Question

How can marketers know how to measure the business contribution of their marketing efforts?

This question lies at the center of all marketing challenges. How do we measure effectiveness?

It seems an organization's foundational philosophy of marketing's purpose lies at the core of decisions and strategies. Marketing can include product development based on customer needs and wants, or from an alternative purpose, it can be primarily a sales focus. Even in considering these two directions, many options exist in this spectrum of purposes.

That brings to mind how an organization can structure their marketing department. Should it be sales-focused (removing inventory) or product focus? (satisfying customer needs)?

What are other alternatives?

What factors do you think determine how marketing is employed within an organization?

Answer 1

Measuring the effectiveness of the marketing effort has been a great challenge for the marketers for the past many years and this problem of effectiveness measurement is more difficult in the offline marketing environment. However, we do have some tools and techniques to measure marketing effectiveness and its ROI through different sets of tools. The attribution model somehow tries to justify the marketing effort but marketing alone can not perform the sales or final conversion. As the customer advances in the purchase journey the role of marketing starts to decline and the role of sales starts to increase. However, the attribution model helps in the identification of the source of the customer as from where the customer was sourced and this can be a point of justification for the marketing effort.

There has been a various school of thought on the effort and focus of the marketing, marketing can not be only product-focused or the customer-focused, there has to be a balance in the approach as customers are product functions can not work in their own silos. The product must be connected with customer need and the role of marketing is to bridge this gap between the customer-facing function like sales and product development.

The factors which determine the way marketing is employed in the organization are the nature and value of the product, type of organization (size and complexity), size of customer base, Industry type. Each organization has its own way to employ the marketing function which fulfills its business objectives.

With the advent of the digital era and company's are putting more focus on digital marketing, the role of the marketing function has further enhanced and the marketing team is also able to prove their effectiveness through the various measures and tools available to measure the effectiveness of the marketing campaigns.