Short-Termism on Your Content ROI Might Increase Revenue—But Does It Increase Profit?

Chasing short-term returns on investment (ROI) may provide an immediate boost to your bottom line. However, you cannot expect to rely on this to lead to long-term success. Companies have become a bit over-concerned with their content marketing strategy and ROI. While it is true that you need to keep up with your competition, you also don’t want to cut off your nose to spite your face.

You need to create a healthy balance between pulling in sales (activation) and creating a loyal consumer base. From quarter-to-quarter, you absolutely need to increase sales and gain more customers. However, many of these customers don’t become loyal to your company. They do not contribute to your company’s long-term success.

Why is Branding Important?

You need to constantly build up your brand. This includes gaining a loyal following amongst consumers. To do this, you need to inspire an emotional connection between you and your customer. These are the customers that will come back to you time after time. They are more concerned with a quality company than they are a fly-by-night sales scheme.

To achieve long-term success, you want this balance to be about 60% branding and 40% activation. Sadly, many companies cannot pass up the opportunity to make quick money. It is important to realize that oftentimes, quick money leads to great sacrifices. When company leaders decide to worry about the “now”, they forget about the tomorrow. In so doing, they fail to build customer relationships. This shortsightedness can cause long-term failure.

A Healthy Balance

The reason this balance is skewed in favor of branding is simple. If you keep customers happy, they will continue to be customers. At the same time, you want to attract new customers. The hope is that the new customers (at least some of them) will become long-term customers. This way, your customer base continues to grow exponentially.

There are ways to increase your ROI without sacrificing your long-term success:

  • Use a smart content marketing strategy
  • Look to your employees for ideas and build a knowledge bank
  • Teach executives to understand content marketing
  • Focus on qualitative ROI in addition to quantitative ROI
  • Utilize your content marketing experts to help with branding

Essentially, these tricks all require that all of your staff work together. This way, content-marketing impacts branding, and vice versa. It also ensures that the bean counters are just as dialed in as the creative guys.

How Do You Measure Success?

Another important distinction to make is that how you measure success matters. If you simply look at ROI as an indicator of success, you will be doing yourself a disservice. Some companies saw a lower ROI over several quarters only to see that their company’s fundamental value had increased. It is a matter of looking at profitability from a 10-foot view versus a 10-story view.

If you look at your revenue and sales from a 10-foot view, you will see a snapshot of your company. You will see recent sales and short-term sales forecasts. You will know from quarter to quarter how your company is doing. You can’t accurately predict long-term success this way. The snapshot is just too small.

If you look at your company’s value from a 10-story view, you see a much clearer picture. You can see where the company has come from over several years. You will see a years’ worth of performance versus a week. You will be able to forecast, with some confidence, performance trends for the next year or even decade.

An Ideal Approach

In order to predict and sustain long-term success you need balance. As we said earlier, a 60/40 split in favor of branding is ideal. Companies have begun to shift to a 50/50 split. And, while 10% doesn’t sound like a big shift, it is. What this means is that companies are taking that extra 10% and throwing it at low-hanging fruit. This means they are overlooking long-term investments. This means that you sacrifice customer relationships.

The ideal approach, therefore, is a balance between branding and content marketing strategy. Even if this isn’t exactly set at 60/40, it should be close. You want to put your best content marketing people in charge of content marketing. Have your branding people focus on customer relations. However, it doesn’t end there.

You need to have your content marketing staff work with your branding department. Let them bounce ideas off each other. Let the content department work on building long-term customer loyalty through content marketing. Have the branding gurus find a way to capitalize on ROI while still focusing on their consumer base.

It Ain’t Rocket Science

This isn’t rocket science. The problem is that everyone is so concerned with what the next guy is doing, they lose sight of what they should be doing. There will be companies that make a killing one quarter and disappear the next. Look at companies like Home Depot that have been around for decades and are still “killing it.”

There were stretches where it appeared Home Depot was losing money. However, what they were doing was taking the pedal off of ROI and working on big-picture development. They were investing in their employees. They were building their brand. This cost money. Once the branding started to pay off, the numbers swung way in the positive direction.

The executives and brains at Home Depot knew what they were doing. They were not looking to lose money. They simply wanted to focus on long-term success. They found a formula that works for them. It may not work for everyone, but it works for them.

You can’t survive in today’s marketplace with no content marketing. You have to be somewhat concerned with ROI. However, you have to be careful. Don’t chase ROI all the way to the unemployment line.

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