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<Video
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/>

Business does not exist in a vacuum. Companies analyze not only their previous experiences but also the results of competitors and other organizations. This approach helps to avoid mistakes made by others, adopt best practices in the market, and grow confidently.

However, it's important to compare your business with companies that have achieved success in their field. This led to the development of competitor benchmarking in the second half of the 20th century (benchmarking — derived from the English word "benchmark"). Rules and clear criteria emerged, which are now followed when analyzing one's own company and competitors.

In this article, we will explain what benchmarking is, why it's needed, its types, and the principles it uses.

## What is benchmarking and why it’s important


**Benchmarking** is the analysis of the best businesses in similar and other niches to apply successful practices and correct mistakes in your company. Open information about competitors' activities, including processes, approaches, products, production, and customers, is studied.

**The goal of benchmarking** is to catch up with and surpass other brands in your niche, improve your product or service, and grow revenue. When a company conducts this comparative analysis of competitors, it gains insight into its direction, its weaknesses, and how to fix and improve them.

*For example, your online store delivers products within two days. This may seem like excellent performance if you only evaluate your own metrics. But suppose competitors deliver the same order within a day. Suddenly, your result doesn't seem as good because this factor may be decisive for customers when choosing where to make a purchase. In such cases, the company should study the approaches and processes of competitors to maintain or increase the number of orders.*

Benchmarking is used by established companies aiming to boost their competitiveness. It is also useful when starting a business, as you enter the market. Learning from those who have already succeeded helps set benchmarks and direction. Additionally, evaluating others' experiences provides an opportunity to avoid mistakes already made by others.

**Advantages of benchmarking**

- Improving the company's market position. 

- Enhancing business processes to increase their efficiency. 

- Gaining new ideas for company development. 

- Correcting business management mistakes. 

- Understanding how direct and indirect competitors operate to "stay in the loop." 

- Implementing proven practices from others and saving time on developing your own. 

- Reducing costs by optimizing processes based on other companies' examples. 

- Developing your own criteria for assessing work efficiency. 

- Tracking and predicting industry trends. 

- Improving customer service and user experience.

**Disadvantages of benchmarking**

- Incomplete information about competitor companies. Even a detailed description of processes and practices doesn't provide the full picture of why a company has been successful. Sometimes, the reason for high performance is a strong and talented top manager or another standout individual, without whom the company could never have reached the same level. For example, the house of Gucci [**was revitalized**](https://www.britannica.com/biography/Tom-Ford) by the talented designer Tom Ford, whose name later became a successful brand in itself. 

- Difficulty in integrating others' experiences into your own processes. The specifics of businesses can differ so much that benchmarking examples from other companies may turn out to be unsuitable or useless.

### How benchmarking differs from KPIs

The results of benchmarking are sometimes confused with key performance indicators (KPIs). While both are reference points, there are differences. Benchmarking provides a direction for development and serves only as an example for future changes. KPIs assess effectiveness based on already set goals, making them a more specific measure.

<Note>
Want to learn more about key performance indicators? Read the article "[**Key Performance Indicators: What They Are And How to Use Them**](https://altcraft.com/glossary/key-performance-indicators-what-they-are-and-how-to-use-them)."
</Note>

## Types of benchmarking

Benchmarking practices not only focus on other businesses but are also applied within the company itself. It analyzes both processes and the end product. Therefore, there are several types of benchmarking.

<Table>
|Type|Description|
| ------ | ------ | 
| **External benchmarking** | Comparing your performance and processes to your competitors and those companies whose expertise may be relevant to your niche. |
| **Internal benchmarking** | Analyze the company's performance over the past periods and identify the best ones. Or the performance of the company's departments and branches is compared. The most successful ones share their experience and become an example. |
| **Technical benchmarking** | The features of the company's product are tracked: how useful it is for the client, how it is applied in practice, what it looks like. |
| **Practical benchmarking** | The rules of conducting processes, technologies and ways of organizing work with employees are adopted. |
| **Strategic benchmarking** | The analysis is based on the areas of the company's activities that are related to strategic planning. This includes marketing strategy, innovative approaches, production development, technology and management practices. |
</Table>


## Principles of benchmarking

Conducting benchmarking is a specific type of analysis that follows certain principles:

- **Verification of information is mandatory.** Only reliable data from trustworthy sources should be used. 

- **Agreement on interaction.** Experience exchange happens legally, without data theft or "spying." Management and employees must know that their information is used by third parties. 

- **Process comparability.** Benchmarking analysis compares similar indicators and directions for the most accurate results. 

- **Quantitative evaluation.** Indicators must be clearly and transparently measured to ensure accurate results.


## Benchmarking: stages 

The organization of benchmarking begins with setting goals. Answer the question of which aspects of competitors you want to study and what benefits this will bring you. Possible goals include process improvement, increased efficiency, sales growth, etc. You can choose not only large-scale goals but also test hypotheses in specific areas of work or product features, such as evaluating the effectiveness of packaging design.

After selecting benchmarking goals, several stages must be completed.

1. **Identify the specific processes for comparison and analysis:** management, marketing, production, finance, etc. Understand which areas in your company are lagging or what you would like to improve. 

2. **Develop evaluation criteria to eliminate vague and inaccurate comparisons.** Ideally, provide quantitative or scale-based assessments wherever possible. 

3. **Collect data from your own business.** This is important for the accuracy and clarity of comparisons. To analyze other companies’ practices, you must thoroughly understand your own. 

4. **Select the companies you will analyze.** This depends on your goals and resources. Benchmarking can involve market leaders (not necessarily in your field), direct and indirect competitors. For internal analysis, choose successful departments within the company. 

5. **Define the type and methods of data collection.** Depending on the openness of companies to analysis, data can be obtained from public sources (media, websites, [**social media**](https://altcraft.com/glossary/smm-what-it-is-and-why-businesses-need-it)), interviews, or surveys agreed upon with businesses. You may also use secret shoppers or communicate with suppliers. Another option is direct and open exchange of experience, though not all companies are willing to reveal internal processes, especially to competitors. Some companies, however, make sharing their business model part of their marketing, like Setters agency did. In global practice, [**Netflix**](https://www.amazon.com/No-Rules-Netflix-Culture-Reinvention/dp/1984877860) shared their approaches and rules for building their business model. 


<Img
img="/uploads/netflix_no_rules_book_073b712212.png"
alt="No Rules Rules: Netflix and the Culture of Reinvention"
/>

6. **Analyze the collected data.** Evaluate the product, pricing, processes, personnel management, customer service, and other aspects (depending on your goals). This analysis is conducted by comparing the collected data with your own. 

7. **Adapt the experience to your business.** Make changes and corrections to your company’s processes where weaknesses were identified. Avoid simply copying others' methods. Always consider the broader context, including other factors that contributed to the good results. 

8. **Conduct a post-implementation analysis of the new practices and draw conclusions.** Don’t stop there — keep revisiting the changed processes. As the market evolves, you must continually monitor these changes to maintain and grow your position. In other words, benchmarking should become a regular part of your work.

## Summary

Benchmarking is the process of comparing a company's efficiency with competitors or businesses that have become market leaders in their fields. It also involves analyzing and comparing results within the company: departments, divisions, and branches.

Benchmarking is conducted to identify and implement the best practices that have proven successful, correct mistakes, and adjust operations to improve service, generate new ideas for growth, and increase revenue. Despite its benefits, benchmarking doesn’t always allow for the easy transfer of others' experiences into your own processes, and not all companies are willing to share their business secrets openly.

To conduct the analysis, you need to set goals, identify information sources, develop evaluation criteria, and then draw conclusions and implement the practices. It’s also important to regularly reassess and repeat benchmarking to stay up-to-date and grow.

Benchmarking compares a company's processes to competitors or leaders, aiming to adopt best practices, correct errors, and boost growth and efficiency.

benchmarking-blog.png

About what benchmarking is, why it's needed, its types, and the principles it uses.

Benchmarking: What It Is, Its Types, and Principles

<Video
url="https://www.youtube.com/embed/dC22hVbX0RE?si=KWhiaqS5XLvzSRdI" 
/>

There are probably no other topics surrounded by as many rumors and speculations as the concept of shadowbanning. It’s a situation where a user's account loses reach for unknown reasons. At the same time, major platforms (social networks, video hosting services, etc.) claim that shadowbanning is a myth or they don’t comment on users' concerns and complaints at all.

However, users worldwide share their experiences of being "put in the shadows." They have even identified signs that help recognize a shadowban and ways to combat this situation.

In this article, we will explain what shadowbanning means, how to avoid it, and what to do if it happens to your account.
 
## What is a shadowban

**A shadowban** (or also shadow ban) is a significant reduction in the reach of posts on social networks and other content platforms, as well as the absence of content being shown based on geolocation or hashtags. Engagement drops — likes and comments decrease. Meanwhile, the account remains active and does not receive any warnings, so the author may not even realize something is wrong. The duration of a shadowban is uncertain; it usually lasts from a few weeks to months.

