Marketing Optimization

Optimization Quotient – ‘OQ

The final measuring stick of your marketing strategy is ROI.

Marketing optimization must focus on a quotient of numbers related to quality, quantity and cost. It’s the combination of these that will affect your ROI. The OQ formula states that for ROI to increase, one of the following must occur:

  1. Quantity of response to promotion must increase
  2. Quality of respondents must increase
  3. Cost must decrease

marketing optimization graph

Only one of these needs to occur to improve your ROI. Any good marketing optimization plan will have a strategy for all three.

a)      Cost. ROI improves as costs decrease. While that is obvious, what is often overlooked is the unavoidable process of marketing optimization that must take place. You’ll likely pay more in the short term. While this doesn’t necessarily prevent you from making a profit, it may mean that the price you pay initially will always be higher than after your marketing has been optimized.

b)      Quality. ROI improves with lead quality. Lead quality directly affects your closing ratios, thus optimizing your marketing for lead quality needs to be a strategic focus. You never know what the quality is like until you test, so predicting your ROI before you have done your tests and diligently analyzed the final metrics will be impossible.

c)      Quantity. ROI improves as response levels increase.

The marketing optimization process can be lengthy and indeed, never ends. Some campaigns run for months before achieving profitability, but the good news is that once optimized, the marketing program can likely run for months, and in some cases decades, at a profit.

By Benny Traub