How big impact should ROI have on your marketing expenditures as customer loyalty and brand equity can't be measured in monetary terms?

ROI is a poor measure of the success or failure. I am not saying ROI is a bad metric. But it’s misunderstood and often misappropriated.If you want to calculate ROI you’ll need to understand both the value of what you’ve invested (in money) and also the the value of what you’ve got back (in money).

It depends on what inductees you are in . But ROI should always be part of the marketing plan either in monetary terms and/or brand attributes which ultimately translates into financial impact but potentially on the long term. FMCG and services sectors norm is that a marketing campaign should yield 5 to 10 times growth in revenue vs the investment.

Yes defenitly ROI is key factor for invesments. I always work on a 100%

Exmaple:-

if i invest 100 i should get 1000

In my opinion there is no metric more important than ROI. I do feel very strongly customer loyalty can be measured either through renewal rates, return purchases, surveys, etc. But to me ROI is more complex than just what did we spend and what revenue did we get in return.

If the objective of the campaign is brand awareness, then the ROI should be calculated against impressions, new visitors to the websites, new customer acquisitions. 

I believe CPL is an essential metric for data acquisition, but more than that taking it to the next level and seeing how that converts. ROI is about the whole funnel and that is how it should be seen especially where you have incredibly long sales cycles.

And just as an FYI, there are agencies that can measure brand equity and brand uptake vs spend and help transform that into ROI. It depends on how deeply you value that as a metric. I come from B2B. I have never consciously spent budget where the soul objective was brand awareness, so my perspective might be different.

Answer:

Even If ROI is not being monitor through effective medium still organization can achieve rough figure to determined Marketing expenditure having worth or not, based on analysis of sales figures, as some time its is important to not to use expensive medium to analyze of ROI, For example If company budget for marketing and system implementation of ROI is ADE 100,000 and if its 30-40% consumed in implementing ROI analysis system than it is better to implement the ROI system after 3 years, till that time might company recover 300% sales through marketing.

*There many free or Excel oriented formats or cheap mediums to analyzed ROI on Marketing, Which even you can implement through your administrative or business management employee

Thanks,

Pritesh

(India)

For a start-up company: ROI should be overlooked in the short term.

For well-established ones: ROI is a measure of success, but ROI alone won't guarantee long-last success. ROI must be combined with other KPIs as NPS, CSAT to ensure the company will continue to survive/thrive in the future. 

Spend maximunm 3% of expected Revenue

In business, they look always what ROI they can get . Loyalty get stablish in due time and the quality of products and services.

Business growth begins by the the level of customer loyalty which lead to  customer value. Customer retention is how well you manage your customer relationship to ensure high level of satisfaction.

Also, strength of your brand determines its equity. Brand equity is achieve when there exist a conscious effort to develop and communicate the brand to achieve a brand value.all these require an investment in the development and implementation of comprehensive marketing programmes. For this reason, organisations must  invest in marketing, however monies allocated to marketing  should be spent prudently.

Agreed with Wealid Ismail Elrahel Mlri Ismail

It should have the biggest impact on your marketing expenditure. the real question is what else can you use as metrics to assess other ROI parameters. 

I would disagree that you cant measure customer loyalty and brand equity in monetary terms. maybe we don't have enough data, but in markets where data is abundant you can better understand value of customer loyalty and assess monetary impact of loyalty for example on the purchasing decision. there are plenty of classic marketing examples of the power of branding and brand equity, and how it contributes to profitability of a brand.

One metric is the "Carry-over" which is the % of brand sales in the absence of any marketing activity. this is a pretty accurate measure of how sales evolve as a result of brand equity. 0 carry-over = 0 brand equity.