There are theories that platforms use this method to combat unwanted or spammy content. Since the user’s account is still active, they don’t take corrective actions like they would in the case of a block. Meanwhile, significantly fewer people see their content.

### On which platforms is shadowbanning observed

Shadowbanning is particularly discussed in Instagram* and Facebook*. An account becomes visible only to followers (and even for them, visibility decreases), while external recommendations and hashtag appearances disappear.

YouTube denies shadowbanning, but there are instances where channel creators notice that their videos stop gaining views and reactions. Their content also disappears from recommendations.

In Telegram, when a shadowban occurs, the channel becomes unsearchable, and new participants can't be added to chats. TikTok hides comments from users whose accounts are shadowbanned.

## How to check for shadowban

No platform has officially confirmed this type of block, so users won't receive an official notification. However, there are ways to determine if you're shadowbanned.

- **Analyze reach.** A significant drop in views and engagement without an apparent reason over time is one sign that the platform may be reducing your visibility. 

- **Check hashtags.** Publish a post with a low-frequency hashtag and see if it appears under that hashtag. For accuracy, ask friends or acquaintances who follow you to check as well. If they don't see your post under the hashtag, you may be shadowbanned. 

- [**Survey your followers.**](https://altcraft.com/blog/what-is-survey-creation-services) Another way to check for a shadowban is to ask friends and acquaintances if they see you in their feed. If most of them say no, your content is likely being hidden by the platform. You can also create a poll in your stories or write a question in a post. The number of reactions can help you determine if there’s a problem or if it’s simply an issue with your content.

<Img
img="/uploads/example_of_a_survey_of_followers_933d4aa660.jpg"
alt="Survey of followers"
src="Example of a survey of followers on social media"
/>

**Important tip!** Consider all factors that could affect a shadowban. It's also essential to monitor the dynamics. If your reach and engagement drop for just one or two days, it doesn't necessarily mean you're being shadowbanned. Take into account the content topics, external factors (such as widespread VPN outages for platforms that require them), or even platform technical issues.

## It’s not a shadowban

Sometimes, the issue isn't the platform’s algorithms. Decreased reach and engagement can be triggered by:

- **Content.** If you suddenly change your communication style or format, your audience might not understand or engage with it. The same happens if your posts become repetitive and uninteresting. If you initially had a "wow" effect and then followed with ordinary content, don't expect to maintain the same metrics. 

- [**Newsworthy events.**](https://altcraft.com/glossary/what-is-a-newsbreak-its-types-and-how-to-create-it) A scandal or interesting situation can initially increase reach. But once the hype fades and following the story becomes less exciting, your stats will drop. That's why some influencers constantly stir up their audience’s interest with new provocations. 

- **Long absence.** If you neglect your social media accounts and suddenly return, don’t expect high reach right away. Algorithms change rapidly and require consistent content. Don’t blame a shadowban for inactivity — when you return, you’ll need to rebuild your account’s performance from scratch.

## How to get shadowbanned

Online platforms have their own rules and content requirements, so there are no strict guidelines on what to do or avoid. However, certain actions increase your chances of getting shadowbanned:

1. **Buying fake followers instead of real ones.** If such accounts follow you automatically, it's best to clean them up periodically. 

2. **Posting content on forbidden topics.** Always check the public rules on content sharing. Sensitive topics usually include politics, religion, medicine, alcohol, smoking, and banned substances. 

3. **Content theft and lack of originality.** This is disliked by both platforms and users, who might report you. 

4. **Suspiciously high activity.** Posting too much in one day, excessive reactions, or frequently adding and removing users are signs of spamming, which is disliked by algorithms (and real people). 

5. **High number of unfollows.** This often happens when you run contests requiring people to follow your account. After the contest, they may either become inactive followers or unfollow en masse, which harms your account’s reputation on social platforms. The same applies if you manually remove many inactive users at once. 

6. **Using third-party automation services.** Only use internal or platform-approved services. 

7. **Inappropriate or banned hashtags and hashtag overload.** Some hashtags may be hidden by platforms, so check them before posting. Avoid using the same set of hashtags on every post. For example, on Instagram, it’s recommended to use hashtags with high frequency (millions of mentions). 

8. **Trolling or abusive behavior.** Rude comments and disrespectful interactions with other users increase the risk of a shadowban. People may report you, and platforms’ algorithms can now detect offensive language.

## How to get out of a shadowban and avoid it in the future

Just like with its causes, there’s no foolproof way to escape a shadowban once you’ve been hit. However, there are strategies that users across different social platforms have tested with varying degrees of success.

Here are some general rules on how to navigate a shadowban:

- **Carefully review the platform’s guidelines and compare them to your actions.** You might quickly discover what you did wrong and be able to correct it. 

- **Contact support.** Instead of complaining about a shadowban (which platforms usually deny), inquire about the drop in reach and other issues. It could be related to algorithm changes or platform errors. Or they might tell you directly what you're doing wrong. In that case, start following the rules and don’t try to trick the system. 

- **Disable all third-party services linked to your account.** These are often used to automate actions like mass-liking, mass-following, or sending bulk messages. 

- **Stop posting for a few days.** This works best if any connected automation services are also turned off. In some cases, you may need to remain inactive for longer — up to two weeks. 

- **Reduce excessive hashtags in your posts**, especially if you’ve been using too many. 


<Img
img="/uploads/excessive_hashtags_in_posts_9b762d0918.png"
alt="Excessive hashtags in posts"
src="Example of excessive hashtags in the publications"
/>

- **Remove content that could offend others.** This lowers the chance of receiving complaints, which can lead to a full account ban rather than just a shadowban. 

- **Launch an ad campaign or a collaborative project.** This can attract new users and boost engagement. It signals to the platform’s algorithms that your account is trustworthy and genuinely interests your followers. This is the opposite approach to "going silent" but is also commonly used when users suspect they’ve been shadowbanned.

**Important tip!** Regularly analyze your account stats on social media or other content platforms.

## Summary

A shadowban is an unexplained, sudden drop in your account's reach on social media or other platforms. There may also be restrictions on actions, making the user "invisible" to their audience.

How to know if you're shadowbanned: analyze your view statistics, check for banned hashtags in your posts, and ask your followers if they can see your content.

Users get shadowbanned for breaking platform rules, using automation services, being overly active, posting on prohibited topics, or displaying hostile behavior.

To get out of a shadowban, reduce your activity, contact support to rule out technical issues, study the platform’s rules and adjust your account accordingly, remove excessive hashtags and questionable posts. Another option is to run ads or collaborations to grow your audience.

*
*Meta's products are recognized as extremist organizations in the Russian Federation.*

A shadowban limits your account's visibility. Check stats, hashtags, and ask followers. Reduce activity, follow rules, and adjust your content to recover.

shadowban.png

About what a shadowban means, how to avoid getting there, and what to do if this does happen to your account.

Shadowban: Definition, Where Observed & How to Avoid

Shadowban Explained in Detail

<Video
url="https://www.youtube.com/embed/OtvcIA0R5Wo?si=GUMxSzjryGRJwv77" 
/>

Visual search is becoming increasingly popular due to its simplicity and speed. If your business isn’t leveraging image search capabilities yet, it’s time to start. This will help you attract more customers and stay ahead of the competition.

In this article, we'll share tips on how to optimize your website for visual search and which platforms you should focus on.

<Img
img="/uploads/google_lens_67cf64e07f.jpg"
alt="Google Lens identified the location from the photo"
/>

## Who benefits from visual search

Visual search is becoming a key element of a successful [**SEO strategy**](https://altcraft.com/glossary/seo-optimization-what-it-is-and-how-it-works), helping your website attract more users. It’s not just useful for e-commerce; its applications are much broader:

- Visual search can be used to find medical information (e.g., identifying an insect bite). 

- You can find artists or works of art. 

- Gardeners use it to recognize plants and flowers or find similar ones for their gardens. 

- Students can locate study materials or books simply by photographing a cover or page.

To gain a competitive advantage, businesses need to create high-quality, relevant images and provide detailed descriptions.

## How visual search works

Visual search allows people to find information using images. A person uploads a photo to the system to find the product depicted. For example, you can photograph a plant and identify its species or origin through the internet.

<Img
img="/uploads/visual_search_flower_0082f0e8e7.jpg"
alt="Visual search quickly finds flower name and information about it"
src="A visual search quickly finds the flower name and information about it"
/>

Visual search operates as follows: the system receives an image, recognizes it, and searches online for identical or similar pictures.

The search engine selects images, ranks them by relevance, and displays them to the user. It also provides additional information such as names, locations, and prices of the objects.

