I enjoyed Mike Fischler’s recent article in IT Marketing World, “Gigantic ROI: What Marketing Does Best”. Fischler points out that return on marketing investment (ROMI) is often difficult to measure. He also lets us know that there are factors outside of Marketing’s control that affect traditional revenue-based ROMI measurements. For example, if Marketing delivers some sweet leads and Sales drops the ball. Is Marketing then responsible for missed revenue goals?

Fischler then goes on to point out another way that ROMI can be measured: viewing Marketing’s impact in terms of cost savings. “We measure and pitch the ROI of most tech solutions by decreased cost, not increased revenue,” he writes. So why not measure marketing ROI with the “Saves Money” (rather than the “Makes Money”) approach? As an example, he focuses on how product collateral shortens or removes steps from the sales process—a cost savings.

For a number of years I have been preaching about how marketing investment should be viewed as delivering ROMI through the multiple corporate functions that it impacts. Sales is one of those functions. I have also written about how marketing delivers ROI through its impact on Human Resources.

Should “Saves Money” replace “Makes Money” ROMI measurements? The “Saves Money” ROMI is an important viewpoint and taken alone may justify marketing expense. However, revenue is important. There is no problem using “Makes Money” ROMI measurements if the proper “how” and “when” of those measurements is understood and corresponds to realistic goals. However, alone they are not sufficient.

The proper approach to measuring ROMI needs to include several metrics that paint the full picture. Fischler’s article on “Saves Money” ROMI underscores the importance of taking a broad view.

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