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In order to ensure the effectiveness of your marketing in getting you to meet or exceed your business goals, you need to measure your results and adjust your plan accordingly. You need to choose a set of measurements or metrics to track, and then you need to analyze them and compare them against your goals so that you can do more of what works and less of what does not.
For marketing methods such as television or print advertising, there exists well established measurements. You know that spending $X advertising on certain television shows (with particular networks, during specific hours of the day or times of year) or in magazines (based on their readership) that Y number of people will see your advertisement. By tracking how much you sell before, during and after the advertising runs, you can develop a recipe for hitting your targets.
For instance, if you know that spending $1 million on television advertising during the two weeks prior to Easter leads to sales of 1,000 of your custom egg baskets, you can include that in your plan. Perhaps you would choose to do that every year. Possibly you might find less expensive ways to drive those 1,000 sales. Or maybe after those 1,000 customers find you, they are loyal year after year, and you can re-deploy your $1 million to other areas of your marketing or business plan.
Another way to think about measurement is to look at how much extra you get with your marketing efforts. For example, say you sell aprons on Etsy, and -- without doing anything beyond listing the aprons for sale -- you sell 20 aprons a month. Those 20 sales would be your baseline. Let's say for marketing purposes you offered a discount code on Twitter and that brought in five additional sales. Those five sales would be incremental sales. Comparing differences in base versus incremental sales volume can give you rich insights into how to adjust your marketing and branding efforts.
Even if you are not marketing a product or service, tracking key metrics can still be a useful exercise. Perhaps you want to increase your blog readership. You might want to track page views by subject, which topics people add to social bookmark sites or on their Facebook page, or posts that readers have moved to Stumble or Kirtsy. Looking at those numbers can lead you to fine-tune your writing and topic selection in ways that increase readership and engagement.
Regardless of your goals, establishing key metrics related to your goals and then tracking and measuring them will help you both better understand the effectiveness of your efforts and reach those goals.
Previous Chapters
Chapter 1: Introduction
Chapter 2: Setting Goals and Creating a P&L Statement
Chapter 3: The Marketing Mix and the Four Ps
Chapter 4: Marketing Research
Chapter 5: Understanding The Consumer
Chapter 6: Branding
Additional Resources:
Investopedia: Return On Investment (ROI)
For example, a marketer may compare two different products by dividing the revenue that each product has generated by its respective marketing expenses.
Andrew Adam Newman at The New York Times: Dr. Scholl's Widens Its Insole Campaign
The company tested the promotion on a smaller scale a year ago, inserting the insoles in the June issue of Glamour for a specific subscriber list of about one million in all. Mr. Higgins compared the free sample to the enticement of a coupon, where a redemption rate even in the “low single digits” of subscribers was considered successful.
Research by Glamour one month after the ad first appeared showed that 11 percent of the subscribers had actually bought the insoles and 58 percent said they planned to buy a pair. In all, 57 percent reported peeling the insole off the page, with 37 percent actually testing it in a shoe.
“For us that response rate was outstanding,” Mr. Higgins said. “One of our goals is to build awareness of this brand and this segment and to get women to think about Dr. Scholl’s and feel the fit, comfort and shock attenuation.”
Amber Naslund at Radian6: 10 Key Sales Metrics to Track and 10 Key Engagement Metrics to Track
Jay Lipe of Emerge Marketing: 3 Must-Have Metrics For Your Marketing Staff
Dan Briody at Entrepreneur: What's Your Business Telling You?
Data can tell you whether your store hours are ideal. It can tell you if you're charging too much for some products and undercharging for others. And it can tell you who your best customers are and why.
