How to Correctly Measure Marketing Effectiveness


To measure marketing effectiveness, you might track response rates such as click-throughs, requests for more information, or something else that tells you someone has seen your information and wants to know more.

However, tracking initial response rates is only the first step. If responses aren’t translating to the overall bottom line, your marketing dollars may be spent in vain.

Below you will find some insight on how to get the biggest bang for your marketing buck.

Practice closed-loop marketing.

Response rates to marketing campaigns are measured by several variables. Recognizable measurements include click-through rates, email opens, and form conversion rates, in which a form is completed by your online invitation. However, these marketing measures do not measure how profitability is affected by these responses.

Closed-loop marketing analyzes a marketing campaign from first contact to final sale. That way, you will understand who responded just for the “free t-shirt” (or online counterpart) or which responders you would rather have stayed away. Closed-loop marketing can help you to touch the customers most likely to use your product profitably and enhance your bottom line. An Introduction to Closed-Loop Marketing is a great resource for learning more about how to find those customers.

Avoid common measurement errors.

For companies with multiple products that serve a similar target audience, a common mistake is to double-count one response for two different marketing promotions. A customer who purchases your product may not be responding to the Holiday Promotion, but instead to last month’s coupon promotion. In order to avoid double counting this sale, savvy data analysts remember to “de-dupe” responses from the Holiday Promotion campaign by eliminating all those who used last month’s coupon during this month’s promotion.

Tailor measurements to your business.

Companies that sell multiple products, brands, and services can learn about their customers by asking lots of questions of their data warehouse. A data analyst can drill down to the age group most likely to respond to social media, which brands are most preferred by men 45–60, and who your most (and least) loyal customers are. This way, business owners are not surprised when certain business conditions lead to decreased sales.

Measure your business objectives.

Many marketers measure ROI. Not all ROI measurements are created equal. Some might define their return (R) as the resulting sales from a marketing campaign, and others may define it as gross profit. To best use ROI, it might help to take a look at the customers you’ve attracted.

A customer who buys your product and then returns it or defaults on their credit line might show a positive ROI if tracking revenue but eventually hinders the bottom line. Or, a new customer may start out slow, barely affecting sales and profit, but become a loyal customer who buys several of your products after trying out the one he responded to via your marketing campaign. To best define your ROI, first define your ideal customer and the measurements he affects.

To measure marketing effectiveness, business owners ask many questions about their customers, their profitability profile, and their potential customers. Once business owners know the questions they want to ask, a data analyst can help to track, measure, and analyze the information from each marketing effort.