Today, businesses are aware that they need to evolve how they conduct and measure the success of their marketing strategy. However, the ground reality of making that happen is a bit different. Forrester outlined that less than one-third of marketers meet the marketing measurement practice standards.
Enterprises are drowning in enormous amounts of data. Businesses need to track so many metrics that all seem relevant – social media engagement, search engine traffic, consumer actions, buying habits, and much more. Every data segment has the potential to provide critical information that can help in formulating a marketing strategy. But how to decide which key performance indicators are relevant for your business? How to nail down which show the real effectiveness of marketing?
Well, in concrete terms, marketing effectiveness could be measured to meet short-term or long-term business goals. This guide outlines the difference between measuring marketing effectiveness for short-term and long-term goals and suggests when to look at which.
But before we dig into the impactful metrics, it is essential to understand what marketing success looks like.
What Does Marketing Success Look Like?
Marketing success is directly linked to achieving the business goals one sets. Its definition, therefore, must be specific and clear with respect to the set goals and their timeframe. For example, something vague like “improve the bottom line of business” would not be effectual enough to measure the true marketing effectiveness of a business. Instead, gauging the sales success against the increase in qualified leads or the number of additional sales by the end of the month (for example) will more likely help in conceptualising what marketing success looks like for the business.
So, it’s essential to get a unique idea of success, coordinate with the leadership team, and ensure that the marketing priorities are aligned to maximise marketing effectiveness. And this is where the question of what metrics to track comes into play. It leads to a more general argument – Is it more important for you to build long-term brand value or generate sales in the short term? Are there set revenue targets that should be achieved in that regard?
Let’s answer these in the following sections.
What Is Short-term Sales Success?
Short-term success leads to immediate gratification in terms of ROI. It comprises a range of purposes that need to be completed in a specific time. Most short-term marketing and sales goals start with increasing investment in a brand, product, or service to improve market awareness. Even in today’s digitised world, it takes a lot of time to get people talking. Short-term success requires a well-thought-out marketing strategy and well-put preliminary campaigns before releasing the product in the market.
What Is Long-term Brand Value?
The long-term brand value represents the connection of consumers with the product or service offerings. Of course, when looking at it from a long-term perspective, it is more favourable as compared to short-term sales success, but there are often other factors to consider before weighing them against each other.
In essence, the long-term connection can be created through various marketing efforts, such as developing strong relationships, creating a unique identity, and adhering to company values. When this is done correctly, it can result in increased business profits and a competitive edge in the future. Here, the measurement of marketing success is exceptionally significant as it works to hook the customers for a lifetime and build a loyal customer base. Ultimately, lifelong customers can become brand ambassadors, bring in more customers, and enhance the bottom line of business.
What Are the Methods of Measuring Marketing Effectiveness?
Marketing effectiveness can be measured by calculating the costs used to build the brand. It typically includes trademark costs, marketing activity costs, employee salaries, third-party agency payments, and other related costs.
The other brands can also be assessed for discerning their market value and comparing it with the worth of your brand. The best way to measure the market value is to calculate the stock performance of competitors.
Keeping tabs on qualitative and quantitative data pertaining to customer experience helps you understand the brand value of the company. This can be done by calculating the cost of current customers – also known as customer lifetime value.
It is one of the best ways to evaluate the marketing effectiveness of your brand. It directly evaluates the income generated through various marketing channels. In the context of this guide, the business income can be measured to analyse the income generated from short-term sales goals and long-term value creation goals.
Finding the Right Mix of Short-Term & Long-Term Marketing Measurement Metrics
Looking at the bigger picture, finding the right balance between short-term and long-term goals is important. While short-term goals focus on aggressive advertising and marketing, long-term goals focus on creating value for consumers to sustain their interests. For both, it is essential to have the right direction and tactics in place. As it stands, the integrated sales channel solution can help you get the best of both marketing worlds by striking the right balance between your short-term and long-term goals.
Knowing your marketing goals allows you to measure marketing effectiveness against the right key performance indicators. When attention is paid to the right metrics, it can help you understand how your marketing efforts translate to business success.
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