Five things to learn from your ROMI data

May 14, 2021 | Chris Kervinen

Five things to learn from your ROMI data

Five things you should look from your ROMI data

Ok, so you put in the time and effort (and, let’s face it, blood, sweat and tears) into a kick-ass marketing plan, executed on it, sending multiple, beautifully crafted, media types out into the world across multiple media channels — all in the hope that it would win customer’s hearts and (hopefully) wallets.

And it worked! People went whizzing through your check-out and products flying off your virtual shelves.

Now what?

That is the potentially million-dollar question.

The truth, for many marketing professionals, is that it can be too easy to just carry on — focusing on more and more output, instead of taking the time to pause, re-group and look at what did and didn’t work.

But, and we cannot stress this enough, your receipt and transaction data is one of your most valuable assets and, with a little help (from someone like us, for example) it can be used to teach you invaluable lessons about your marketing strategy.

The benefits of ROMI modeling

and what should you be looking from your ROMI data

The channels that work best for you‍

As marketers, you are spoilt for choice nowadays when it comes to where you can reach our target market (or at least try to). TV, direct mail, print, outdoor advertising, social media, online video, the list goes on! This is great news, of course, but it can also be daunting. With all of these choices, how do you know which one to focus on?

Well—if the title of the blog didn’t already give it away—the answer is through your ROMI data.

Premium ROMI modeling will take all that gorgeous sales and marketing data from the campaign in question (which is of utmost importance for reliable results) and compare it with similar periods, campaign types and media mixes to find the true correlation between your marketing activity and your sales. So, not only do you get a clear picture of which channel is performing, you get an accurate one.

How much to spend on each media type

You might think that when you have found a media type that works that you should just throw all of your money in that direction, but hold your horses! It doesn’t actually work like that. In fact, there is an optimum level of spend for all media types—a tipping point, which, once you have gone beyond it, will no longer deliver the same level of return (although there are times when you might want to go ahead anyway, we’ll get to that).

By using ROMI modeling techniques to analyse big data sets it is possible to plot the anticipated sales and margin trajectory of a product across different media types on a curve—finding the optimum amount of spend for each one. Or, in simpler terms, the software will do a lot of extremely complicated mathematical wizardry and then tell you how much of your budget you should spend on each media type to maximize profit and prevent overspending.

As we mentioned previously, however, there might be times that you want to take a hit in terms of return percentage of over-investing in a specific media group. This is when you want to dominate a certain channel for a “blanket” approach to your marketing that offers multiple, repeating touch-points with the customer (and therefore become more familiar). The good news is that with ROMI modeling there to give you all the info, you can make an informed decision on which approach to take.

Understanding how your competition is affecting your sales

Sometimes in life, it can be easy to place ourselves at the centre of the universe. We are so caught up in our own thoughts and actions that we don’t notice what is going on around us and, ultimately, miss the bigger picture. Funnily enough, the same can happen in advertising (bet you weren’t expecting your ROMI content to come with a side of psychological analysis, huh?). While your marketing efforts are going to have a big effect on the returns you see, some results—be them bad or good—may, in part, be attributable to the advertising behaviour of your marketing rivals. Working out where your efforts end and theirs begin, however, is easier said than done.

But, it can be done—with the inclusion of your competitors' media investment information into your modeling. This allows you to retrospectively analyse the relationship between your successes and their failures (and vice versa).

For example, your Black Friday campaigns don’t deliver the results you expected and the poor results are incongruous when set side by side with the investments and activities of comparable periods. You could, of course, put it down failures on your part but, especially in such a competitive sale period, there may be other factors at play—your competitors choosing to dominate one media channel, offering substantially or much larger discounts. Your campaign can be a work of art, but if it is on the same channel as a competitor aggressively advertising cut-throat sale prices, you’re bound to lose sales.

As technology develops it becomes easier to scrape the web and find your competitors' campaign items and discount prices which, when combined with their media investment data, paints a complete picture of what's happening around you so that you can come out on top next time.

Identify trends within your most loyal customer sets

Having customers that are so engaged with your brand that they opt-in to a loyalty program—well, it doesn’t get much better than that. But don’t make the mistake of thinking that because a customer is displaying high levels of engagement that they will look after themselves and need no further investigating.

By using ROMI modeling to analyse a data set that includes customer loyalty data, you can not only see the sale and profit margin difference between standard and loyalty customers but also between the different tiers of loyalty customers also. Not only that, but you can track how each segment’s consumption behaviours develop over time.

All of this information can be used to show you which media mix, product selection, promotion type and message resonates with who better, helping you to market to your most profitable segments in the most effective way.

Impact of selection and price on sales

It probably goes without saying that price can affect sales but it can also be a more complicated relationship than you think. By analysing sales receipt data, you can see how discounting and marketing interplay for specific products, categories and brands. This, in turn, implies customers’ price sensitivity, brand loyalty and overall consumption preferences, helping you to predict how a new pricing strategy would play out or whether there is the room or need for new products within your range.

For example (because who doesn’t love an example?!), let’s look at the possibility of a new product to your range. If you were selling microwaves and a discount campaign attracted a substantial audience without cannibalizing your still full-priced microwaves and this was something you saw repeated in your analytics over time—well, it could imply that there's a considerable market for lower-priced ovens. A data-driven marketing executive would then propose launching a new microwave oven to the market with weaker specs AND a lower price point than the current models.

This is similar to getting customers to try out new products with promotions to see what demand there is at different price points.

If you do decide to expand the range, then you are also better able to decide how to launch (for example, through which channels) and whether a promotion should be applied. On top of that — yep, there’s more — you can get a better idea of the expected time in which products might reach the demand maturity tipping point with the aid of planned marketing activities.


Well, if we were to put it rather bluntly—ROMI modeling is amazing, insightful stuff and it can improve almost every aspect of your marketing effectiveness, taking you to new levels of informed decision making and, as a result, success.

But to be slightly less intense about…

Your marketing data holds a lot of interesting and useful information that it would be a shame to miss out on. It can show you where your marketing efforts should be focused, how much you should invest, how to appeal to your most loyal customers and assist you in launching new products at the correct price point.

Hopefully, that list speaks for itself.

Curious to learn more? Book a demo.


Related articles

Read more posts

No items found!