As marketing executives start developing next year’s budget, a question on everyone’s mind is “How do I best justify the dollars spent on marketing activities?” Proving company value for your 2011 marketing expenditures/projects is important… now more than ever… to regain the marketing budget that may have been cut in 2010. Therefore creating a estimated short-term and long-term ROI analysis for each expenditure is critical to use as justification during your planning phase.
If you can clearly show the positive impact to your financial institution for each marketing expenditure, you are much more likely to receive funding. Since most marketing initiatives will have an immediate and long-term impact, presenting both calculations will convey the true value and impact of the initiative. The long-term ROI calculation will show the long-term impact of your initiative to the banks bottom line, but keep in mind that you will have to make some assumptions...
For instance, if you are proposing a campaign on new customer acquisition, you will have to estimate average customer life, average product cross-sell, and product profitability over the customer life. Before making your long-term calculations, make certain that management accepts and supports your assumptions so that they will find your short-term and long-term ROI calculations relevant and valuable.
Short and long-term ROI calculations can be applied to any of your initiatives, such as deepening customer relationships, customer acquisition, reducing turnover costs, improving productivity, increasing product quality, and more.
Do all that you can to get your budgets back this year! Justify all of your projects with ROI calculations and make it hard for management to say “no.”
For more information on Budget Planning and Allocation, attend our FREE MarketMatch BrownBag Lunch on Friday, October 15. CLICK HERE to sign up!
Good Luck!
Jamie
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