<Img
img="/uploads/display_of_visual_product_726168f7ed.jpg"
alt="Display of visual product search with prices in online shops"
src="Display of visual product search with prices in online shops"
/>


The search engine uses one or both of the following methods: example-based search (the system looks for images similar to the original based on general features such as shape and color) and metadata search. This metadata includes the image file name and alt text.

Visual search employs two areas of artificial intelligence:

- **Computer vision:** This acts as the eyes of the search engine. Thanks to this technology, the computer "sees" the image just as we do. It analyzes colors, shapes, textures, and other features. For example, the computer understands that the image shows a vase, not some other object. 

- **Machine learning:** This serves as the brain of the search engine. The computer learns to recognize different objects and concepts by analyzing a vast number of images.

Imagine showing the search engine hundreds of pictures of various cats: big and small, fluffy and sleek, of different breeds and colors. The system uses computer vision to "see" these cats in the pictures. By analyzing them, it begins to understand what a cat looks like. As a result, when you show the search engine a photo of a cat it hasn't seen before, it will correctly identify the picture as a cat, even if the image is entirely new to it.

## Why visual search is beneficial for marketers

If you don't optimize your website for visual search, you're missing a significant opportunity to expand your audience and attract users who wouldn't find you through traditional search methods.
 Here are the main reasons why image search plays a crucial role in developing SEO:

**Consumer behavior:** Online shoppers [**prefer visual content**](https://www.forbes.com/sites/forbestechcouncil/2018/04/02/visual-content-the-future-of-storytelling/?sh=2a92cd703a46) over text. [**According to research**](https://www.invespcro.com/blog/the-state-of-visual-search/), over 50% of consumers say that visual information has a greater impact on their purchasing decisions. As more people use smartphones, the role of visual search is continuously growing.

**Improved** [**usability:**](https://altcraft.com/glossary/usability-notion-criteria-for-evaluation-tips-to-improve) One of the main advantages of visual search is the speed and ease of finding the necessary information—simply upload an image. Marketers help people reach their goals faster, whether it's finding a product, information, or something else. This makes the process much simpler.

**Increased conversion and engagement:** Optimizing for visual search expands your brand's audience and makes your business more visible to those searching for products and services through images. Additionally, this type of search boosts user engagement—it stimulates interest in your offerings and encourages users to explore your site in more detail. As a result, this directly impacts sales.

## How to use visual search in marketing

To optimize your site for visual search, focus on the following:

- **Structured data markup:** Use [**schema.org**](http://schema.org) markup on all multimedia files. These data help search engines better understand images and their content. Additionally, they can enable images to appear in rich snippets on Google. 

- **Content quality:** Use clear and original images and videos. Encourage the creation of user-generated content (UGC) through social media, such as by organizing a contest with valuable prizes for the most creative photos featuring your product.

<Note>.
How to use UGC correctly? Read in the article “[**User-Generated Content: What It Is and How It Works**](https://altcraft.com/glossary/user-generated-content-what-it-is-and-how-it-works)”. 
</Note>


- **Product tagging:** Link images to the corresponding product pages through relevant tags. Provide customers with an easy way to make purchases by allowing them to go directly to checkout with one click on the image. 

- **Image quantity:** To make your products more appealing to buyers, use multiple images. This not only enhances the appearance of your website but also attracts more customers through search. By using different keywords for each image, you expand your potential audience, which, in turn, increases sales. 

- **Using real photos:** Replace standard stock images with original ones. High-quality, unique visual materials boost user trust in your site and help improve your search engine rankings. 

- **Image sitemap:** Create a separate sitemap file dedicated to images. With an additional sitemap containing image information, search engines can more effectively index your visual content, increasing the likelihood that your images will appear in search results. This is especially important for large sites like online stores, classifieds, and catalogs. On smaller websites, images are typically indexed without the need for extra settings. 

- **Image filenames:** Use descriptive filenames. Give the image a short, clear name that reflects its content. This helps search engines better understand the image and display it in search results. For example, instead of IMG_13245346.jpg, it's better to use white-wardrobe.jpg. 

- **Image size:** Optimize the size of graphic files—large files negatively affect page loading speed. It's recommended to compress images with minimal loss of quality using specialized graphic editors or online services that support batch image processing. However, the images should not be of poor quality. Content with artifacts or compression traces looks unprofessional and negatively impacts user perception of the site. The recommended minimum width for uploading to the website is 1200 pixels. 

- **Alt text:** Alternative text was originally created to help users understand the content of an image if it failed to load. Search engines use the information from the alt attribute to better understand and index the image's context.


## Visual search tools


Search engines use a combination of artificial intelligence and complex algorithms to analyze, recognize, and compare images during searches. These tools benefit both users and marketers. Below, we'll explore the main tools for visual search.

**Google Lens:** This is a popular visual search service. Users upload a photo from their phone to find relevant information. For example, they can search for objects, text, landmarks, products, and much more.

Google Lens can identify plants, animals, objects, and locations. It can also translate text directly from an image, such as signs. Additionally, it reads QR codes and barcodes and displays products available for purchase. It's even used for solving math problems.

<Img
img="/uploads/how_to_solve_maths_problems_with_google_lkpapens_fd0075581b.gif"
alt="How to solve maths problems with Google Lens"
/>

**Pinterest Lens** is another popular tool, ideal for fashion and design enthusiasts. You can upload any photo and find similar items, interior design ideas, or recipes.

Pinterest Lens can recognize objects in photos and suggest similar options. It's easy to find inspiration for clothing, home, or kitchen. Additionally, special features allow you to see how makeup will look on your face or how an interior item will fit into a room.

<Img
img="/uploads/pinterest_lens_b3fb2c904d.jpg"
alt="Pinterest Lens search. Source: martech.org"
src="Pinterest Lens search. Source: martech.org"
/>

**CamFind** is an app that searches for information based on photos. Simply take a picture of any object and upload it to the app. CamFind will find similar items, provide details about the object, or even show where to buy it. The app can recognize objects, translate text from photos, and even search for information using voice input.

## Conclusion

Visual search uses images instead of text queries. With this technology, users can quickly and efficiently find the objects they need, especially when describing them in words is difficult. Visual search is used in various fields, including e-commerce, design, and fashion.

Visual search allows users to find objects quickly using images, making it especially useful in fields like e-commerce, design, and fashion.

visual-search.png

About how to optimize your website for visual search and which platforms you should pay attention to.

Visual Search: Enhancing Your Marketing through It

Visual Search: How to Use It in Marketing

<Video
url="https://www.youtube.com/embed/8gymFndEoNY?si=9MP4TBXvPYqTPdw7" 
/>

Marketing is a system of consistent actions that lead to results. When a brand enters the market or changes its positioning, various factors are considered for its promotion: the product itself, pricing, sales locations, target audience, and more.

In other words, comprehensive marketing is crucial, not random actions. This is the only way to build relationships with customers who will keep coming back to purchase again and again. To structure the work of marketers, the concept of the marketing mix was developed — a system that reflects all the aspects that need to be worked on to maintain and strengthen a brand's position in the market.

In this article, we will explain what the 7P concept is and why it is important for business.

## How the marketing mix was created

The term "marketing mix" was first introduced in the mid-20th century in the United States. Harvard professor Neil Borden proposed a system of marketing tools needed to promote a brand in 1953. Later, another scholar, Jerome McCarthy, rethought and simplified the idea in the 1960s. This led to the creation of 4P marketing — a set of tools that form a brand strategy to increase product value and profitability.

The concept included the following elements: Product, Price, Place, and Promotion. It was believed that these components were sufficient to conduct comprehensive marketing and achieve results. However, over time, marketers realized that other factors — environment, processes, and people who interact with customers — were also important. Thus, the concept gradually expanded to 5P, 6P, and today, the marketing mix exists as the 7P model. This version was proposed in the 1980s by J. Bitner and B. Booms.

## 7P concept

The 7P marketing mix incorporates the elements of the classic 4P and is supplemented with new ones for a more extensive approach to brand management. Let’s take a detailed look at each aspect of the concept.
 
### Product

This is what the brand will offer to customers and sell. Marketing begins with developing products or services that meet market demands. The product must solve a consumer’s problem and satisfy their needs. No one will buy something entirely unnecessary, minimally useful, or unclear. Therefore, the marketing mix concept starts with developing the attributes of the product or service:

- **Visual style:** This includes the design of the product itself and its packaging (brand style, logo). A clear presentation of what you are selling is crucial. 

- **Positioning:** This defines the role the product will play in the market and who it is created for: whether it is for the mass market or a niche for a specific sector or group of people. 

- **Product features:** This involves the benefits for customers and the uniqueness that will be marketed. 

- **Quality:** This parameter influences not only the price but also how the product is presented. Luxury goods and [**mass-market products**](https://altcraft.com/glossary/mass-market-what-it-is-and-how-to-promote-such-products) differ in quality, and customers in these segments focus on different criteria. Therefore, it is essential to build in the features that will meet the target audience’s expectations. 

