Your Guide to Marketing Effectiveness
We live in a world driven by likes and vanity metrics – with little to no focus on goal driven metrics and improvement. Very often companies spend thousands of pounds on marketing campaigns without being able to report on its successes; only surfacing superficial stats. It becomes difficult for marketing teams to say with any degree of certainty whether or not their activity and campaigns met their desired goals.
Perhaps worse, how their own customers view their brand. Within the current climate, customers expect more personalisation throughout their journey with a brand, which is nigh on impossible to deliver if you have little to no understanding of who is engaging or converting with your products or services.
What is Marketing Effectiveness and why is it important?
Marketing effectiveness is the measure of how successful a go-to market strategy is at meeting its intended goals. You can apply marketing strategies all day, but if they aren’t effective, those efforts don’t matter in the long-term. Measuring marketing effectiveness is crucial to improving your go-to strategies over time and demonstrating the worth of your marketing activity.
It is important to review the impact of your organisation’s marketing effectiveness so that you are able to identify the benefit your marketing team brings to your company. It also ensures that you are able to identify areas that may need improvement to offer your customers the best experience possible.
How can I measure Marketing Effectiveness?
The reason many companies surface vanity metrics is because many people don’t know where to start. Surfacing data and telling the correct story with that data, is often an overwhelming process and without the correct cumulative internal setup, data can be more damaging to the narrative you are trying to tell. When we refer to cumulative internal setup, we look at ensuring there is a process and an understanding of the data requirements that the organisation requires. This is supported by both the correct technology and integrations (allowing you to surface the data) and also the correct internal processes ensuring systems are used in the right way (to pull and monitor the correct data). If none of this exists, starting with small, manageable chunks can make this process less daunting.
When putting your measurement program in place, you should start by deciding on milestone dates for when you’ll collect your data. This informs the frequency and comparative stats you will be able to gather from your marketing. If you are starting from scratch a good frequency is to set up reports on a monthly basis. It is also worth considering what your company wants to understand from the metrics you are going to deliver.
The five metrics of Marketing Effectiveness:
Marketing contribution to revenue
Otherwise known as ROI, return on investment, this is probably the most important metric but often the most difficult to obtain. ROI looks at what percentage of overall company revenue can be traced back to your marketing team’s efforts? It is often the hardest figure to achieve, as some areas of effectiveness, like brand awareness and website activity, may take longer to translate into revenue or may benefit the company in non-monetary ways.
Pipeline growth and acceleration
How do your marketing activities help grow and accelerate the pipeline? How does this growth and acceleration change from one month or quarter to the next?
Pipeline activity is important for marketing and sales teams to be able to predict sales and revenue coming into the organisation in the short and longer term. If your pipeline is quiet, trying different marketing techniques to improve this can help.
Conversion rates can tell a number of different stories depending on where you’re looking. For example, you might measure conversion rates based on the channel to determine the effectiveness of efforts on any one channel or you might measure conversion rates based on the stage in the buyer’s journey to determine the effectiveness of particular campaigns to move leads down the funnel.
Using conversion rate metrics at different points in a customers journey through your marketing and sales funnel is particularly important for understanding areas where there are gaps and areas for improvement to help convert and retain customers.
Cost per lead, cost per opportunity
Your marketing team might surface a lot of quality leads and do a good job of converting those leads, but if the cost of doing so is extremely high, how effective are those efforts really?
This is where cost based KPIs and an understanding of who your customers are helps to improve your marketing effectiveness.
If you have a clear understanding of who engages and converts with your product it makes it much easier for you to find like minded people with your next round of marketing efforts. Ultimately, this is how you can start to optimise your channels to get the most out of your marketing spend.
Understanding brand awareness is especially important in industries with longer sales cycles, as buyers today tend to do far more research on their own before ever reaching out to a company for more information. This is particularly true for high value purchases. It’s important to note that often the results of brand awareness are more long term, so don’t expect an immediate return here.
One way to frame the effectiveness of your brand awareness is to consider it in conjunction with your pipeline. For example, if you find that you have strong brand awareness but your pipeline is lacking, you should ask what else you can do to use that awareness to fuel more conversions.
In general, when it comes to determining marketing effectiveness, your end goal should be to paint a comprehensive picture of how your marketing efforts contribute to the company’s bottom line and ultimately to the experience of the customer.
How can you improve your Marketing Effectiveness?
The Context Marketing Consultancy exists as a product and solutions based consultancy, one of the products we offer is ‘marketing effectiveness’ which looks to review and critically evaluate the use of internal systems, process and data & reporting as well as customer profiling and segmentation.
This product looks to frame the current setup that an organisation has in place and critically review and recommend actions for change to allow scalability and efficiency.
Our marketing effectiveness product is broken down into four main project areas:
- Systems and Platforms – a full review of customer focused systems.
- Data and Reporting – A detailed evaluation of what data is available and what reporting requirements there are for the marketing function and wider business.
- Customer Profiling and Segmentation – A critical review of the type of customers an organisation is converting compared to what they are looking for.
- Process – What is in place in the current team setup in terms of resourcing and internal structure that benefits how customers engage with your company.