ROI is a curseword 🙅♂️🙅♂️
One of my favorite podcasts is the Tim Ferriss show.
A while back, Tim interviewed Chris Sacca on the podcast.
For those of you who don’t know, Chris Sacca is potentially one of the best Venture Capital (VC) investors of all time. He invested in Twitter, Uber, Instagram, Twilio, and dozens of others.
He’s worth billions.
In the podcast, Sacca discusses what he looks for in company founders.
One of the first things he looks for is mindset – the founder’s own view of inevitability of success.
That he is so sure in the product, project, and outcome, that it’s not a matter of “if” it’s a matter of when.
When Uber is in every city…
When Instagram has its first million users…
When people get their news from Twitter…
Fast forward to marketing.
One of the most common questions I get whenever we have any discussions on marketing is “What’s the ROI?”
This is something they teach in business schools to MBAs like me.
And if you’re pitching to Procter & Gamble where you have millions of data points to operate on, it might be helpful.
But it’s generally a bad question for small businesses to ask.
Because much trying to predict the stock market, we don’t know.
If I knew what the ROI of every marketing campaign would be, I’d only ever pick winners.
And I’d certainly be retired in the Bahamas somewhere.
ROI is a neat concept, but it isn’t helpful in a real discussion.
May I suggest a few better questions to ask? These are the types of questions that will help you actually determine the best next steps.
- Is this the most effective way to spend our marketing dollars right now?
- If we’re successful, will this lead to a massive result or only a small result? (asymmetric risk)
- Will this get us in front of the people who can make purchasing decisions?
- Can we do this in a way to minimize potential downside risk?
- Can we increase the testing and cycle time to reduce risk?
Those are the best questions to ask on any new marketing proposal.
And they’ll get you a way better result and outcome than asking “What’s the ROI?”
Your Favorite Marketer,
Tyler @ Analytive
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