There are many different types of marketing, each having a specific goal. At a high level though all marketing has the same goal – To generate interest in your product. It is about getting people to raise their hands and acknowledge that they are aware of what you sell, and there is a possibility that they are interested in making a purchase.
There a soft value to putting your name in front of as many people as you can. Brand awareness can be critical to a company’s success. While it’s not a bad thing to increase awareness of your product or service the question becomes that in terms of ROI, marketing programs are often measured using circumstantial evidence.
The bottom line goal of every company is to increase profit. That’s why profit is on “the bottom line” of a financial analysis. There are only two ways to improve profitability – increase revenue or decrease expenses. The prime revenue source for a company is sales.
Take a look at this sales results graph from a hypothetical company that launched a new marketing campaign in January and ended it in May. “Sales Results” is typically defined as orders that are delivered and invoiced.
With complete certainty we can state that the marketing program was PROBABLY a driving factor in the sales increase that began in February, continued to rise until about 30 days after the program ended. We deem the marketing program a success.Are there other factors that could be the root cause of the increase in sales? Of course there are. Better inventory management, improved shipping measures, better invoicing procedures – just to name a few.
So how do you actually measure the success of a marketing plan if not on sales results. It depends on the objective of the program. The most common type of program for small and medium businesses generally has the objective of increasing the number of “Leads”, “Inquiries” or “Requests for information.”
So at the end of the day if the number of leads received during the run of a program went up, the program can be declared a success regardless of the sales results. Sort of like a surgery that is deemed successful regardless of whether the patient lives or dies.
What exactly is the value of a lead? I would submit that if you don’t do anything with the lead, it has absolutely no value. Another way of putting it is this: “A Lead and $2.25 will get buy you a ride on the subway.”
Soooooo – acquiring the lead is important, but selling to the prospect is equally important. If you don’t have a specific plan to follow-up and close as many of the leads as possible, the money you spend on marketing could be wasted.
As Jerry Seinfeld might say “You know how to GET the lead, you just don’t know how to SELL to the lead.”