- **Assortment:** The product should adapt to customer needs and offer various options. Variety increases the chance of reaching more people and raises the likelihood of sales.

### Price

The cost of the product is the second component included in the 7P marketing mix. Pricing is determined by the business's strategic goals, product quality, competitive environment, production costs, brand recognition, and other criteria.

Key considerations in pricing:

- **Profitability:** The product's price should cover the costs of its creation and generate profit. It’s essential to calculate all expenses accurately. 

- **Variability:** Depending on the seller's operations and the type of sales (wholesale, retail), prices are set to be market-appropriate and consider different marketing channels. The price may also vary based on the product or service's configuration. 

- **Product status:** Premium segments are initially priced higher than economy ones. Therefore, it's crucial to determine the category in which the product will be sold right from the start. 

- **Promotion:** Pricing includes marketing costs: promotions, discounts, events, etc. Possible conditions for customers are outlined, such as a brand never reducing prices by more than 20% or avoiding sales altogether. 

- [**Seasonality:**](https://altcraft.com/blog/seasonal-marketing) Some products are not in demand year-round, which should also be considered when setting prices. During the peak season, it’s important to generate enough income to offset the decline in demand during less active periods.

### Promotion


This includes the marketing strategy and all the tools used to increase brand awareness and sales. This element of the 7P concept is responsible for the information the customer receives about the product, as well as the right place and time.

Promotion typically involves the following components:

- [**Audience segmentation:**](https://altcraft.com/glossary/market-segmentation-what-it-is-its-types-and-main-stages) The customer base and potential buyers are divided into groups based on similar characteristics to provide the most accurate offer to each. Personalization is also used to improve results. 

- **Advertising budget:** A set amount is allocated in the promotion for attracting new customers. The return on investment is also calculated. 

- **Communication channels:** Tools and platforms where the company interacts with the audience, including email newsletters, SMS, push notifications, messaging apps, media, and other online and offline resources. 

- **Event marketing:** Events are a part of brand promotion, so planning and including them in the strategy is essential. 

- **Analytics:** Marketing activities should be quantified to monitor promotion, adjust strategies, and understand their effectiveness. Brands collect audience data for analysis and offer personalization. For example, [**CDP platforms**](https://altcraft.com/en/) are used for this purpose.

<Note>
If you are looking for a platform to automate your marketing, we recommend [**scheduling a demo**](https://altcraft.com/en/setupDemo) with our experts to learn how to maximize the efficiency of Altcraft Platform.
</Note>

### Place

These are the points where the product will be sold: online and offline platforms. Locations are chosen where potential buyers are present. The method of distribution depends on the product's characteristics, price, and storage conditions. The sales location should be accessible to [**the target audience**](https://altcraft.com/glossary/target-audience-why-to-define-it-how-to-classify-and-segment-it), and the purchasing process should be clear and simple.

Key considerations when choosing a distribution method:

- **Product features:** Most products can now be sold online, but there are categories that buyers prefer to evaluate offline, especially expensive items. There are also digital products that are only sold online. 

- **How customers search for products:** To determine the sales platform, it’s essential to understand where potential buyers search for information about the product or service. Based on this data, distribution channels are selected: online or offline stores, social media, and other platforms. 

- **Geography:** The territory where the product is sold and the ambitions for expanding the product's location are considered. 

- **Sellers of your product:** There are options to sell through your own outlets or to distribute products through partners and dealers. In this case, a motivation system for distributors and working conditions are developed.

### People

Brands are created and promoted by people, which is why this element was added to the expanded marketing mix concept. This refers to everyone who interacts with customers directly and indirectly, as well as those who influence product choices. This includes salespeople, company managers, "opinion leaders," and brand advocates — consumers who buy from you and promote your brand without payment. It’s important for a business to establish effective communication between these people and the potential audience.

Methods and tools used for this include:

- **Corporate culture:** Internal processes and communication within the company reflect on customer interactions. Therefore, building a strong culture is essential for providing high-level service. 

- **Training:** To communicate effectively with customers, employees must be knowledgeable in their field and possess communication skills. Thus, it is the responsibility of the leadership to organize training that aligns with business goals. 

- **Motivation:** Maintaining high levels of service and sales is possible when employees are motivated and perform their duties diligently. For this, businesses need a system of incentives (both material and non-material) that keep the staff "in shape." 

- **Loyalty programs:** To encourage customers to continue buying and recommending your brand, it’s important to motivate them as well. This usually involves bonuses, special conditions, promotions, and well-established communication. 

- [**Working with opinion leaders:**](https://altcraft.com/blog/what-is-influencer-marketing-how-to-build-strategy) Strategies for working with influencers aren’t limited to paid advertising. This can include joint media projects, product creation, or even becoming a brand ambassador.

### Physical evidence

A customer's purchase decision is often influenced by what they see around them: from the product's packaging to the store's interior and the staff's appearance. The design of your office and branded promotional materials also plays a role.

All of these elements create an atmosphere and the right mood that encourages purchases.

In the online world, factors like a well-designed, visually appealing website, social media pages, and other brand accounts, as well as digital materials from the company, have an impact on the customer.

### Process

This refers to the system of interaction between the company and the customer, including communication processes that influence purchasing decisions. This encompasses the speed and quality of service, delivery, and other elements that guide the customer through [**the sales funnel**](https://altcraft.com/glossary/sales-funnel-what-it-is-its-types).

Interaction processes should be as convenient and comfortable as possible for users of the product or service. This helps maintain customer loyalty, encourages repeat purchases, and prompts customers to recommend your brand to others. To improve service quality, customer feedback is collected, and analytics are used to identify areas where processes may be "lagging."


## Summary

The 7P marketing mix is an expanded version of the 4P model, which includes additional elements for brand strategy. The concept consists of marketing tools and methods that work to promote products and services, as well as to increase sales and brand awareness.

Originally, the 4P model included the following components: Product, Price, Promotion, and Place. In the 7P concept, three more elements were added to reflect the modern realities of the market and business development: People, Physical Evidence, and Process.

The 7P marketing mix expands the 4P model, adding People, Physical Evidence, and Process to adapt to modern market and business needs.

marketing-7-p.png

About what the 7P concept is and why it is important for business.

Marketing 7P: a Comprehensive Approach for Your Business

<Video
url="https://www.youtube.com/embed/1yvQSkCp66E?si=Skk-SLwn25QKnpOM"
/>

Imagine this: users open your app and find exactly what they're looking for. They keep coming back for more. That's the power of personalization — it creates a unique experience for each customer.

Sounds great, but how do you make it happen without a huge team? The answer is simple: start by personalizing your communications.

In this article, we'll explore how to personalize mobile apps and effectively engage users.


<Img
img="/uploads/spotify_offers_personalized_392d4fb573.jpg"
alt="Spotify offers personalized weekly playlists"
src="Spotify offers personalized weekly playlists, carefully crafted to match individual user preferences. Source: flightdigital.co.nz"
/>

## What is App Personalization?

Personalization means tailoring the app's functionality to each individual user. It's based on data about user behavior, preferences, and needs.

There are many ways to implement it: from [**personalized push notifications**](https://altcraft.com/blog/mobile-marketing-101-push-notifications) and welcome screens to adapting the app's content and features for each specific user.

## Why You Need Mobile App Personalization 

Thanks to personalization, you create a truly engaging experience for each individual. Here's why it's beneficial:

- **Increased engagement**. By offering what the user truly needs, you make your app indispensable.
 
- **Higher conversions**. Targeted messages and offers encourage people to make more purchases.

- **Reduced user churn**. Increased loyalty means fewer people are likely to leave.

## How Personalization Works

There are many ways to personalize. They can be divided into two main categories:

- The first is **user experience personalization**, where the app adapts its functions to a specific person. For example, a fitness app provides training programs tailored to the user's needs. In this case, the person specifies their fitness goals themselves.

- The second is **contextual personalization**. Here, the app analyzes user actions in real time. *For example, it suggests products based on the user's location, or recommends additional purchases, taking into account previous orders. In other words, the app interacts with each user individually, taking into account their specific situation.*

Combining these two approaches unlocks a vast array of experimental possibilities. You can create a comprehensive, personalized user experience for your application. 

For content-based applications, display the most relevant content directly on the home screen. In an online store, allow users to save their favorite products. Then, leverage this data to send [**personalized messages**](https://altcraft.com/glossary/personalization-what-it-is-and-why-personalized-marketing-matters).

<Img
img="/uploads/amazon_app_9a884e7193.jpg"
alt="Amazon app"
src="For example, in the Amazon app, you can add items to a list"
/>

## How to Personalize Mobile Apps 

Let's explore some effective strategies for tailoring mobile apps to individual users. 

