How effective is your marketing? Here's how to make sure you're evaluating marketing effectiveness intelligently - Marketing

University Business, Jan, 2004 by Robert Sevier

How do we know it's working?" That's a critically important marketing question that astute marketers know they must eventually answer. Fortunately, evaluating effectiveness is not difficult, especially when measurement is considered as the strategy is developed.

Before we can begin any discussion of evaluating effectiveness, however, we need to quickly review the integrated marketing model we discussed in previous columns. Remember, integrated marketing has three components:

* Brand marketing

* Direct marketing

* Customer relationship management.

For the purposes of evaluation, though, we need to focus on the first two components. Brand marketing has a single goal: to create awareness. Direct marketing also has a single goal: to generate response. Direct marketing means extending an offer: apply, attend, call, visit, or fill out. While evaluating the effectiveness of brand and direct marketing is not difficult, you need to recognize that they are evaluated differently. First, let's take a look at ...

EVALUATING BRAND MARKETING EFFECTIVENESS

Before you can evaluate your brand marketing strategy, you must know in whose mind you are trying to build awareness. In other words, you must have a clear sense of who your target audience is. Every marketing initiative, whether brand-building or response-generating, must be directed at a specific, definable audience.

To evaluate the effectiveness of brand marketing, marketers use a classic pre- and post-strategy. To begin, you conduct an initial study of brand awareness. With these baseline data in hand, you then undertake your image-building strategies (PR, media, special events, direct marketing, advertising, and promotion).

After your initial campaign has run its course, you then repeat the research to determine if your awareness has changed or improved. This is called "post-." If you do not conduct a pre- and a post- in tandem, then you simply cannot evaluate the effectiveness of your brand marketing, your awareness-building strategies.

Let's work through a short example. Suppose you decide that you want to be known for two things: academic quality, and job placement. Of course, you are interested in building this awareness with multiple audiences, but for this illustration, let's focus on adults. As part of your pre- research, you discover that adults identify the words "academic quality" and "job placement" with you 9 percent and 16 percent, respectively.

You then undertake a brand-building strategy that keys in on those two qualities. You stress them in ads, publications, speeches, hometown news releases, and special events. Twelve months later, you repeat the research (the post-) with the same instrument, and a sample from the same population. Looking at the adult data, you discover that this population now uses these two qualities to describe you 17 and 23 percent of the time. Based on this data, you can begin to say that your brand marketing campaign has been effective.

Yet, there's a twist. When parsing the data, you discover that while aggregate top-of-mind awareness has increased to 17 and 23 percent respectively, men account for most of this growth, and that your awareness along these two dimensions has actually declined among women. This finding indicates that while your campaign is generally successful, it is not specifically successful because women account for 62 percent of your enrollment. As a result of this insight, you conduct a series of focus groups with women, and make some changes to your campaign. This data becomes the new pre- research. You must then plan to repeat the study in the near term to see if you have gained traction with women.

EVALUATING DIRECT MARKETING EFFECTIVENESS

To measure the effectiveness of your direct marketing strategies, you must be able to tabulate responses to your different offers (how many called, how many sent in business reply cards, how many attended, etc.) To assist in this tabulation, marketers often include unique contact information (special phone numbers, mailing codes, URLs, P.O. box numbers, etc). This allows them to track the effectiveness of different media and offers to different populations.

Let's say you decide to run some radio spots announcing an open house for your adult ed program. Each ad (and even each ad running on different stations) might include a unique telephone number so you can determine how effective that ad was, based on how many adults called that unique number. An ad that ran in the mornings on the country station might have a telephone number that ends with 4321. The same ad in afternoon drive time on the easy listening station might have a telephone number that ends 5321. By keeping track of the numbers that were called, you are measuring particular response rates.

Still, just as there were a few twists with measuring brand marketing, there are a few twists with measuring direct marketing. For example, suppose you send an annual fund piece to 14,037 alumni. You receive responses from 1,720 alumni who contribute a total of $103,975. This indicates a 12.25 percent response rate with an average donation of $60.45.