Do your marketing efforts actually bring you any returns?
Marketing effectiveness is the quality of your marketing strategy, and can be optimised to obtain better returns on marketing investment (ROMI).
Measuring marketing effectiveness involves:
- Reviewing your marketing strategy
- Identifying your objectives and goals
- Identifying conversion points
- Measuring tactics
- Evaluating your measurements
Traditionally, measuring marketing effectiveness was limited to conducting surveys or tallying sales results only after marketing efforts were completed. It was time consuming and would require a lot of effort to capture and consolidate data.
With the evolution of digital technology, measuring marketing effectiveness has become easier and data can be captured and consolidated at almost real time. Today, you can measure almost all online marketing platforms with an analytics tool. As with online and offline marketing becoming more intertwined, technologies such as QR codes or Vanity URLs have also been introduced to measure the influence of offline marketing efforts.
The objective of this toolkit is to help you understand how you can plan, measure and evaluate the performance of your marketing efforts with the goal of improving your ROMI. We will introduce you to some digital technologies which are commonly used to measure the impact of online and offline marketing efforts.
Regardless of whether your marketing activities involve offline, online or both, you should be able to find relevant insights on how you can start your journey towards measuring marketing effectiveness
Why Measuring Marketing Effectiveness is Important to Your Business?
Get more Sales! Reduce Costs! Better ROMI! Sounds Familiar?
Essentially, measuring marketing effectiveness empowers you with an understanding of your marketing performance. Understanding your performance will enable you to evaluate, learn and identify opportunities to improve your ROMI.
For example, here’s a simple illustration of marketing to sales conversion – Finding X, Y & Z.
In the above illustration, marketing budgets are invested in print ads, social media and web banners to reach the target market. These investments are expected to bring prospects to the website / retail shop and eventually, some of these prospects will convert to customers.
Measuring these X, Y and Z values allows you to review the exact numbers in return (i.e. reach, prospects & sales) to better understand your marketing to sales performance.
Web Banners (1000 reach) -> Website (100 prospects) -> Purchased (10 Sales)
Social Media (2000 reach) -> Website (120 prospects) -> Purchased (5 Sales)
Print Ads (5000 reach) -> Website (250 prospects) -> Purchased (12 Sales)
You can identify which marketing to sales journey (coloured lines) was most effective and understand its efficiency by reviewing the conversion rates at each stage.
“Which worked better?” , “Why it worked better?” , “How it can be better?”
All of these questions can be answered by these values. Consider these values as a ‘reality check’ of your marketing strategy and how your target audience perceives your brand. These answers are insights to your business which will lead you to better conversions rates and with better conversion rates, you can obtain better ROMI.
Do you currently know all the X, Y & Z values for your business?
How to Measure Marketing Effectiveness
There are four key stages to measuring marketing effectiveness – Plan, Measure, Analyse & Optimise. You can apply this framework to your marketing efforts / platforms regardless of whether you are in a Business to Consumer or Business to Business environment.
Plan – Planning is the most important stage when it comes to measurement, because it keeps you focused and provides you a roadmap to measuring marketing effectiveness. We will cover two areas in this Planning stage:
- Understanding & identifying your customer journey towards your goal.
In this section, we will help you identify and understand the journey that your prospect will take before becoming your customer.
- Creating a measurement plan with key performance indicators (KPI).
This is where we will introduce you to different measurement metrics (aka measurement units) and help you develop your measurement plan that will serve as a guide on what to measure and evaluate your performance on.
Measure – In this stage, there will be two areas which will provide you with technical understanding on how measurement takes place.
- Tracking Tools
Discover the different measuring tools that are available to you depending on the digital platforms you use.
- Tracking Techniques
Learn some common marketing measuring techniques such as measuring your offline/online traffic sources.
Analyse - Once you have enough data to analyse, you can understand your marketing performance in relation to your own historical or industry benchmarks.
Optimise – You may have discovered some insights based on your analyses during the previous stage, and the next step is to optimise your marketing spend.
In the next few sections, we will help Jane and her e-commerce business “Jane’s Shoes” (fictional example) in her quest to measure marketing effectiveness.