Steal the big boys' methods of measuring marketing - for a fraction of the cost
If you learn one thing from this article, make it this: The only way to run a marketing campaign is by the phrase “test and measure”.
Every single piece of marketing activity you do must be closely monitored and its performance challenged. You can then test a new idea and check that it works before spending a significant sum on it.
This is something that large companies are very good at and small businesses tend to overlook.
When a company such as Gillette runs an in-store promotion in supermarkets pushing razors at a cut price, do you think it measures the effectiveness by gut feel? No way! It wants hard data on sales figures, and soft data on benefits to the brand (collected by market research).
It's unlikely that you will have a large marketing team to help you do this in your business. But you can take the big boys’ concepts and apply them to your small business. Here are five easy steps to do just that:
1) Know where you are starting from
Before you do any piece of marketing, you must understand how your business normally performs. For example if you had a shop, you must see how a product sells for a few weeks at full price, before applying a discount and measuring sales again. This is a basic marketing step, but one that so many businesses ignore.
You can’t truly measure the effectiveness of marketing until you know where you’re actually starting from. Get in the habit of collecting “normal” data for everything you sell all the time; having this data to hand can speed up marketing experiments. Also be conscious of any seasonal or other effects on sales, especially in the run up to Christmas if you sell consumer goods.
2) Measure the effectiveness of one piece of marketing at a time
Once you have established the normal pattern of sales for an item, you must only try one piece of marketing at a time on it. If you apply a discount and a three for two offer on an item, you won’t know which of those is most effective!
Of course you could be testing the effect of running both promotions together... but first you must find out the effect of each one individually.
3) Collect data from everywhere
Marketing data can come from a surprising number of places. And you want to capture as much as you can, to give you the best possible chance of finding out what is really going on.
Big retailers such as Boots and Tesco use loyalty cards to track purchases and spot trends they can capitalise on. You might not be able to do this, but how can you take the concept and apply it? Ask for data from customers (especially during the purchasing process) and make it structured for easy comparison.
4) Cross-reference data
Imagine sales of a particular product shoot up, and you manage to find out most of the new customers come from a certain area of the country. What a powerful thing to know... because you can then try to answer the question of “why” and look at what other products you can leverage with that knowledge.
If you can keep all of your marketing data in the same place – even if it is just a simple spreadsheet – you will find it easier to cross-reference data and create marketing opportunities.
5) Make it simple
Some of these steps look difficult, and yes you could spend months executing them. But that’s unlikely to benefit your business. Instead take these steps and keep them as simple as possible within your business. As long as you are doing some kind of measurement of your marketing (and acting on it), you will be leagues ahead of many of your competitors.
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