### Segment Users Based on Behavior 

This segmentation is based on analyzing user data, including their in-app actions (such as purchases made) and preferences (like music listened to). This divides users into groups with similar behaviors and tailors content based on their actions and interests.

<Img
img="/uploads/kindles_personalization_e8de46a88d.jpg"
alt="Personalization of books"
src="Kindle’s personalization"
/>

**Create more** [**detailed segments**](https://altcraft.com/help-center/manage-customer-database/database-segmentation-for-email-newslettering). Once you've gathered enough customer data, group users based on multiple conditions and usage patterns. For instance, segment people who:

- Have made at least one purchase in the last month; 

- Haven't opened the app for more than five days. 

Then re-engage them with a push notification offering a discount on their next purchase.

**Classify app users by engagement level.** For example, you can identify segments with the highest potential value: "gold" customers, "silver," and "bronze." "Gold" consumers can be offered more loyalty programs and discounts.

###Communicate with customers across multiple channels 

Utilize various communication channels for maximum impact. For instance, send personalized messages via push notifications, email, SMS, or [**within the app itself**](https://altcraft.com/blog/in-app-advertising-what-it-is)

<Note> 
To maximize the effectiveness of omnichannel marketing, try Altrcfat — a CDP platform that ensures high-quality customer interactions across various channels. 
</Note>

**Utilize alternative communication methods if a customer doesn't open your message.** This way, you'll reach customers through the channels they interact with most frequently. Imagine users who don't open your push notifications. In this case, send them a message via email or SMS. But, of course, avoid spamming.

You can also combine channels: for example, you send a user a push, they click on it, and they're taken to the app where an in-app message with details awaits them.

###Personalize Your Push Notifications

Push notifications are a great way to engage and retain users, but generic messages often get ignored. Personalized notifications, on the other hand, are four times more likely to be noticed, [**according to Leanplum**](https://www.leanplum.com/glossary/android-push-notifications/).

For example, instead of sending a message like "You have items in your cart. Please buy them," you send a personalized push: "(Customer's Name), you left a Hawaiian pizza in your cart!"

<Img
img="/uploads/push_notification_from_duolingo_c10e53f91c.jpg"
alt="Creative push notification from Duolingo"
src="An example of a creative push notification from Duolingo — the character tells you how long your streak is"
/>

### Personalize In-App Messages

In-app messages are a great way to communicate with customers while they're actively using your product. Here are a few helpful tips:

- Show messages at the right time. For example, send an offer to place an order to a user who has opened the app for the second time this week.

- Segment users for different in-app messages. For instance, target users based on their activity, experience, preferences, and previous actions.

###Ensure Messages and App Content Align Seamlessly

Messages and the overall user experience should complement each other. If they're inconsistent, users are likely to get confused. 

Highlight valuable features in your notifications that users might miss. A good approach is to directly link users to the relevant section so they don't have to search for it themselves.

Encourage users to take specific actions, such as using certain features or placing an order. For example, in your food delivery app, recommend a particular restaurant or dish based on their past orders and preferences.

###Leverage Location-Based Personalization 

This type of personalization is a powerful way to boost engagement. It's particularly beneficial in industries like travel, food delivery, and retail.

###Send Messages at the Right Time 

Choosing the optimal time and frequency for sending messages is crucial. Sending notifications at the right moment significantly increases their effectiveness. Manual scheduling isn't the most efficient approach — it's better to utilize self-learning algorithms like those found in Altcraft Platform. The ML module will determine the best time to send push notifications.

### Utilize A/B Testing 

Through A/B testing, you can [**experiment with various elements**](https://altcraft.com/features/mvt) such as sending times, design, text, calls to action, and links. This will help you determine which messages resonate best with different users.

## Levels and Types of Personalization 

Personalized marketing doesn't always require a highly individualized approach to each user. More general methods can also be used. Let's learn more about the levels of personalization below.

### Promotions for Everyone 

This is the most common type. These are promotions designed for a wide range of consumers and cover all products. There's no personalization here, and no special technologies are required. Simple mass distribution of discount coupons is all that's needed.

<Img
img="/uploads/promotions_for_everyone_37dc29504f.jpg"
alt="Promotions for Everyone"
/>

### Loyalty Program Promotions 

These offers are restricted to a specific manufacturer or a particular group of products. With this approach, you provide customers with special terms, such as bonus points, gifts, or simply discounts until a certain date.

### Targeted Offers
Promotions designed specifically for a particular segment of customers are called targeted offers. Customer segmentation is based on various criteria, including demographics, purchase history, and other factors.

### Personalized Offers

Here, you focus on narrower audience segments. 

This highly popular approach in modern mobile marketing involves dividing users into groups based on various criteria. Then, the most relevant offers are selected for each of these segments. For instance, instead of sending bonus points to the entire audience, you could limit them to customers who recently celebrated their birthdays.

### Tailored Offers

The pinnacle of personalization is programs created specifically for an individual customer, taking into account their personal information and interaction history. Prime examples include automatically generated playlists based on a user's musical preferences.

### Types of Personalization

- Personalization for improved usability: Here, you suggest to the customer the nearest store or offer to repeat an order.

- Reminders: Here, you can inform the user about a discount on a product in their cart.

- Motivation: You can send the user a message encouraging them to continue their lessons ("You haven't studied Spanish for 5 days") or return to listening to an album.

##Challenges of Personalization

### Lack of Suitable Tools

Many retail companies consider data collection and processing to be the primary challenge in personalizing the customer experience. This is often due to a lack of resources for implementing and maintaining the necessary technologies.

###Data Errors

Personalization in mobile apps is based on user information. The more accurate this data, the better the app can adapt to each customer. However, if the information is incorrect or outdated, it can ruin the user experience. For example, if a person mistakenly clicks on a product they don't need, and the app then recommends similar products, it will cause a negative reaction. Give users the ability to opt out of irrelevant suggestions — for example, by allowing them to remove items from recommendations using a special button.

<Img
img="/uploads/aliexpress_9ad5da105a.jpg"
alt="The AliExpress feed"
src="After accidentally clicking on a fishing product, the AliExpress feed was flooded with fishing gear recommendations"
/>

### Data Security Challenges 

Many people are willing to share their information in exchange for personalized offers. [**About half of users**](https://www.blog.udonis.co/mobile-marketing/mobile-apps/mobile-app-personalization) don't mind if a brand uses their purchase history.

However, it's important to handle user privacy with care. Be as transparent as possible about data collection and usage. Avoid [**data breaches**](https://altcraft.com/blog/how-to-respond-to-data-breaches).

## Conclusion 

Personalization is an integral part of a successful mobile application. With personalization, you create a product that precisely meets the customer's needs and makes interacting with the app more enjoyable.

However, it's important to remember that effective personalization is impossible without respecting user privacy. Only a balance between a personalized approach and protecting personal data will help the app gain trust and popularity.

In this article, we will analyze how personalization works, as well as how to personalize mobile applications and effectively engage users.

what-is-mobile-app-personalization.png

About how to personalize mobile apps and effectively engage users.

What Is Mobile App Personalization and How to Use It

Mobile App Personalization: How to Use It

<Video
url="https://www.youtube.com/embed/KoB1iuxODE8?si=gvegnrGqBNJ9RmNa"
/>

The effectiveness of mobile applications and online services is closely tied to user activity. If people are logging in and using the service, it indicates that the developers' idea is successful and will generate revenue. It is important to track user behavior and conduct analytics to understand the problems and growth areas of the product.

This issue is addressed by product metrics measuring activity over a day (DAU), a week (WAU), and a month (MAU). The time tracking interval is chosen depending on the type of application and the tasks it solves. DAU, WAU, and MAU metrics reflect how popular the product and individual solutions are.

In this article, we will discuss why it is important to track how many users remain active over different time intervals. We will explain the correct calculation of results and ways to influence them.

## DAU metric

The DAU indicator denotes how many active users logged in and/or performed an action in the application in one day (Daily Active Users). Only unique visitors per day are counted. If one person opened the product multiple times, only the first entry is considered.

*Example:*
*300 people downloaded an app to keep a diary. On the second day, 150 of them logged in. Therefore, DAU = 150. Even though some used the app multiple times, only the first interaction is counted.*

### When to apply the DAU metric

Counting active users per day is suitable when the application or service is designed for daily interaction: calendars, planners, habit trackers, games, music, and so on. 
## WAU metric


The WAU indicator reflects the product's weekly active users (Weekly Active Users). Similar to the daily activity metric, only unique visits are counted, but WAU is not the sum of DAU over seven days.

*Example:*
*A banking app was installed by 200 people, and 70 of them logged in at least once during the week. Therefore, WAU is 70.*

### When to apply the WAU metric

This metric is relevant for services/apps intended for regular use, but not necessarily daily. These include health trackers, delivery services, messengers, financial tools, and others.

