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Are you able to measure your Marketing department’s effectiveness?

Marketing Effectiveness - a term that’s conspicuous with its absence in most organizations is gaining importance in today’s recession hit world. Marketing departments, traditionally a cost centre, are being asked to objectively demonstrate the impact of their marketing activities.

Traditionally the measurement of marketing activities’ output has been done through metrics like brand awareness, campaigns and events responses etc. Due to the subjective nature of these measures, the task of evaluating marketing department’s performance becomes difficult and quite often, organizations end up either aligning marketing goals to sales or setting subjective targets for various activities. The problem with both these approaches is that the organizations are never able to ascertain the exact dollar value that various marketing activities contribute towards the top line as well as the bottom line.

Managers across the industries are faced with some fundamental questions:

  • How can a marketing manager know in quantitative terms if it is better to invest cash in a brand-building campaign versus a sales promotion campaign?
  • How can they know which campaign was most successful with which kind of target audience?
  • How else can they segment their audience for a future campaign if not by analyzing the performance of their past ones?
  • How would they derive some learning out of their past marketing activities if they are not tracked by well defined KPI’s?

At broad level, the marketing activities can be divided into 2 categories; one, that have a defined audience and two, which are targeted at mass audience. While it becomes difficult to objectively measure the effectiveness of second category in pure dollar terms, measures like Return on Marketing Investment (RoMI) and Lead conversion can be effectively used to answer some of the above questions for the first category.

Here some would argue that a scenario like this is not ‘walk the talk’ as many campaigns would not show immediate results or are fraught with difficulties like capturing the orders tied to a campaign across different sales channel.

But the fact remains that any initiative that needs to ensure that a robust and objective model for Marketing Effectiveness is implemented has to be backed by clear strategic intent to implement a Closed loop Marketing structure (consolidated Marketing and Sales lifecycle) that ties your campaign to responses, response to leads, leads to opportunities, opportunities to orders and orders to revenue, using clearly defined metrics.

Irrespective of process optimizations and cost prohibiting factors, the truth remains that every organization’s marketing unit has to shed old theories and be innovative to effectively measure their marketing revenue.


I think rather than lead conversion, lead generation related metrics would be a better measure of a campaign's effectiveness. Lead conversion would be a better measure of a sales force's effectiveness.

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