How to Evaluate Your Marketing Effectiveness: 3 Key Areas for Success

Marketing can sometimes feel like a nerve-racking gamble on your business. It can almost seem like throwing down a chunk of change on a roulette table in Vegas, biting your nails, and hoping for the best. Depending upon the effectiveness of the given marketing plan, this analogy may unfortunately be dead-on. Even if the first round of marketing was like spinning that roulette wheel, the most important element of marketing must come into play next: there must be data mined, effectiveness measured, and adjustments made accordingly.

There are three key areas all marketing gurus agree will determine an effective marketing plan from a lame one:

Evaluation #1: Amount of New Leads

We’re not talking collegiate level mathematics on this one. This step in the evaluation process simply requires you to gather how many new prospects a specific marketing piece brought in. How you measure this depends upon the call to action in your marketing piece – phone calls received, replied emails, newsletter sign-ups, etc.

Evaluation #2: Total Cost per New Lead

Unless you were able to pull off the astonishing feat of creating an effective lead generating marketing plan for free, your lead machine will have cost you money. When calculating this amount, be sure to include everything – any postage fees, third party marketing company fees, and the time you and your employees invested on this piece.

Now that you know exactly how many leads your marketing plan brought in from Evaluation #1, and you know how much the project cumulatively cost, you should be able to easily calculate exactly how much each lead has cost you, by dividing the total cost by the number of leads generated. Hopefully when the numbers materialize the cost per new lead seems worth it! There’s only one way to know for sure though, and that’s through Evaluation #3.

Evaluation #3: Conversion Rate

Depending on your industry or type of business, this calculation may take longer to be able to establish than others. Determining the conversion rate of leads to customers will demonstrate exactly how effective your marketing plan was and if it was worth the financial investment. Because the amount of time it takes from a lead to convert to an actual customer varies greatly from one industry to the next, it’s really hard to empirically show the conversion rate for your marketing plan exclusively. Divide the number of converted customers by the original leads brought in, and you’ll determine your conversion rate. This will offer at least a decent ballpark for a measure of its effectiveness.

Hopefully the lead to conversion rate and the cost per new lead number falls right where you’d like it on that marketing roulette table, but if not, don’t lose hope! As you work to develop future marketing plans, you’ll now be equipped with data to adjust greatly or ever so slightly to get the cost per lead and conversion rate at or greater than you’d even hoped.