## MAU metric

The MAU indicator counts users who accessed the product at least once a month (Monthly Active Users). This metric is calculated separately and is not the sum of DAU or WAU.

*Example:*
*A flight booking app was downloaded by 1000 people. Within thirty days, 300 users logged in once, and another 150 logged in three or more times. However, for MAU, only the first login is counted, so the metric is 450.*

### When to apply the MAU metric

MAU is relevant for platforms that do not require daily or even weekly usage. These include services for booking travel, paying taxes, utilities, marketplaces, and so on.

## How to accurately calculate MAU, WAU, DAU

While product metrics do not require complex formulas, there are nuances in their calculation that should be considered.

**Define active users in advance.** It’s essential to specify who counts as an active user. Simply opening an app may not indicate effectiveness, especially in services where specific actions matter. For instance, a user might click on a marketplace app and immediately exit. In such cases, the activity should be defined as viewing products, adding items to the cart, or making a purchase.

**Determine the appropriate time Interval.** Choose the right time interval to track activity. Daily DAU metrics are not relevant for services used infrequently and might incorrectly suggest inefficiency. For example, it would be unreasonable to expect users to log into a fitness club app every day if it mainly functions for class bookings, as few people attend daily workouts.

**Consider external factors in calculations.** Account for external influences when calculating metrics. Marketing campaigns aimed at attracting new users can temporarily boost MAU, WAU, and DAU, which might drop after the campaign ends. This doesn’t necessarily indicate a decline in service quality. News events can also impact user activity, such as reports of widespread food poisoning potentially reducing orders through food delivery apps.

[**Segment your audience.**](https://altcraft.com/glossary/market-segmentation-what-it-is-its-types-and-main-stages) Understanding what attracts new users versus long-term users is crucial. Their needs may differ significantly. Additionally, segment users by time zones to accurately track daily activity (especially for DAU), by devices, and by payment types (one-time purchases, subscriptions, etc.).


## Why calculate MAU, WAU, DAU

These metrics are crucial for understanding the real popularity of a service or application. The number of downloads on the marketplace alone doesn't provide a complete picture, as users might not even open the product after downloading it.

Therefore, DAU, WAU, and MAU are calculated to:

**Monitor the proper functioning of the application/service.** Reduced activity can sometimes be linked to system glitches and errors. Tracking these metrics allows for quick detection and resolution of such issues.

**Evaluate marketing communications and advertising.** Tracking these metrics helps assess how well marketing efforts attract [**the target audience**](https://altcraft.com/glossary/target-audience-why-to-define-it-how-to-classify-and-segment-it), rather than just random users. It also helps measure the effectiveness of specific campaigns aimed at increasing activity and engagement, which is vital for planning future budgets and advertising strategies.

**Test new features.** User activity metrics reveal whether updates are relevant. They help identify which features should be improved or removed to enhance user experience.

**Attract investments.** Stable and growing user activity demonstrates the product's success. For investors, this is a strong incentive to invest, as it indicates a high likelihood of profitability and return on investment.

**Stay relevant in a competitive environment.** Tracking daily, weekly, and monthly activity metrics, and comparing them with competitors, highlights the need for changes or improvements to well-performing features.

## How to improve DAU, WAU, and MAU

Metrics are not static; they are influenced by various factors. Therefore, creators of digital products can adjust these metrics through marketing tools and technical improvements.

Key factors for improving metrics:

**User-friendly interface and attractive design.** Your product should stand out on the user's screen and be intuitively understandable. Complex action scenarios that require a lot of time will not motivate users to return and stay active.

<Img
img="/uploads/attractive_interface_of_netflix_home_page_df0b22d410.png"
alt="Example of attractive interface of Netflix home page"
src="Attractive interface of Netflix home page"
/>

**Stable product performance.** Constant errors, crashes, and slow customer support responses will reduce user activity as they visit applications/services less frequently. Therefore, it is essential to ensure everything works correctly, respond quickly, and resolve issues promptly.

**Content diversity and personalization.** In today's market, with numerous offerings, it's crucial to study user interests in detail, monitor their changes, and adapt accordingly. Don't be afraid to be creative with your content and analyze audience preferences to make precise proposals. This way, users will engage with your products more often.

<Note>
To learn more about content personalization, read the article [**Personalization: What It Is and Why Personalized Marketing Matters**](https://altcraft.com/glossary/personalization-what-it-is-and-why-personalized-marketing-matters).
</Note>

An effective way to diversify content is by introducing gamification elements and a system to reward user activity. 

**Consistent communication with the audience through push and email notifications.** Keep users informed about promotions, discounts, new features, and interactive events in your application or service. Continuing to engage with users within the app is also crucial. Therefore, onboarding and a well-structured communication system are necessary for ongoing interaction.

<Img
img="/uploads/email_promotion_from_sephora_1faa5a73ff.jpg"
alt="Example of email promotion from Sephora beauty store"
src="Email promotion from Sephora beauty store"
/>


**Conduct analytics and respond to user feedback.** Listen to customer reviews to continuously improve your product. Conduct audience preference research, such as custdev, A/B testing, and other methods.

It's important to assess the effectiveness of your service or application from various angles, not just by focusing on WAU, MAU, and DAU. Typically, additional metrics are considered, such as the Sticky Factor, LTV (Lifetime Value, the total revenue from a customer over their lifetime), conversion rates, CAC (Customer Acquisition Cost), and others.

## Summary

MAU, WAU, and DAU are metrics that measure user activity over different time periods: thirty or thirty-one days, seven days, and one day. They are used to assess the popularity of an app or online service, evaluate marketing effectiveness, gauge the impact of new features, and attract investment.

To calculate these metrics, it’s important to define what constitutes user activity, choose the right tracking period (day, week, month), consider external factors, and segment the audience.

To increase MAU, WAU, and DAU, strategies such as targeted messaging, personalization, engaging content, and continuous interface improvements, along with ongoing analytics, are employed.

MAU, WAU, and DAU track user activity to gauge app success. Boost them with targeted messaging, personalization, and engaging content.

metrics-mau-wau-dau.png

About why to track how many users remain active at different time intervals, as well as about the correct calculation of results and ways to influence them.

MAU, WAU, DAU: When to Apply & How to Improve These Metrics

Metrics MAU, WAU, DAU: When to Apply and How to Improve

<Video
url="https://www.youtube.com/embed/J3hjHssSZ1A?si=M-Cpm4tBjpXY98fX"
/>

## What is ROMI?

**ROMI, or Return on Marketing Investment**, is a metric used to evaluate the effectiveness and profitability of marketing campaigns or activities.

It shows whether the investments generate revenue. The uniqueness of ROMI lies in its focus specifically on marketing investments, not on general investments.

The formula for calculating ROMI varies depending on the specific conditions and goals of the campaign. Typically, ROMI is calculated as follows: first, subtract the marketing costs from the revenue generated, and then divide this result by the marketing costs. The metric is expressed as a percentage.

**ROMI formula:**

<Img
img="/uploads/romi_formula_d3107781a2.jpg"
alt="ROMI formula"
/>

**Example of calculating ROMI in practice:**
*ROMI = (revenue $200,000 from the marketing campaign – costs $50,000 on the marketing campaign) / costs $50,000 on the marketing campaign = 3 or 300%.*

## How ROMI helps advertising strategy

Knowing ROMI gives an understanding of whether you are incurring losses or making a profit compared to the amount spent on marketing. You can also calculate the earned amount.

Additionally, it helps in planning the marketing strategy for the next quarter. It is recommended to review the metric every three months.

<Img
img="/uploads/romi_in_marketing_strategy_planning_cc9d566731.jpg"
alt="ROMI in marketing strategy planning"
/>

It is essential to determine the effectiveness of current efforts and their impact on your company in the future. You can allocate time more wisely and increase the productivity of the marketing team. Or direct resources where they will be most productive.

Return on Marketing Investment is considered good if it is above 100%. This indicates that the money invested in marketing generates profit.

### Who should pay attention to ROMI

ROMI is a metric that various business stakeholders should pay attention to:

**1. Marketers.** They evaluate the effectiveness of campaigns and other marketing activities. This helps them understand if the chosen strategies are profitable, make data-driven decisions, and allocate resources wisely.

**2. Executives.** They determine the overall efficiency and profitability of the marketing department. With ROMI, they justify marketing budgets and identify the priorities of different activities. ROMI also shows the impact of various campaigns on the organization’s financial performance.

**3. Finance department.** They focus on ROMI to assess the profitability of marketing investments and how it aligns with the organization's financial goals. ROMI helps in proper budget allocation and tracking effectiveness.

**4. Business owners and leaders.** ROMI provides insights into how effective marketing efforts are in driving company profits. Through ROMI, they evaluate the overall strategy and determine investments in activities.

