Many Happy Returns on Investments - Why Walk away from an Incredible ROI

I'm angry. One phone call has put me in total bitch mode, so prepare yourselves accordingly.

We just had a cancellation from a shoe company that has been with us for many, many years. This company claims to be cutting back on their advertising budget and complained that their ROI (Return on Investment) was not high enough to stay with the program.

Members of the jury, under oath I hereby swear that this particular company's ROI is 3 times their initial investment (which by the by is unheard of in the direct mail industry). Any other business professional in their right mind would agree, a positive ROI is something to be celebrated and should be held onto for dear life, like a life preserver in an ocean of economic demise.

return on investment.JPG

Are these folks crazy?! What on Earth are these marketing people thinking? All of their costs and expenses have been covered, with an enormous profit to show for it! What are they losing, except their minds?! I could understand their frustrations if they were receiving poor customer service, or if we weren't delivering what we promised. But no your Honor, we have gone above and beyond the call of duty, giving this merchant the leads, customers and profit through hard work and constant determination. How do we get thanked for it? We get chucked into the trash bin with yesterday's newspaper.

Perhaps the marketing professional in charge of this hasty decision is a newbie. Perhaps they're an aged, disgruntled employee who has lost their 401K and wants to stick it to the company. Whoever they are, they are not thinking of the lifetime value of a customer and how that relationship needs to be cultivated and nurtured by continuing to send emails, catalogs and following up to ensure that they continue to come back again and again.

Sometimes you have to spend money to make money. Sometimes you don't get that money back, but it is still money well spent on building brand awareness, getting your name out there and building a lifelong relationship with a customer. We gave you your money back people, and then some! What more do you want? Do you want us to hand deliver your profit in crisp, clean bills in person?

I just don't understand the level of ignorance. It just doesn't make sense. Especially in today's harsh economic times, it is proven that you will lose market share if you pull back on advertising and promotions in order to save money. During the Great Depression, companies that stayed on course were the ones who survived and ultimately ended up capturing more market share. The companies who cut back were the ones who went up in smoke.

I've pled my case. The defense rests.  |  digg it!  |  reddit reddit!  |  Google!

Trackback Pings


No-one has commented on this entry (yet).

Post a comment

Remember Me?

(you may use basic HTML tags for style)