Basic Business Cents: Measuring marketing effectiveness for business
At a recent meeting of business leaders, the question was raised on how to measure the effectiveness of marketing efforts. That is a question that is near and dear to most businesses as the opportunities to promote one’s business seems endless today.
First, determine that the right products/services are being marketed. One of the best resources to study is the book, “Competing for the Future, subtitled Breakthrough Strategies for Seizing Control of your Industry and Creating the Markets of Tomorrow,” by Hamel and Prahalad.
The authors make a good point to study the right groups of customers and prospects. They break these groups down into those who are customers today and those who are desired to be new customers. Both groups are then divided into those who express their needs and wants and those who don’t reveal their wants and needs (maybe they don’t even know themselves). So customers can be surveyed, and that is good, but what about those who would be desirable customers and those who don’t express what they want. Somehow a process is needed to extract those real needs and wants from all groups.
A simple survey of key people in all those groups is one way to get effective feedback on supplying products/services that satisfy the needs of the marketplace. The survey needs to be simple; if it takes too long or too much work, people will not respond. If mailed or emailed, it should be no longer than one page, including space for answers. Open-ended, probing questions are most useful because they can reveal information beyond which is anticipated.
One also needs to understand the market for the product/service. “Shotgun marketing” is employed when reaching out to the general public is needed. An example would be for a general merchandise store. “Rifle-shot marketing” is used when the target market is a narrow segment of the public. An example would be for a septic service business that only needs to market to owners of septic tanks. It might be possible to obtain a list of residences that have a permit for a septic system and direct marketing can be employed to focus only on those who might have needs for the service.
Secondly, a follow-up survey can be made to determine if the best approach to reaching customers/ prospects is being used. This is also a simple survey to determine what attracted customers to buy and what would attract new prospects to buy. It can be broken into two parts:
n Traditional marketing
n Sales force
n Image-storefront, location, packaging
n Word of mouth
n Advertising – newspaper, radio, television, billboards, other
n Press releases
n Direct mail
n Electronic marketing
n Email “blasts”
n Targeted email
The cost in terms of time and money obviously varies greatly with the different approaches, as well as effectiveness. Armed with the responses to the above survey, a simple return on investment can be made on each approach tried. It is wise to try different methods and monitor results. Be sure to consider the cost of time involved in the computations.
There is satisfaction in having data upon which to base decisions. Knowledge of which products/services of the business satisfy the real needs and wants of customers/prospects and knowledge of where to focus marketing efforts will provide guidance to maximize return on marketing efforts.