5 ways to evaluate your Marketing Plan

There's no denying it. You cannot consider yourself a great marketer unless you know your numbers.

Understanding how to evaluate a Marketing Plan, including whether it is delivering the best possible results, can save you money and help you ensure the success of the company's growth plan. Even though any evaluation should start by reviewing the Marketing Plan based on its objectives, here we include a list of ways to assess its success continuously:

1. Market Reaction - The actions of your competitors are often a barometer to measure the success or failure of a Marketing Plan. If competitors race to copy what you've done, the plan is affecting them and should be working. If your campaigns are largely ignored, there may be an issue, and an evaluation should be initiated.

Also, your marketing partners will offer feedback about whether your Marketing Plan is working. Partner feedback reveals the effectiveness of your efforts to suppliers and vendors. These outside team members can feel the effects of a successful campaign before you do because they have more direct interaction with customers.

2. Customer Response - Customer response, in all its varied forms, can help determine the type of reactions your marketing efforts create. Customer service feedback, online engagement, and click-through rate can reveal what your customers think of your efforts and which campaigns or programs have the most significant impact. Basic questions like How did you find out about us? It can reveal which initiatives in the Marketing Plan are reaching the customer and driving sales.

Other complementary metrics can measure the effectiveness based on the tactic or vehicle used in the plan. Make sure you are promoting in the right vehicle. Select media that suits your target audience and strive for accuracy. Online efforts will have more opportunities to gather results on customer response, with the option to optimize continuously.

If your market reach is expanding, the effectiveness of your marketing plan is likely the probable cause. Marketing that reaches new segments, either through customer recommendations or natural, indirect growth, indicates a compelling marketing message and a validated value proposition. Remember that it is always essential for the product or service to deliver on its value proposition, which is tied to the campaign.

3. Sales Performance - They should be going up! Examining the numbers can be the fastest and primary way to determine whether your plan is working. For example, suppose your overall sales for the last period totaled $10,000 (without marketing efforts) and your total sales for this period ended at $15,000. In that case, you can deduce that your Marketing Plan has a positive effect. Consider other variables like a rise in prices or sales strategies, but with all the external factors included and in raw numbers, you are selling more in this period.

Salespeople can be an excellent barometer for measuring marketing effectiveness. Ask for their feedback to determine whether the efforts are practical. If the feedback is overwhelmingly negative or customers are not responding, you should revise your plan to address the sales force's needs better and ensure growth.

Also, check your sales conversion rate. The best approach is to review your historical records and determine whether your conversion rate from lead to customer has improved. Remember that different strategies run on various sales cycles. A brand-building effort typically requires a long-term investment before yielding a noticeable profit. Meanwhile, sales promotions can yield small returns more quickly. Effective sales conversion is a crucial part of achieving growth, so ensure you assess your success in closing the deal, rather than just focusing on generating leads.

4. Cost-Per-Acquisition – You aren't a top-notch marketer if you're not tracking the one metric that matters above all others: Marketing Cost-Per-Acquisition (CPA). Don't get me wrong; all effectiveness metrics are necessary. But while all metrics are essential to any well-run effort, Marketing CPA is the quintessential metric for determining real return on investment. It doesn't matter whether the market or customer response is favorable. Ultimately, the marketing effort is not yielding revenue. It's not successful.

Tracking the historic CPA for each product is essential. If the market conditions remain the same for the new period, the goal for your marketing team should be to decrease the Marketing CPA. These metrics serve as a means to determine the budget required to meet business goals and an efficient way to manage the complex planning process with the finance department. If you are looking for outside investors for your company, the Marketing CPA metric takes more importance.

Marketing CPA is vital to investors. They can determine business profitability by examining the difference between the revenue they generate from customers and the costs associated with acquiring them. Investors are concerned with the current relationship, not with future promises. They use it to optimize their return on investment. In other words, if the Marketing CPA can be reduced, the company's profit margin improves, resulting in a larger profit. Ultimately, investors are more interested in providing the resources the company needs, while the company continually enhances its profit margins.

5. Return-on-Investment – Does the marketing investment bring in enough new or repeat business to justify the expense? Return on Investment (ROI) is the top concern regarding marketing expenses. The ultimate goal is to determine whether your marketing investment yields a profit. All the other indicators can help you evaluate effectiveness, but you must measure the amount spent versus its benefit to assess efficiency. Ultimately, a business must generate a profit to remain viable.

Even if you think you're getting a high ROI overall, you may do even better by changing or eliminating unproductive tactics. When it works, marketing ultimately converts leads into customers. This conversion process should yield a calculable profit. Examine all the marketing plan elements to see which justify themselves financially. You can calculate an overall measurement, but a more accurate breakdown by marketing initiative will tell you exactly which effort was most effective. Continue with the steps that work, and optimize the actions that fall short. The Marketing Plan should be revised accordingly.

One important metric to evaluate ROI is to develop a Customer Profitability measure. According to master marketer Philip Kotler, a profitable customer is "a person, household, or a company that over time, yields a revenue stream that exceeds by an acceptable amount the company's cost stream of attracting, selling, and servicing the customer." Calculating Customer Profitability is a significant step in evaluating the ultimate response to not only the Marketing Plan but the entire operation. You will find out that some customers are unprofitable, so you will be able to focus on acquiring and servicing the most profitable prospects.

CONCLUSION

With "half my media spend is working, I just don't know what half," marketing pioneer John Wanamaker summarizes the difficulty of measuring the effect of marketing investment. While marketing is not scientific, a commitment to evaluation ensures that each effort can be adequately understood and future strategies can be developed based on performance. Today, many companies can engage in highly targeted campaigns to track prospects as they progress from leads to loyal customers. We recommend that businesses create a Marketing Effectiveness Scorecard to track the results of their marketing plan. It should track relevant metrics from all five points to assess the plan's effectiveness in achieving the overall business goals. After all, you aren't a great marketer if you aren't tracking the numbers.

DuartePino is a management advisory firm that combines in-depth customer knowledge with practical expertise in marketing to help clients create sustainable business growth. We can provide your organization with a fresh perspective, a proven process that invests in the outcome, and the tools for successful execution. From Fractional CMOs to business advisors, contact us to learn how our team can help with growth strategies for your organization.