Marketing ROI Declining? Here’s What to Do.

Any good marketer is going to proactively track their return on investment (ROI), which is effectively a measure of how much value you get for each dollar you spend in this area. Ideally, your ROI will keep going up, but what happens if it starts to decline?

What can you do to combat this trend and reverse your momentum?

The Power of Marketing Leadership

Much depends on your marketing leadership. The leaders of your marketing department are the most experienced, educated, and competent people you have, and they’re going to have a lot of power in gathering data and making decisions. If you have strong marketing leaders in place, you’ll have a much easier time analyzing the reasons behind your declining ROI and coming up with strategies for how to reverse that trend.

However, even marketing leaders sometimes struggle. After all, they may have been at least partially responsible for this declining trend. You can therefore benefit by supplementing your marketing leadership with outside authorities.

For example, you could hire a fractional CMO. Why hire a fractional CMO? A fractional CMO functions very similarly to a traditional CMO, but with a few key differences. Notably, fractional CMOs work as flexible, independent contractors and consultants, often engaging with companies on a temporary or rotating basis. If you bring in a fractional CMO, they can help your marketing leadership team conduct a more thorough analysis and ultimately make better decisions for how to move your business marketing forward.

Common Reasons for Declining ROI

These are some of the most common reasons for declining ROI in marketing:

Recent strategic changes.

It could be that you’ve made recent strategic changes that are impacting the value of your investments. You might be spending too much money on something new, or you might not see the results you predicted from a change in your messaging strategy. This is one of the more obvious root causes, since you’ll start to see declining ROI as soon as you implement the strategic changes. However, you’ll still need to take action if you want to reverse this trend.

A drift from your initial strategy.

Consistency is crucial for marketing success. You need to consistently present your brand image and authority, and follow precise messaging standards if you want your customers to see your organization as cohesive and trustworthy. If you’ve been drifting from your original vision, in terms of the messages you put out, the channels you use, or how you present your brand, it can easily compromise your results.

Changing consumer trends/attitudes.

Some organizations struggle with changing consumer trends and attitudes. If your customers suddenly decide that they don’t care about products like yours, it’s going to be harder to market to them. The same is true if one of your favorite marketing platforms is declining in terms of user engagement, or if your old messaging tactics just aren’t hitting the way they used to.

New competitors.

The threat of new competition can be incredibly disruptive. If someone offers a better or cheaper product in your space, it can force you to completely overhaul your marketing strategy. Find a way to differentiate yourself if you want to emerge from this dynamic unscathed.

Increased spending.

Sometimes, declining ROI is an indirect byproduct of excessive spending. If you’ve recently expanded your messaging territory or if you’ve recently invested in expensive new tech, it might be hurting more than helping.

The Best Approach

This is arguably the best overarching approach for correcting a marketing ROI problem:

Analyze the root causes.

Try your best to understand the root causes behind this new momentum. Without an objective, analytic approach, you’ll effectively be throwing spaghetti at the wall to see what sticks.

Reevaluate your high-level strategy.

Take a moment to reevaluate your high-level marketing strategy. Are you staying consistent with your original vision? Is this currently in line with company goals? Is it time for a change?

Reallocate your spending.

Consider moving money around, cutting the waste and redoubling your investments in proven approaches. Sometimes, even a few changes can make a big difference.

Test aggressively.

AB testing, or split testing, is one of the best tools you have to learn which marketing tactics work and which ones don’t. Test aggressively, across channels, with multiple variations so you can find the best possible approach.

Measure and adapt.

Always objectively measure your results and do your best to remain adaptable. There will be more obstacles in the future, so remain agile to deal with them.

If your marketing ROI is consistently going down, that’s obviously a problem. But there are many possible solutions to this problem, and most of them should be accessible to your business.

Keep an open mind, do your due diligence, and keep pushing forward if you want to succeed.