**5. Stakeholders and investors.** They need to understand the effectiveness of marketing campaigns as it impacts the financial performance and growth of the organization. Through ROMI, they assess the contribution of the marketing department to the company's profitability and market position.

## ROMI for short-term and long-term effectiveness

### Short-term effectiveness

It provides insight into how marketing campaigns and other initiatives instantly impact profit. By comparing the revenue from a specific campaign with its costs, marketers evaluate short-term profit and the effect of their efforts. This way, they analyze which campaigns bring quick results and adjust their strategies accordingly.

*For example, a company launches a short-term advertising campaign during the holiday season, spending $10,000 on ads. This brings in $30,000. The ROMI for this campaign is: ($30,000 - $10,000) / $10,000 = 2 or 200%. This means that for every dollar invested, the company earned $2 in profit in the short term.*

### Long-term effectiveness

By tracking the impact of ongoing investments over an extended period, marketers determine the success of long-term strategies aimed at increasing revenue and customer acquisition.

*For example, a company invests in brand positioning and customer retention programs throughout the year, spending a total of $500,000. By the end of the year, the company's revenue increased by $2 million. The ROMI for this long-term marketing strategy is: ($2,000,000 - $500,000) / $500,000 = 3 or 300%. This indicates that for every dollar invested, the company earned $3 in profit over the year.*

Considering ROMI for both short-term and long-term effectiveness, marketers gain a comprehensive understanding of the efficiency and profitability of their marketing activities.

## ROMI compared to other marketing metrics

ROMI provides valuable insights into the financial impact of marketing activities on company profits by calculating the return on marketing investments. However, it is important to consider other metrics to get a full picture of marketing effectiveness.

ROI, CAC, CPL, CLTV, and conversion rate—all these metrics offer additional perspectives on various aspects of marketing performance. By analyzing multiple metrics, marketers can make informed decisions, optimize strategies, and allocate resources efficiently.

Let’s compare ROMI with other marketing metrics, highlighting their unique features and how their combination helps assess marketing effectiveness.

### ROMI vs ROI

**ROMI (Return on Marketing Investment) and ROI (Return on Investment)** are interrelated metrics used to evaluate the financial performance of marketing efforts, but they differ in focus:

- ROI is a general financial metric that measures the total return generated from any investment, including marketing. 

- ROMI calculates the return specifically on marketing investments.

<Note>
How to calculate ROI? Why is this metric important for businesses? Read the article "ROI: What It Is and Who Benefits from It."
</Note>

### ROMI vs ROAS

**ROAS (Return on Advertising Spend) and ROMI (Return on Marketing Investment)** are metrics for measuring the effectiveness of marketing efforts, but they focus on different aspects of performance.

- ROAS is a metric used in online advertising to evaluate the revenue generated from advertising investments. It measures the efficiency of specific advertising campaigns by calculating the revenue per dollar spent. 

- ROMI is a broader metric that encompasses all marketing investments, not just advertising spend.

<Note>
For more details on the differences between ROI, ROMI, and ROAS, read the article [**"What is the Difference Between ROI, ROMI and ROAS."**](https://altcraft.com/blog/roi-romi-roas-difference)
</Note>

## Advanced approaches to ROMI

Understanding ROMI leads to creating a more sophisticated strategy than relying solely on ROAS and ROI metrics.

It's important to know that not all investments are equal. Sometimes, it's essential to understand how different marketing goals perform in terms of profitability.

In one of his books, Rex Briggs introduced the term ROMO (Return on Marketing Objectives) to encourage marketers to use different metrics for various tasks. Not all of these tasks are profit-related; some focus on brand awareness or perception.

It is possible to break down ROMI calculations by campaign or by where these campaigns are in [**the sales funnel**](https://altcraft.com/blog/what-is-sales-funnel) (top-of-funnel activities like social media tags or organic website traffic; bottom-of-funnel activities like sales and conversions).

## Frequently Asked Questions: ROMI

### 1. Why is ROMI becoming a popular metric among marketers?


ROMI measures marketing effectiveness comprehensively, enabling better resource allocation and budget optimization. It requires justifying marketing expenditures and is easily calculated using digital tools.

### 2. How often should ROMI be analyzed?

The frequency of ROMI analysis depends on various factors: goals, business nature, and campaign duration.

For short-term activities, ROMI can be analyzed weekly or monthly to capture fleeting trends and adjust strategies promptly.

For longer-term marketing efforts, quarterly or annual ROMI analysis is suitable.

### 3. In which industries is ROMI more important?

ROMI is valuable across different industries and sectors. For example:

1. Retail companies often invest significantly in marketing to attract traffic, increase sales, and strengthen [**customer loyalty**](https://altcraft.com/blog/customer-loyalty). 

2. Consumer packaged goods (CPG) companies heavily rely on marketing to promote their products, enhance brand popularity, and boost sales. 

3. Telecommunications companies invest substantial resources in marketing to acquire new customers, retain existing ones, and promote services. 

4. In the financial sector, marketing plays a crucial role in acquiring new clients, building trust, and promoting various services. 

5. Technology-related companies often allocate substantial funds to marketing efforts to build brand awareness, [**generate leads**](https://altcraft.com/glossary/what-is-lead-generation), and advertise products.

### 4. How to improve ROMI?

Improving return on marketing investment requires strategic planning, data analysis, and continuous optimization. Here are several strategies to help improve your ROMI:

**1. Set specific and measurable goals.** This focuses efforts on priorities and tracks progress effectively.

**2. Analyze data.** Monitoring [**key performance indicators (KPIs)**](https://altcraft.com/glossary/key-performance-indicators-what-they-are-and-how-to-use-them), conversion rates, customer lifetime value (CLV), and cost per acquisition identifies areas for improvement.

**3. Segment your target audience.** Analyzing and segmenting the target audience tailors advertising messages and strategies to specific customer groups.

**4. Test and optimize your campaigns.** Conducting A/B testing adjusts messages and enhances communication channels.

**5. Invest in marketing analytics.** Utilize tools and platforms for analytics to delve deeper into data and optimize your efforts.

**6. Foster collaboration between marketing and finance departments.** Improve communication and cooperation between your teams.

**7. Adjust marketing spend.** Regularly analyze the results of various marketing channels and campaigns to determine where your advertising investments yield the highest ROMI.

**8. Focus on customer retention.** Enhance customer retention processes to maximize the value of your initial customer acquisition investments and thereby improve ROMI.


### 5. Can ROMI be calculated for both online and offline marketing campaigns?

Yes, it can. Whether it’s an online campaign aimed at driving website traffic and conversions, or an offline campaign targeting a local audience through billboards, ROMI shows the return on marketing investments.

Tracking ROMI for both online and offline campaigns provides insight into which channels and strategies deliver the highest return on investment. This information helps optimize marketing budgets, make data-driven decisions, and allocate resources effectively to maximize overall ROI.

### 6. How does seasonality affect ROMI?

Seasonality has a significant impact on ROMI. Consumer behavior often changes depending on the time of year due to various factors such as holidays, weather, and cultural events.

Companies should consider the following factors:

**1. Consumer demand.** Aligning marketing efforts with [**peak seasons**](https://altcraft.com/blog/seasonal-marketing) can capture increased consumer demand.

**2. Marketing planning.** Marketers plan campaigns and allocate resources effectively by identifying key events that influence customer behavior.

**3. Budget allocation.** Adjusting marketing spend according to peak seasons and aligning budgets accordingly optimizes ROMI during high-demand periods.

**4. Campaign timing.** Considering seasonality, marketers plan and execute campaigns during periods of highest interest and engagement from customers.

**5. Channel selection.** Different seasons may require specific channels. Companies choose the appropriate communication methods for particular seasonal campaigns by analyzing past customer behavior.


Source: [Ignite Visibility](https://ignitevisibility.com/romi-vs-roas-marketing-metric/)

ROMI measures the profitability of marketing investments, guiding strategy optimization, budget allocation, and resource distribution for maximum ROI.

data-analysis-romi.png

About what ROMI means in advertising and how to calculate it correctly.

ROMI, What It Is, Its Impact on Marketing Strategy

Data Analysis: ROMI and Its Impact on Strategy

<Video
url="https://www.youtube.com/embed/o85-BdJ6V9Y?si=ITsycfx7D2wvK22p"
/>

In 2013, Snapchat introduced a new format for publishing content — stories. It was uncertain at the time if this innovation would become popular. However, ten years later, stories remain one of the top marketing tools. Users of Instagram* have appreciated this "quick" content format. Stories were introduced to Instagram* in 2016 and remain relevant to this day.

Users, experts who conduct personal marketing, and brands all share their stories. There are even dedicated people — story makers — responsible for creating stories. According to Instagram* statistics, [**85%**](https://wifitalents.com/statistic/instagram-stories/) of users discover new products and services through stories. Therefore, a company's online marketing strategy must include this direction.

