So I found myself sitting at a totally hip breakfast spot in New Orleans with some new friends this past week enjoying some authentic cajun breakfast (shrimp in the morning anybody?).
Over breakfast we were all talking about various aspects of each others business, and challenges we each uniquely needed to overcome.
During the conversation, the topic of getting clients to buy in on spend for non-tangible ROI came up. Almost immediately my buddy Matt spoke up and said, “Well you just have to ask them what the ROI of their mom is.”
We all kind of laughed and thought that he was joking.
As the story went on, he shared an incredible anecdote that went something like this:
“A social media consultant that Matt knew was sitting at the table meeting with corporate executives attempting to sell them on the value of investing in Social Media Marketing. The all-too-capable CEO kept pushing back on him demanding an understanding of how to measure ROI on the spend. The consultant kept trying to give him solid answers to help the CEO understand it’s value even though true ROI would be a hard figure to get to.
Try as he might, the CEO kept refusing to entertain the idea. Exasperated the consultant finally spoke up, interrupting the CEO and said, “What is the ROI of your mom?!”.
The CEO was stunned. “Is this guy being serious right now?”, he thought, fuming hot.
Much to the rooms surprise the consultant asked them again, this time slower, “Seriously everyone. What is.. the ROI… of YOUR mom?”
Speechless and still not sure where this was going, he had the rooms attention and was clearly running out of time to explain.
He continues, “When you were a kid and had a really bad hair cut and your mom told you how handsome you were. Or when you got the flu and she brought you soup and kissed you on the forehead. Or when you lost the soccer game and your mom would still take you out for ice cream after the game. What’s the ROI on all of that? What is your moms ROI? There is no tangible number to any of that but can we all safely agree that it played a massive role in who you are today and how successful you are? Of course we can.”
The room was stunned and impressed.
So when you think of our own businesses, are there areas you’re afraid to spend because tracking ROI is difficult or impossible to do? As our business is growing and we’re learning about effective marketing and sales initiatives, we’re finding these fluid-ROI endeavors are becoming more (not less) critical to our long term success.
Take Moz for example. As co-founder, Rand Fishkin has discussed openly, Moz allocates 20% of it’s annual budget to activities that have no direct ROI attached to them. Why would a super successful brand spend 20% of a multimillion dollar budget with no responsibility for how it helps the bottom line? Because typically, when visionaries and employees are empowered to just “do something great” without concern for the bottom line – they typically wind up doing something great for the brand that pays massive dividends later on.
Is it a risk? Sort of. But as entrepreneurs we love taking risks and understand that risk-taking is a huge part of our own success.
So my advice? Stop tracking every penny spent and every penny earned and start focusing on the bigger picture. What’s the ROI of YOUR mom and how can you provide value to your customers intrinsically without knowing the return of every investment. Figure that out and you’ll start rising as a go-to brand whose customers naturally feel drawn toward, which in turn could result in increasing the over-all efficiency of every dollar spent on marketing.
Ironic: Stop sweating over ROI to focus on helping the customer and see ROI increase. Amazing!