Softlink | Article by Suhasini Kirloskar

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Is Your Marketing Spend Really Working for You? A Common Sense Approach to Measuring Effectiveness Suhasini Kirloskar,COO, Edge Partners

A company’s strategic managers can see the importance of marketing, and will allocate budgets to this function, as it leads to sales and growth. Marketing managers will then utilize the budgets to conduct a number of marketing initiatives, such as advertising, events, inside sales and so on. Marketing managers will also seek new and innovative ways to reach out to potential customers, sometimes embarking on experimental territory in this quest.

Ideally, the marketer should be able to see the results of each of these marketing initiatives, and know the effectiveness of each one, then repeating those that are the highest, and purging those that do not work. Did my old, conventional ad work for me, or the whacky one created by the new agency? Did my investment into my own inside sales team really pay off last quarter? Was the large investment into sponsoring a trade fair justified by the business it generated?

This analysis is not just a matter of performing a post mortem, rather, it provides valuable insights for strategies for the future. The marketing manager is armed with data, and will take far more informed decisions, with a higher chance of succeeding and achieving the goal.

In actual practice, however, I am amazed to see that most organizations are not equipped to take the right marketing decisions, as they simply have no way of tracking and measuring the impact of previous investments. There is no easy way to capture the response to a particular ad, or compare it with that of another. This is one area where the cold science of Information Technology can deliver real value to the creative field of marketing.

Sound information systems are truly needed here. Start with capturing each marketing initiative, and define it’s target. Whether you are seeking leads, or referrals, or building awareness for a new brand, in all cases, you are certainly looking for some kind of response. Possibly you are expecting phone-ins, or enquiries by email, or hits to your website – all these are responses of some type.

So the key is to leverage Information Technology to capture each marketing investment along with its target, and then to capture all the responses that came directly as a result of that investment. If you release an ad each week, and take down the contact details of all the telephonic enquiries that come in, it’s important to link each of those enquiries to a particular ad, rather than putting them all into one bucket.

Soon the trends will start to appear. How do the responses vary as the creative changes? What about the day of the week when the ad releases, or the choice of publication? Armed with these trends, you will be able to craft increasingly effective campaigns over time.

Capturing and measuring responses is usually not as simple as creating lists in a paper register. Information Technology plays a role again. When you capture responses, can the contact details become a part of your overall contacts database? Or are they in danger of being lost somewhere due to a lack of organization?

What about the completion of the sales cycle? As you take the interaction with each contact forward, some of them will result in sales. Do you have a way to track the sales achieved to the ad or activity that started it all?

So the need for an integrated IT system to handle marketing becomes apparent, you simply cannot achieve all this with either a paper based or simple spreadsheet based system. With a system designed especially for marketing, and disciplined data capture, you will be able to see all the trends, and the impact of activities on sales.

Organizations that understand and implement these systems, then leverage them to measure the effectiveness of marketing are successful in taking all the guesswork out of marketing. These organizations know what is most likely to work in marketing, allocate budgets to the right activities, and then follow up diligently until sales are achieved.