Many companies have not even bothered to see what results their individual marketing efforts have brought to them. They simply set aside budgets for marketing programs and activities, conduct and implement these programs without finding out which specific campaigns have brought them the best returns.
For each marketing activity or campaign, it would be worthwhile to include in the marketing plan the goals, the budget, the implementation strategies, follow-up strategies and tracking the results of the campaign. The most basic quantities to measure returns are to obtain the cost per sale, cost per lead, and the cost per visitor.
With the recession all around us, many companies are cutting down on marketing activities. What is important at this point in time is not to slow down on marketing, but rather, to create more vigorous marketing activities. Also, more vigorous does not necessarily mean more expensive. This is why it will be very important to track the marketing dollars that go into the marketing efforts of any firm.
The advertising firms that use a multitude of marketing techniques, or that apply several marketing techniques during a certain campaign may also use what are called econometric methods. These involve using time series regression models in order to evaluate the impact of a technique, say advertising, on sales by isolating the key or influential variables on sales while holding the other non-important variables constant.
There are others also that measure the ‘lingering effects’ of a campaign. They use tracking surveys, do interviews to find out how long the recall of a campaign or of a product lasts in the eyes of a consumer. They can also do this ‘lingering’ analysis on a per campaign basis, to determine how long the effects of a specific campaign are in order to determine what campaign is best utilized in a given instance.
Other more sophisticated mathematical models try to predict the expected monetary returns of a certain campaign, given the past history of previous campaigns. This may not be as reliable as other current mathematical models, but at least, past history may be used as a good predictor of future actions.
Thus actually quantifying marketing efforts involves a combination of good sense and the right numerical or statistical tools. Knowing the returns of a particular marketing strategy is very important as this knowledge will guide the marketing strategists in coming up with more effective techniques and strategies to help bring in more sales even in this very slow era of recession.