In an era where data reigns supreme, businesses can access abundant information about their customers, campaigns, and advertising efforts. This can be seen as beneficial, offering precise measurements to enhance marketing efficiency. However, the reality is far more complex.
How do you measure the effectiveness of your marketing efforts? Are you lost in the myriad of engagement metrics? Or waiting months for results, still leaving you briefing the next campaign with guesswork?
Brittany Pinney, CRO, ProQuo AI
In a nutshell, marketing effectiveness measures how well a company's marketing efforts translate into tangible results and contribute to the organization's overall success. We’ll be looking at this from a business objectives perspective, and customer feedback-oriented approaches.
Why is it difficult to track marketing effectiveness?
Tracking marketing effectiveness is no walk in the park, primarily due to three significant challenges:
The multi-touchpoint, non-linear customer journey
The inherent subjectivity of marketing metrics
Multi-Touchpoint, Non-Linear Customer Journey
In our current digital era, the path customers take to purchase is more complex and unpredictable than ever before. Consumers engage with brands through various touchpoints, both online and offline, often in a non-linear way. They might come across a product on social media, do research on a website, see an advertisement on TV, and eventually buy it in a physical store.
As a marketer, it can be challenging to determine which touchpoint had the most impact on a customer's decision. Was the initial social media exposure as influential as the final in-store experience?
Nowadays, businesses are bombarded with excessive information, which can lead to data fatigue. Though having access to extensive data sets can be beneficial, it can also be overwhelming. It is difficult for marketers to determine which metrics, KPIs, and analytics tools are crucial for assessing marketing effectiveness.
Excessive data collection can result in "analysis paralysis," in which marketing teams get too caught up in gathering and analyzing data, losing sight of their primary goals. Sifting through extensive datasets to extract valuable insights requires advanced tools and data science proficiency. As a result, numerous businesses find it challenging to derive actionable insights from their data, impeding their ability to make well-informed marketing decisions.
At its essence, marketing aims to affect how people behave. It involves forging emotional bonds, molding opinions, and cultivating customer allegiance. Nevertheless, these components of marketing are naturally subjective. Unlike concrete statistics like website traffic or business data, evaluating brand sentiment or the impact of a creative campaign frequently requires subjective analysis.
Moreover, factors beyond marketing efforts can affect metrics like brand awareness and customer satisfaction, making it difficult to attribute success solely to marketing.
How to Measure Marketing Effectiveness
Clearly, the influx of information can be overwhelming, but it's also a treasure trove of insights waiting to be harnessed. Brands must learn how to interact with data and extract meaningful metrics to effectively measure marketing effectiveness.
This can be approached in two ways. First, you can analyze data points, charts, percentages, etc. And second, you can explore what people are saying about your brand (that too can be translated into data points).
Measuring marketing effectiveness with business metrics
The sales-oriented marketing effectiveness measuring can be achieved by following a couple of metrics. These are:
Return on Investment (ROI) is calculated by comparing the gain from your marketing efforts to the cost of those efforts.
Customer Acquisition Cost (CAC) is calculated by dividing your total marketing expenses by the number of new customers gained within a specific time frame.
Market Share is the share of sales or revenue of your brand within a specific industry or market segment.
Sales Volume can be measured in various ways, including point-of-sale data, online sales records, or other relevant sales tracking systems.
You've met with some, if not all, of these metrics. But how can brand managers benefit from truly understanding their purpose?
Tracking these metrics over time allows you to observe trends and identify patterns. For instance, if you notice a rise in CAC, a decline in sale volume may signify a need to reassess your customer acquisition and retention strategies.
Moreover, using these metrics to evaluate performance promotes accountability, fostering a culture of responsibility within marketing teams. You can measure marketing efficiency by establishing clear goals before a campaign, which should include the metric listed above.
Ultimately, the objective of any business is to maximize profitability. Measuring these metrics allows you to identify opportunities to increase revenue, reduce costs, and enhance the overall efficiency of your marketing efforts, all of which contribute directly to your brand's bottom line.
Measuring marketing effectiveness with customer feedback
But there is a lot that raw, sales, or marketing-oriented numbers can't tell you about your brand. To be successful in your category, equations cannot be your single source of truth. Why? Because these are missing the most crucial element — humans. Numbers can tell you how people interact with your brand, but not why.
Understanding what your current and potential customers think and feel about your brand is equally important as ROI and Customer Acquisition Costs. For example, you can notice that the ROI from the latest campaign increased. That's great. But why, exactly? The primary purpose of consumer intelligence is to understand that why.
However, any Brand or Marketing Manager reading this knows how much effort goes into data analysis, scouring the Internet for comments about your brand, and reading through reviews, survey answers, and much more.
Using the framework, you can quickly identify your brand's strengths and weaknesses, uncover hidden opportunities within your industry and against your competitors, and create actionable strategies to optimize brand performance. Of course, at any point in time, you can dive deep into all the responses, ask custom questions, and even analyze your assets with Creative Testing.
That's the most comprehensive and intuitive way of measuring your marketing effectiveness.
No matter how complicated your customers' journey to your brand is, you can always ask them which point of contact was crucial, what made them purchase your products, or why they would choose your competition instead.
With a clean and simple UI, there's no risk of data fatigue. Data science teams can access the platform to tailor it to your needs while you can easily access insights in real-time.
While all customer surveys are subjective, thanks to our framework, they are put on a single scale, giving you a universal point of view.
Start measuring your marketing effectiveness based on genuine insights ready to be actioned today!