Partners in Loyalty Marketing Using Tool to Quantify Marketing ROI

Marketing consultancy Partners in Loyalty Marketing (PILM) has developed a proprietary model called the Estimated Return Analysis (ERA), to quantify a loyalty marketing program’s ROI prior to execution.

“Over the past eight months as operating budgets have shifted, we’ve been asked to run ERAs with greater and greater frequency,” said explained Michael Schiff, managing partner of Chicago-based PILM.

PILM relies on a variety of inputs, including research, category dynamics, industry standards, any relevant past performance, and PILM’s own experience, among other sources. The ERA provides the brand with a pre-launch estimate of a program’s ROI, which serves as guidance when selecting between programs and can be a tool in gaining budget approvals.

PILM’s turnaround time for this type of pre-forma evaluation is usually less than two weeks. “To me, the power of the ERA has always extended beyond the projected ROI number delivered at the end,” said Schiff. “ERAs can be used to provide benchmarks for program performance, and can therefore identify any need for mid-program course correction.”

In establishing benchmarks, PILM also identifies which programmatic elements are the primary contributors to that benchmark. This allows marketers to monitor those metrics more closely and make adjustments on the fly.

“The ERA ensures that brands invest in all tactics with their eyes wide open,” said Schiff. “ERAs are fluid in that they take into account any number of variables, including the environment. This ensures that programs are not executed because they have always been executed at this time of the year to this consumer with this offer. It also makes sure that budget cuts do not impact all programs equally and that those with the greatest potential remain.”
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