Marketing can make a dramatic contribution to your success, yet many businesses fail to measure how effective their marketing is. Marketing research can help you assess the effectiveness of your marketing strategy and measure the performance of individual campaigns. You can use market research and benchmarking to help plan your marketing strategy and methods. Very often it's the combination of marketing activities that produces results.
Measuring marketing performance using benchmarking
It can be very difficult to predict marketing effectiveness in advance, or even to accurately measure marketing performance afterwards. A campaign you have invested in heavily can produce disappointing results. Apparent success can be difficult to interpret - how much did your marketing really contribute to the increase in sales and which marketing activities were the most effective?
Marketing research can make a big difference, helping you measure your marketing ROI (return on investment). For example, advertising research can use simple tracking mechanisms such as coded advertising coupons that let you identify which publications are generating the best enquiries. Web analytics on your website can generate statistics showing how visitors behave and which pages are encouraging purchases.
Marketing analysis and benchmarking doesn't only help you measure marketing performance - but also predict and improve it. For example, techniques like list splitting allow you to test different versions of a mailing to find out which one will work best. Knowing which marketing messages and media work best helps you spend your marketing budget more effectively in the future.
Strategic marketing analysis
Market research can also be used to assess overall marketing effectiveness at a strategic level. For example, you might want to research whether you are charging the right prices or compare different distribution channels. You can also use brand research to analyse the cumulative impact of your marketing campaigns in terms of brand recognition and reputation. Or you might want to carry out a benchmarking exercise, comparing how you market and how much you spend against competitors and industry norms.
Successful strategic marketing analysis starts with a clear idea of where you're starting from and what you are trying to achieve. You can then identify key marketing metrics that help indicate marketing performance. For example, if your strategy focuses on product innovation, one key metric might be the percentage of your sales coming from new products.
Other common marketing metrics include measures of customer satisfaction, sales per customer, response per campaign and pounds invested, loyalty levels, percentage of market share and new customer acquisition, as well as the volume and type of customers that leave. All this should be measured against what you and your competitors are doing, to see how they tie together.
Marketing research like this can help you identify what changes you should make. For example, brand research may reveal negative impressions that you need to correct, perhaps by changing your marketing messages. It can also help you identify where your competitive edge lies and how you can capitalise on it.