ROI. Return on investment. It’s a term that makes some marketers cringe. However, to effectively gauge whether your marketing budget is delivering the results executive management needs you must calculate the income you are generating less the expenses your are occurring.
There are multiple ways to calculate ROI. You can use a simple formula, such as net income generated divided by marketing acquisition cost times 100. You can use a sophisticated tool such as Jeanne Murphy’s Profit Maker+Plus. At our website, we even have a few free spreadsheets you can download to help you calculate your promotion’s ROI.
However, analyzing your marketing campaign is more than just plugging numbers into a spreadsheet (although that is important). One effective method to use is the “Plus Delta” approach. It is actually a methodology often used in academic and education circles. It is also used frequently with the Lean Six Sigma business tool.
The “Plus” refers to what went well, while the “Delta” identifies what you would change (the “Delta” is triangle (∆). With “Plus Delta” you remove the evaluation concept away from what we did right and what we did wrong to more of a positive approach focused on what you would change moving forward. It does you no good to make a list of things that went bad in a marketing campaign. Simply doing that can make you feel like a failure. Rather by using the “delta” column you immediately focus on ways to improve.
Here is how the “Plus Delta” tool would work after a marketing campaign or promotion. You simply draw two columns on a single page. At the top of one column write the word “Plus.” At the top of the second column write the word “Delta.” Then brainstorm (ideally with others from your organization) what worked well during the campaign and what you would do next time to improve.
If you want to take “Plus Delta” to the next level (and I recommend you do), then you can use a technique developed by GoLeanSixSigma called the Plus Delta plus Who/What/When. With this method, you take the Deltas (what you would improve) and assign a person responsible (who) for getting that delta completed, an action step (what) for what will be completed and a timeline (when) for the deltas deadline. Adding this next layer to the Plus Delta takes the analysis beyond an academic exercise: it forces you to improve your marketing.
When it comes to analyzing your marketing campaigns you have tons of data at your disposal. However, too much data can result in analysis by paralysis. If you want to complete more than a simple number crunching analysis—if you want to take action to learn and grow from your analysis—then use the Plus Delta plus Who/What/When approach.