As a manager, you only develop new products once you know what return on investment you can expect. You should measure the effectiveness of your marketing spending just as carefully.
Managers often hire marketers or agencies who tell them they must conduct branding campaigns that cannot be effectively measured.
Divide the campaign cost by the number of new customers to get the cost per acquisition (CPA). Then compare the CPA to your marketing allowable to see if the campaign is working.
The marketing allowable is the lifetime spending per customer minus the cost of producing and delivering the product, including required margins. If your CPA exceeds your marketing allowable, your campaign isn’t working.
If you are not a direct response marketer, measure increases in new customers via your sales channels during and immediately following the campaign. The customer count increases should justify the cost of the campaign.
Determine the appropriate time frame to measure. For example, a campaign introducing a new product will take longer to work than a campaign introducing a 1-day sale at a store.
If your marketers say the campaign is about driving traffic to your website, find out the linkage between traffic and orders. Traffic alone doesn’t build a business.
Digital campaigns, including digital branding campaigns such as online display, are often less expensive than offline campaigns, and they are eminently trackable.
With digital marketing, you can often generate a tremendous response at a low cost. Digital news releases, blogs, tweets, and Facebook and LinkedIn pages can be produced for very little since your media costs are low.
Even videos can be shot and uploaded to video sharing sites like Youtube and Vimeo for less than a typical paid media campaign. Blendtec created funny videos of its blenders crushing familiar products like iPhones and generated over 100 million views.
The web has changed the rules of marketing. Offline you must interrupt prospects to get their attention.
But on the web, prospects are looking for your product or service, so you are what you publish. Provide them the detailed information they are seeking and they will find you.