awareness, thought leadership, or lead gen? Depending on the plan, the appropriate strategy can be charted out for marketing, and it is vital to have specific, measurable, attainable, and relevant goals for your marketing efforts.


Marketing strategy: A clear marketing strategy should be aligned with one's business goals. Without this, it's easy to waste resources on tactics that don't contribute to your overall goals.


Not measuring and analyzing results: Measuring marketing efforts is a crucial step to understanding the success or failure of your marketing campaigns. Tracking and analyzing critical metrics like website traffic, conversions, and revenue is necessary. This gives us a coherent understanding of what is working in our marketing efforts. Once we know this, necessary changes can be made to improve our marketing efforts and, in turn, the ROI.


A budget needs to be allocated appropriately: It's essential to plan your marketing budget wisely, focusing on the tactics that will have the most impact. Over-investing in specific tactics or under-investing in others can lead to a negative ROI.


Pay-per-click (PPC) advertising: This is one of the most effective means to generate web traffic; however, if the clicks' cost exceeds the revenue generated from those clicks, it can result in a negative ROI. This can usually be seen when the target audience is not well-defined.


Print advertising: Print advertising, such as in magazines or newspapers, can be expensive, not reaching a large enough audience to justify the cost.


Cold outreach: Sending mass emails or making cold calls to affect lead generation can be costly and ineffective. If the cost of the outreach exceeds its revenue, it can result in negative ROI.


Trade show participation: Participating in trade shows can be expensive, with costs including booth rental, travel, and marketing materials. If you want to learn how to make the best out of attending a trade show, read our blog to understand how to stand out in an industry event. (https://www.pesti.io/post/how-to-stand-out-at-an-industry-event)


Inconsistency in marketing: It's crucial to keep your target audience engaged, and this can be achieved through consistent and quality content marketing. If you put out stale content or just for SEO, you will end up with mediocre or bland writing since your focus is only on keywords. The essence of content marketing is thought and creativity, and the result is relevant, valuable content that appeals to your current audience.


Focusing on one approach: You may generate some ROI from your blogs. That's excellent, but you must focus on other content marketing channels, like social media and email newsletters to make sure you are maximizing your reach.


Nonexistent CTAs: Some of the most effective content pieces in marketing are lost if no Call To Action (CTA) exists. The CTA is the key or connection that converts your blog/content audience into prospective leads.


Branding mistakes: Not paying attention to the brand while marketing is seen when marketers violate the sanctity of the logo, tagline, brand colors, etc. This can adversely affect the brand's image.


Bragging about your product/company: All marketing efforts go down the drain when businesses focus on blatant product promotion and blowing their own trumpet. This fails to create a community of loyal followers and tarnishes the brand's appeal on all social media handles, where users are notoriously hostile to a traditional hard sell.


Quantity over quality mistake: Businesses mistakenly believe that an endless stream of content will maintain brand awareness and enhance ROI. However, an excess of bland or non-relevant content will dilute the customer's interest in and adherence to the brand. Focusing on the quality of content will project the brand as a thought leader and strengthen customer loyalty and advocacy.


Not keeping updated with market conditions: The market is constantly changing, and companies must alter their marketing efforts accordingly. If you don't stay up to date with the latest market trends, your marketing efforts may become outdated and ineffective.


Conclusion


It's essential to carefully plan and execute marketing efforts to ensure they are effective and generate a positive ROI. This involves understanding the target audience, the competition, and the business goals and using marketing tactics and a budget appropriate for the business.


Make it simple.....but significant! - Don Draper Want to learn more? Join us live at Manifest, or send us your questions: https://www.pesti.io/manifest


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