April 28, 2010 WeMarketHealthCare

Most Important & Least Followed Rule: Measure Results

One of the most infamous sayings about advertising is, “Half of my marketing money is wasted. The problem is I don’t know which half.” Somebody should have fired the guy who said that.

The truth is, you need to know which half (or quarter or eighth) is working for you. Another truth: there’s really no reason you can’t know. That’s not to say measuring results is easy, but it is a must. Read on, and you’ll forever avoid being one of the non-measuring masses.

STEP ONE:
 Measure The Right Things

As professional marketers, we’re constantly surprised by how few businesses measure their results, despite often spending hundreds of thousands of dollars a year on marketing. First tip: skip the really fancy, really expensive measuring software. A simple Excel spreadsheet and a few formulas (or worse case scenario, a calculator) should do just fine. Let’s take a client whose business is selling vintage movie posters. We suggest they list all their marketing initiatives vertically: Print ad in Entertainment Weekly, web banner ad on imdb.com, booth at the mall, etc. (Anywhere you can potentially gain a customer.) Then, horizontally across, list all the measurables: Cost of each initiative, number of leads generated, number of sales generated, cost per lead (CPL), cost per sale (CPS), gross revenue and net revenue. Those are the most basic metrics. Then, as sales come in, simply fill in the blanks.

Now, you’ll know that imdb.com generated $30,000 in new business with a $5,000 investment. A win. But the mall booth, while generating $1000 on a $500 investment (a nice return) doesn’t match the ROI at imdb.com. Not to mention, it doesn’t take up time you could be doing something else to grow your company. (We measure time expenditure in our own tracking at Spark.) So ditch the mall, put the extra grand into imdb.com and be on the lookout for more online opportunities.

STEP TWO: 
You have to ask, silly.

Keeping your finger on the pulse of your customers is essential. Track where people heard about you and what about your ad prompted them to take action. It’s a no-brainer but few companies do it. E-surveys are a great way to do this. Call Spark if you’d like us to set up an e-survey so you can conduct your own market research.

While anecdotal information isn’t as measurable from a data standpoint, it can be equally important in measuring. Talk to potential customers, clients, patients, etc. and ask what they’re doing, watching, participating in.

STEP THREE:
 Refine and retry.

Once you have your measurements, adjust accordingly. Amplify what’s working and scale back what isn’t. Then measure again. Customers and their tastes are continually changing. TV ratings are rarely consistent and a new opportunity on a social networking site might arise. Everything’s continually influx.

Finally, remember, marketing initiatives can still be successful even if they don’t lead to an immediate increase in sales. Often times, increasing awareness and elevating your brand image leads to sales down the road and long term growth. Conversely, that ad you ran with the big, bold type and a million exclamation marks might have led to short-term interest but damaged your overall image. So ask, ask, ask.

While every ad agency encourages you to advertise, only agencies doing their job encourage you to measure. At Spark, we say measure away.

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