There is an old adage in marketing that states, "you only need half of what you budget for marketing, but the challenge is that you never know which half". Historically, it has been difficult to measure the effectiveness of marketing efforts and budgets directly, because it was difficult to connect responses to revenue-generating actions taken by customers. With the internet and digital technologies, that is no longer the case.
A simple example of measuring the effectiveness of marketing would be to place an ad in a newspaper, and to include a unique call to action that would allow you to identify every customer that came from that advertisement. Perhaps it's a unique phone number, or a unique text message you ask them to send for more information to a specific unique number, or it could be that they have to provide a coupon code to be accepted to a special program. All of these examples allow you to measure the response rate to a specific campaign that you initiated. In this manner, you can calculate revenue generated from the marketing campaign and compare it to the cost of the campaign. This comparison will tell you the cost of customer acquisition and your return on investment for the marketing campaign. In other words, was it a worthwhile investment, or is your money better spent somewhere else?
Google ads, Facebook ads, and other forms of digital marketing, such as mining your customer data and sending targeted email marketing are all much more sophisticated and successful methods of reaching your customers that allow you to capture response data that will help you measure the effectiveness of your marketing efforts.
Use all of the information that you have available to identify, select, and go after the specific portion of the market that you want as customers. Utilize all feedback that is available to tie your sales directly to your marketing efforts. A common mistake of most businesses is that they try to be all things to all people. That's virtually impossible. Select your target markets, initiate communications that will reach your target, and measure the response. This is the basis of a sound marketing program.
