Measuring Marketing Effectiveness: Getting Started (part 2 of 2)

The article I wrote about a few years ago, 3 Key Marketing Performance Indicators, is still hitting home with a number of you entrepreneurs out there. Many of you responded by saying that it was an “eye-opener” that you hadn’t considered. Then, you followed up with two main questions: 

1. “I launched my marketing campaign months ago/ am involved in various marketing activities but did not set up a system for tracking tangible data prior to starting. What do I do to measure their performance now rather than waiting another three months to collect data?”
   
   
2. “What types of things do I need to do to be able to collect data that I can review for marketing effectiveness?”

I answered the first question in depth my previous article, Measuring Marketing Effectiveness: Getting Started (part 1 of 2). (If you missed it, be sure to read it!) Therefore, we’re going to tackle the second question above this week and I can sum up the answer in one word: Organization. That’s you need. But, I suppose I cannot leave the response at that because then you’ll be asking: “What do I need to organize!” So, I’ll answer before you ask. The following are the four main areas in which you need to be organized to be able to successfully monitor and assess your marketing activities’ performance.

Strategies: Chart Them Out!

In a perfect world, you already have a marketing activities chart and implementation schedule as part of your marketing plan. If you do, I suggest that you use that chart to help you to track marketing activities. If you do not have a marketing activities chart and implementation schedule (Tsk! Tsk!), create one now. List your marketing activities down the left column; you can set up the timeframe of your marketing calendar by month or quarter, whichever is most feasible for your current marketing activities, across the top of the chart. (See the example below.)

Marketing Activities: Create Codes

Manufacturers use barcodes to track their products. That’s how they determine which stores are selling which products the most, when they need to restock products and more. You can apply the same concept to your business by creating your own unique tracking code for each activity for each time you plan to do the activity. To do that, create a “base” code for each type of activity. For example, in my chart below, I used the base code “NWS” for all of the e-newsletters, DM for all direct mail pieces and NR for all news releases. Next, add a unique suffix code to that for each piece / activity you plan to create / do in that type of marketing. This allows you to create a unique identifier for each activity for each type of marketing. There is no set pattern or wording that needs to be used when creating codes to help with tracking. The important thing to remember is to create unique codes for each type of marketing you do as well as each activity within that marketing category.

Bonus Tip: Remember that chart I mentioned earlier? Well, to stay organized, I recommend that you write (or type) the code on your chart so you can cross reference the activity with responses to the activity in the future.

Customers: Get While You’re Giving

Each time you interact with a client, ask them how they learned about your business and / or a particular product / service. This will help you to determine which advertising mediums are working well for you. If you maintain a database of your customers, include this information in along with their other information. If you don’t, set up your point of sale or incoming leads system so that it captures that information. For example, if you’re using marketing to generate leads and you have potential customers to call a specific phone number, one of the prompts prior to reaching a salesperson may sound something like this:” How did you hear about us? Press 1 for TV ad, press 2 for radio ad, press 3 for Google search…” You can use this same concept when selling products or services in-person or online.

Financials: Capture, Categorize & Record

You should capture all sales (types and amounts of products / services sold), revenue and expense data. Your point-of-sales system, business financial software (Quicken, Quickbooks, etc.) or online income / expenses services (Ex.: Outright.com) can be useful in completing this task. If none of those options are feasible, there’s always a good old-fashioned excel file! Once you have that compiled, you can begin delving into your analyses. First, cross-reference your sales with the information obtained from your customers on how they discovered your business / products / services. Next, review your expenses. Categorize and denote which are direct costs of producing, implementing and maintaining each marketing activity. To determine how to use that information, refer back to the 3 Key Marketing Performance Indicators article.

Conclusion

How each of these tactics will be implemented will differ for every business. There are no “hard and fast” rules that must be followed. However, the above suggestions will work if you are conscientious with your planning and collection every step of the way. With that said, I will offer this final suggestion to help you succeed: Take stock of your resources—human, time and monetary—before you begin this process. Doing so will insure that the marketing performance data collection and evaluation processes you have in mind are feasible for your business on an ongoing basis and pinpoint who is responsible for maintaining them.

As always, if you have a marketing question that you would like me to answer, send me an email.