Thursday, April 14, 2011

Students rock ROI; Razorfish helps to explain why

We went over this week how to calculate Return on Marketing Investment, ROMI, in the simplest sense. For our project each group got $200 to drive traffic to the web site. Most groups have made back their money, for a positive ROMI of dollars made/dollars spent of 100%, with some groups making over a 600% ROMI. I told them to put this all on their resume as employers would like these numbers.

Of course these calculations are also just marketing acquisition numbers and don't tell the story in terms of customer lifetime value. I heard a presentation yesterday at the CADM luncheon from Razorfish (Chad Maxwell and Teresa Caro presenting) on their work on marketing segmentation by communications preference and the engagement expectations by channel (

In our class, our Students have to pick two communications channels for their project Our groups in class using email have done quite well and individual email and the company web site are still the most valued communications channels in terms of customer's engagement expectations, according to this research.

The goal once the customer has been acquired is to keep them around and keep them engaged. Razorfish, working with Virgin Airlines developed four customer segments based on engagement preference. In spite of the fact the company is quite a savvy online marketer, not all of its customers were socially savvy (only 22%) and those who were traditionally engaged and like email newsletters for example (11%) of the sample, were also among the most profitable for the company.

I will talk to the students next week about engagement now that we have spent a semester on customer acquisition, and had some fun to boot!
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