In this article, we will explain what stories are, their types, how they work, and why businesses need them.

## Stories: what they are and why they're needed

**Stories** are short vertical content formats (up to a few seconds) with horizontal scrolling options, published for a limited time (usually 24 hours). Depending on the platform, you can post images, videos, add text, music, links, hashtags, stickers, masks, and even draw. Stories are broadcast only to followers.

There are also dedicated apps for creating stories with extended features, offering a variety of fonts, templates, and other tools. The idea behind stories is to create easy and native content, where perfection isn't mandatory. Aesthetic pictures and videos are more suited for posts that don't disappear from the feed — this is an unspoken rule of social media.

Stories can be found on Instagram*, VK, and other mobile apps, messengers, and even websites. The themes and formats of stories are similar to other publications: from direct advertising, case studies, and tips to polls and reposts of posts and videos.

### Advantages of online stories for business

**Increased engagement.** Stories offer a quick and easy way to consume content, equipped with tools for marketing communication with users. Brands engage their audience through [**storytelling**](https://altcraft.com/blog/let-the-client-feel-like-a-hero-how-storytelling-works) and content that evokes emotions, conduct surveys, collect feedback, and other interactions. Stories on a website also increase the time a user spends on a web page, which positively impacts search engine ranking.

**Conveying information to customers.** Through stories, companies share information about new promotions and products, events, and news. This format does not overwhelm users and, due to the FOMO effect (fear of missing out), encourages them to watch stories repeatedly.

**Brand awareness growth.** Although stories are primarily seen by followers (with no external reach), this type of content also expands the brand's audience. Advertising in stories by bloggers and on other platforms remains a popular promotion tool. Interestingly, the cost of integration into stories is often lower than in posts or video publications.

Social media stories feature tagging tools that users love to use for brands. For instance, when they visit a restaurant and then share about it on their page. Encouraging the audience to create such stories and then reposting their stories increases brand awareness and provides free user-generated content.

**The effect of personalization.** Stories seemingly reduce the distance between the brand and the customer due to their native format. Companies show their internal life and communicate with users in a live format, creating a sense of personal connection. Personalization is a marketing trend that continues to gain momentum.

<Note>
How does personalization work? And why is it needed? Read the article "[**Personalization: What It Is and Why Personalized Marketing Matters**](https://altcraft.com/glossary/personalization-what-it-is-and-why-personalized-marketing-matters)"
</Note>

## Types of stories

Based on goals, there are several types of stories, which align with the types of other social media posts:

- **Informative and educational** — communicate brand news, new products, changes, and product features. 

- **Selling** — lead to conversion: the purchase of a product or service. 

- **Engaging** — motivate the user to interact with the brand's content. 

- **Entertaining** — lift the audience's mood, convey company values through humor, and tell about the product.


Based on formats, the following types of stories are distinguished:

**Images (usually with text).** Several photos can form an entire story or reveal one idea through cards. Sometimes it’s just text on a background without a picture.

**Video stories.** These are short clips (usually 15-30 seconds) that convey an idea on their own (e.g., announce a promotion) or form a sequence of several clips.

**Animated stories.** The functionality of many platforms allows adding moving stickers to images and videos in stories. Animation adds variety to the content.


## Rules for creating effective stories

Stories are more native content compared to other posts, and creating them doesn't take much time. However, to make the format effective, you should follow these rules:

1. **Create a unified style for your stories** that will be associated with your brand: think about colors, fonts, and the style of images. Avoid turning your storytelling into a "mess." 

2. **Keep your stories simple and clear.** Don’t overload them with text and philosophical themes that require thoughtful study of the content. 

3. **Don’t stretch a single thought across too many stories.** Users will get bored and might not finish watching. 

4. **Add variety.** Use different formats, not just one: images, videos, polls, etc. 

5. **Check the story** for spelling errors, design correctness, and afterwards, for the functionality of links and other tools before publishing. 

6. **Motivate users to interact** or take a specific action, rather than waiting for them to take the initiative themselves. 

7. **Create interesting plots** so that the audience watches your stories to the end. Use storytelling tools that engage viewers in the narrative.


## How to promote your products and services through stories

Bloggers particularly excel in selling through stories, using various scenarios for product presentations and calls to action. Brands also adapt their techniques and collaborate with influencers for integrations. There are no strict boundaries here; methods depend on the authors' creativity. However, some popular promotion types exist.

**Advertising.** The most straightforward and direct format where a product or service is sold without any storytelling. These are ad posts adapted for stories, featuring an offer, product benefits, and a CTA. It’s important to approach this creatively to stand out.

**Native advertising.** The product is mentioned in the context of a story where it plays a crucial role (solves a problem) or is casually mentioned. This format is very popular among bloggers for brand promotion. 

**Warm-ups.** A favorite format of bloggers. Unlike native advertising, this strategy is more extended. The product is usually introduced indirectly at first, mentioning it from various angles. For example, the problem is first highlighted. Suppose a blogger wants to lose weight and tries different methods: diet, home workouts, fitness centers, and then finds the right course (or creates their own). Warm-ups can last from several weeks to months, depending on the product.

**Building trust** is not as quick a promotion method as advertising, native integrations, and warm-ups. However, it is the established communication with the audience that turns followers into customers. Broadcasting your values, product advantages, and its worth leads to loyalty and sales.

## Stories on different platforms

### Instagram*

The concept of "stories" became popular thanks to this social network (although it was originally created by Snapchat). Instagram offers a wide range of features in its editor. You can use various fonts, draw, create polls, set timers, ask questions, participate in challenges, add animated stickers, include music, mention other users, use hashtags, and add links to other resources. You can choose to publish your stories for everyone or for a specific list of followers.

<Img
img="/uploads/example_of_instagram_stories_368ce1e533.jpg"
alt="Instagram stories"
src="Example of Instagram stories*"
/>

### VK

VK stories offer background templates, stickers, GIFs, a text editor, drawing tools, and the option to set the availability time for stories: one hour, 12, 24, or 48 hours. Music can be added from the catalog, and there are mentions, polls, and themed hashtags.

### Telegram

Stories on Telegram appeared relatively recently and are available to users and channels (but only if they receive enough boosts) from Telegram Premium subscribers. They can be posted for a duration of six to 48 hours. The built-in editor includes features for adding text, filters, stickers, reactions, drawing, and privacy settings.

 <Img
img="/uploads/example_of_stories_telegram_70a62e42ff.jpg"
alt="Telegram stories"
src="Example of stories in Telegram"
/>

### WhatsApp*

Stories on WhatsApp are called "Status" and disappear after 24 hours. Users can post photos, videos, GIFs, add text, and even voice messages. Reactions to stories are available, as well as the ability to choose the audience who can see them.
 
### Stories on apps and websites

Brands actively use the stories format not only on third-party platforms but also on their own. This way, they announce promotions, talk about products, and deliver useful information to users.

<Img
img="/uploads/news_announcements_via_stories_6324f6a9c3.jpg"
alt="News announcements via stories"
src="The famous news media Der Spiegel gives news announcements via stories"
/>

Also, stories here come personalized. 

<Img
img="/uploads/personalized_stories_79bb14e4fb.jpg"
alt="Example of personalized stories"
src="Personalized stories on apps"
/>

Interactive stories work in the apps. For example, polls are conducted or you are offered to add a product to your cart at once.

<Img
img="/uploads/onboarding_stories_51d8d83b9f.jpg"
alt="Onboarding stories"
/>

In another example, a customer is asked to evaluate his most recent purchase.

<Img
img="/uploads/stories_asking_for_feedback_f7aaedd0e4.jpg"
alt="Stories asking for feedback"
/>

Stories on websites serve the same function as they do on other platforms.

<Img
img="/uploads/stories_in_search_results_4adb2ae707.jpg"
alt="Stories in search results"
/>

## Summary

Stories are a vertical content format that disappears after a few hours or days. Stories in the form of images, videos, and text are supplemented with stickers, animations, links, interactive elements, and other features in platform editors. The functionality across different platforms is similar.

Stories are used in marketing to communicate with customers, increase engagement, enhance brand recognition, and even for personalization. They inform, entertain, sell, and motivate users to interact with the brand. Storytelling, direct and native advertising, and warm-ups work well here.

Today, stories are supported by Instagram* (owned by Meta, banned in Russia), VK, Telegram, and WhatsApp* messengers. Companies also add stories to their websites and apps.

*
*Products of Meta, recognized as an extremist organization in Russia.*

Stories are vital in marketing, boosting engagement, brand awareness & customer interaction. Effective on Instagram, Telegram, and VK with versatile features.

stories-how-to-use-this-tool.png

About what stories are used for in marketing, what types there are and how they are useful for business.

Stories: Advantages, Types & How to Use in Marketing

Stories: How to Use This Tool in Marketing

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