For the last couple of years, creative brands have tried to incorporate effectiveness into their marketing plan. That is, using marketing tools that help reduce time in the processes needed to achieve marketing goals. Some of the favorite tools have been insight and analytics softwares.
Brands like Samsung and L’Oreal are good at being effective in their marketing strategies. And since these brands are considered top in the craft of achieving marketing effectiveness, they make great guest speakers at marketing conferences.
The odd thing is that even when marketers are presented reasons to be effective at marketing, some still choose to be efficient. Some marketers track ROI (return on investment) to see how well their marketing efforts are doing, when they could be tracking more comprehensive metrics, like econometrics.
By solely tracking ROI, you are doing your brand a disservice, as you would be achieving efficiency and not effectiveness. Focusing in this metric alone is not a good idea for your brand in the long run. Now, let’s see why this is:
Efficiency metrics include: Cost of acquisition, click-through rates on Ads, bounce rate, pages per visit, conversion rate, checkout conversion rate, repeat conversion rate, activity of customers on email lists.
Effectiveness metrics include: Revenue per visit, gap analysis of total search demand, average order value, number of items per order, customer satisfaction with site experience, minimum rate of return of percentage active online customers, customer lifetime value, customer satisfaction experience.
Effectiveness is defined as “doing the right things” and efficiency is defined as “doing things right”. While effectiveness is about fuelling bigger marketing objectives and most often than not shows how an online channel helps, efficiency is about upping conversion rates and bringing down the costs of acquisition. So far, from a marketing perspective, focusing on effectiveness has proven the right thing to do.
When you don’t measure what matters, you are wasting your time. And nobody likes to have their time wasted, am I right? In order to maximize your time and effort, try both: long-term and short-term metrics that will help you identify what is working and what is not. This will involve working with different metrics and building teams that specialize in measuring different metrics.
Switching your focus to effectiveness will bring great results. If companies set their marketing budget after they have come up with a solid plan to track their efforts, chances of increasing profit would be higher, that’s for sure!