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By Jeff Kear
As a marketer, I can attest that a few years ago we were just like the favorite child in the corporate family.
Companies kept giving marketers more latitude and hiking up our allowance as long as customers kept buying and the revenues kept flowing.
Well, once the recession hit, the revenues slowed to a trickle, and everyone started looking at us as if we just kicked the corporate dog.
This all may be a bit dramatic, but it does pretty accurately trace the storyline of how quickly the discipline of marketing went from a spending mentality to an investing mentality.
Companies know they must spend money to market their goods and services, but now they expect to see a sufficient return on that investment, and rightfully so.
In addition, companies see how easily new technologies like the Internet and e-mail enable measurement and want this level of "trackability" for more traditional mediums like direct mail and advertising. According to a few marketing executives I have spoken to recently, because Internet is so predisposed to metrics analysis and measurement, it is often the major influencer in companies measuring outcomes and ROI.
However, as well-intended as companies are in measuring these things, less than 38% of U.S. executives say their companies are now doing so, according to a 2004 poll conducted by Blackfriar.
So how does a company even begin to quantify something that it has never measured before, something that at times can be extremely difficult to measure?
The first step is to take a long, hard look at your business objectives and define your marketing goals in respect to these objectives. In defining your marketing goals, you are really establishing the criteria against which your marketing campaigns will be measured.
What's important here is to follow the rule of SMART goal-setting - with SMART standing for "specific, measurable, attainable, realistic, tangible." Some goals may be revenue-related; others may speak to awareness levels or market share. But, regardless of the type of goals, you must be able to quantify each of them so you can establish baselines (which we will cover in a minute) and then measure against them.
While you're setting your goals, it's critical to keep "measurement" at the front of your mind before you plot out what marketing tactics to use. By doing this, you will discipline yourself to make measurement a part of every marketing campaign you launch.
However, there is a stumbling block here, as there is rarely that "perfect storm" where all your touchpoints and tactics perfectly match up with easy-to-implement measurement systems. For example, an e-mail campaign might be easier to measure than the print ads you run in a trade journal, but the trade journal may be the best place to reach out to a certain customer at a particular time and juncture.
What's best to take away from this is that, regardless of the tactic required, measurement must always be considered first so as to determine the most feasible way to gauge a campaign's effectiveness.
Before you begin to measure your marketing effectiveness, there are a few key points to keep in mind.
Start Simple
Large companies like Proctor and Gamble routinely measure such complex metrics as brand awareness and consumer mindshare. However, for anyone launching a marketing measurement program, trying to measure these from the outset may cause your head to explode.
I would recommend beginning with more straightforward measurement projects. These can include:
* Adding a reply component (such as phone number or return card) with an offer to your campaigns (especially for direct mail and e-mail).
* Attaching a code number to each piece of marketing and then training your receptionists, salespeople, call center staff, etc. to ask customers for the code.
* Attaching a separate toll-free number to each mailer, print ad, e-mail, etc., so you can measure responses for each.
* Using e-mail services that provide statistics for open and click-through rates as well as the capability of posting variable data to different audiences (enabling you to do more one-to-one marketing and to test your creative content). E-mail services like iPost and Exact Target are such examples.
* Creating a separate landing page on your Web site for each direct marketing campaign and then tracking each visitor through the site from these pages.
Establish Baselines Early On
In order to know where your marketing programs need help, you first need to know how well (or poorly) they are performing. In order to do this, you need to be able to measure them against something (say an internal or industry standard). This is where baselines come in very handy.
Sometimes industry baselines or benchmarks for criteria like response rates are available through professional associations or research firms. However, often you have no idea of the validity of these benchmarks, how they were measured, the variables involved or even if they apply to your product/service or audience. In addition, this information often doesn't come cheap.
Because of this, it's advisable to establish your own baselines by measuring each and every piece of marketing you put out into the world.
Test One Variable at a Time
There are typically four main variables to test for when measuring your marketing: target audience, medium/channel used, the offer and the creative.
Unless you're prepared run a regression analysis to measure the effectiveness of multiple variables at once, you should single out which one of these things you want to test for and measure one variable at a time. This way you can screen out as many outside factors as you can that might interfere with getting clean results.
Finally, collect as much information as you can on your audience and potential tactics before committing big dollars. Test your direct mail by sending to a random sample. Research a trade show and call former exhibitors before buying booth space. Try a few ads out in a trade journal before buying a year of space. (This is an approach I call "purposeful experimentation", as you're taking very educated guesses on which channels and tactics might work and then testing them out before taking the plunge.)
Even if your initial measurement efforts aren't 100 percent accurate, by beginning to collect this data you are taking the right step in making your marketing much more effective.About the Author
Jeff Kear is a principal at Kear|Stevens, an integrated marketing communications firm in Denver, CO. During his career in marketing and advertising, Jeff has created revenue-generating marketing communications for nationally recognized brands such as Budget, MetLife, Moosehead Beer, Qwest and Toyota. Before his work at Kear|Stevens, Jeff served as a senior-level creative at a few well-respected Denver ad agencies as well as a marketing and communications specialist for a Fortune 500 company.
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