We’ve come to value the technologies that make it possible to show the impact of marketing on businesses, and it’s been very helpful in illustrating the kind of real value that marketing has on businesses. Metrics such as the number of customer reached and conversion rates are helpful for companies trying to grow and break into new markets.
And yet, a lot of the value in marketing cannot be measured. This is not to say that the value doesn’t exist, but that it’s simply impossible to assign a number to many of the things that make marketing so crucial to a business.
In this blog post, we’ll look at just a few of the reasons the impact of marketing on a business cannot be fully measured.
Most Customer Decisions are Complicated
Sometimes a customer will see a billboard or flyer and immediately call a company. This is an example of a simple relationship of marketing causing a direct effect.
But this isn’t always the case. Or even likely.
Someone may see your billboard, then consider it. A few weeks later they may visit your website, and the websites of your competitors. They’ll wait a little longer. Then, they’ll see a newspaper article on your business and then finally arrive at your door looking to do business.
In this case, what drove this customer to your door? Was it your billboard, your website, or was it reaching out to local media? It’s not entirely clear.
In fact, a good marketing campaign can weave together different media to give a consistent and high-quality brand experience. But by focussing on the separate elements of a campaign, you may lose sight of the value of a sophisticated and multi-part strategy. You may also fall into the trap of unfairly favouring forms of marketing that are better measured — but not necessarily more effective.
Focus on Marketing, Not Metrics
A lot of effort is spent using figures (and sometimes manipulating data) to convince customers of a marketing impact. This accountability is important, but you have to trust your marketing firm that the data they’re showing you is accurate and relevant, but also that they aren’t hiding some figures or jumping to false conclusions about data.
Data can obscure things like public perception, or how people feel towards a brand. You can have a lot of people see your ad, but they may be reacting to them negatively. According to a paper from UCD Dublin researchers, many new online advertising technologies are designed to be “obtrusive, attention-getting, gimmicky” in an effort to attract eyeballs. While these techniques may be able to generate higher visibility and click rates (which look good in reports), but they also risk alienating would-be customers.
Not All Customers are the Same
When people talk about the cost to get a new customer (Customer Acquisition Cost or CAC), it can be misleading. Any given customer could be with you for your lifetime, only have one interaction with you or they could be a lifetime customer
To take stock of this factor, you can take into account the “lifetime value” or LTV. But this is a projected value based on dividing net revenue by the estimated churn rate (or cancellation rate) during a certain period of time. Because this metric is taken at a certain point in time, it doesn’t actually take into account actual long-term changes in a business or an industry, or even the value of nurturing your relationships.
Great Branding Creates Future, Uncounted Value
Others in our industry also champion an approach to marketing that focuses not only on what’s measurable, but also what’s valuable. According to Federated Media Publishing CEO John Battelle, the longevity of those in the business of messaging need “a longer-term vision than the next click, the last attribution, the successful exit or the highest CPM.” Investing in marketing that stresses a brand’s core values helps garner not only attention, but the right kind of attention. And it’s hard to put a number on that.
Building a Brand is an Investment Beyond Just Making a Sale
Your brand is something you have to work to maintain in the long-term. And the careful stewardship of a brand (and not letting it fall prey to neglect) can impact your long-term success. This requires aligning your business and its marketing efforts in a way that will benefit your brand for years to come.
As McKee Wallwork & Company president and author Steve McKee writes, “Your brand, unlike a building, inventory, or furniture, fixtures, and equipment, needs never depreciate. Quite the contrary—brands can increase in value indefinitely as long as they’re well-managed.” While one-time gimmicks and campaigns may add to clicks and impressions, powerful marketing can establish a business’ value, prestige and legacy, and this requires marketing foresight.
We think marketing can create a good relationship between your brand and the public. And instead of solely focusing on finding measurable marketing goals, organizations should concentrate on building trust through their brand.
We also think you’ll know when marketing is working, whether it shows up on the report or not.