Measuring Marketing Effectiveness in Comparison with Sales

Measuring Marketing Effectiveness in Comparison with Sales

Marketing effectiveness is the quality of marketers to optimize their efforts and achieve the best short-term and long-term results. Marketing Effectiveness is related to Return on Marketing Investment (ROMI) and Marketing ROI which helps to describe the relationship between costs and the returns achieved either in form of profits or leads.

It can be very difficult to measure marketing effectiveness in advance; even afterwards it is quite difficult to measure performance accurately and to find out the most effective marketing activity. A heavily invested campaign can disappoint you badly but a successful campaign can also not generate numerical results to tell you the exact contribution of marketing activities to increase sales. The concept of marketing effectiveness is largely related to the marketing activities adopted by the companies as they plan and execute the strategies to sell their services and goods.

When we want to measure the effectiveness of marketing campaign, there are three things that are essential to know. One is cost of marketing, second is revenue or leads generated from this campaign and lifetime value of a customer. Marketing is a process by which organizations create and distribute products that are not only desired by customers but they are willing to purchase those on given price.

Cost of Marketing means comparing different sources of marketing and to decide which one will work better for your business campaign, like sometimes generating a brochure can cost you more as compared to make an ad in newspaper. It must be you to decide your marketing strategy on cost or its effectiveness. Next thing comes is revenue generated from specific sales after its marketing campaign and how much sales is increased after adopting a specific technique. Final thing to measure the marketing effectiveness is Customer Lifetime Value; it is the amount of gross profit generated per year by a customer multiplied by number of years they continue to purchase the same product.

If a company creates a good understanding of how their consumers make a purchasing decision, this understanding can help in making a good marketing campaign and they will be able to enhance their marketing effectiveness. Lastly, there is small percentage of some factors that are out of control of marketers that can potentially impacts the effectiveness of marketing activities.

Marketing Effectiveness can also be enhanced by changing the current marketing strategy of company to be more successful like changing the marketing infrastructure, or taking another advertisement agency into consideration. Measuring marketing effectiveness is not an easy thing but it can be made easy by hit and trial method and learning from past experience.

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