Marketing ROI Reporting To The C-Suite

What is the most effective way to measure and report on marketing ROI? This may seem like a strange question. After all, the term ROI (return on investment) is an accounting term that is very clearly defined. Nevertheless, over the years, a good number of marketers have been ‘creative’ in applying ROI-methodologies to marketing. There are too many examples of marketers reporting non-monetary KPIs (performance-based) - or sometimes even plain marketing activities (activity-based) – under the ROI label. In other cases, the ‘ROI family’ is being extended with exotic non-monetary variations such as, for instance, ROO (return on objectives) or ROE (return on engagement).

It is clear from the above that marketers do want to report their marketing ROI. But at the same time they find it difficult to express marketing value in monetary tems (value-based). Hence, the many variations in marketing ‘ROI’ reporting.

To find out which of these reporting variations are the most effective,
Calibrero conducted a research study to solicit the input from management board members. Over 100 participated and helped us find answers to the following questions:

1. How do board members define the marketing role?
2. How satisfied are they with current marketing ROI reporting?
3. Which metrics effectively link marketing performance to company profit?
4. Which marketing value drivers are considered fit for marketing ROI calculation?

One of the conclusions from the survey results is that there is a significant gap between C-Suite requirements for marketing ROI reporting and the actual reporting – as shown on graph 9. In this graph, we see that the majority of board members require value-based and performance-based ROI reporting – respectively 43% and 42%. In general, we can say that the CFO is more interested in value-based ROI reporting and the CCO (the one also responsible for marketing) in performance-based ROI reporting.

Graph 9 also shows us how this gap influences satisfaction and dissatisfaction levels within the C-Suite. Board members with unfulfilled value-based reporting requirements, have an above-average dissatisfaction rate (31.7% over an average of 24.3%) and a below-average satisfaction rate (56.5% over an average of 64.3%). We see a similar result among board members with unfulfilled performance-based reporting requirements. The reverse applies to those board members that require activity-based ROI reporting or no reporting at all. The satisfaction rates for these board members are not affected whether or not their reporting requirements are fulfilled. The reason being that their expectations are so low that they are more likely to be exceeded.

It is, therefore, fair to say that C-Suite satisfaction with marketing ROI reporting depends very much on their reporting requirements. Still, my recommendation is as follows: Focus on value-based marketing ROI reporting! This is the only way to attain high and durable satisfaction within the C-Suite. Even if your management board only requires activity-based marketing ROI reporting it makes sense to focus on value-based reporting. After all, board members come and go and the C-Suite reporting requirements can only go up. Focusing on value-based marketing ROI reporting, therefore, has long-term benefits.

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CALCULATED MARKETING SUCCESS!