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How To Measure The Impact Of Marketing On Sales Performance

November 14, 2021
Education

Marketing has long been the primary tool of influencing sales. Through the years, it’s been a proven way to increase sales. Business owners plan out their marketing campaigns vigorously in order for their enterprises to thrive. In some cases, a company creates a marketing team solely assigned to gain leads and convert those into sales. Sometimes, it seeks professional services to augment such campaigns.

To ensure that marketing strategies are working and turning business efforts into sales, business owners measure the impact of marketing. This way, they’re able to check whether or not their companies are thriving, stagnating, or recessing.

If you’re a startup owner, you may want to be familiar with this process and use it to your advantage. Keep reading to find out how to measure the effects of marketing on sales performance.

1. Install Inventory Management Software

One of the latest ways to monitor business growth is by installing inventory management software. This tool simplifies the storing of marketing and sales data as well as their interpretation. It helps in identifying the products that sell and those that don’t. In addition, it enables business owners to compare prices, expenses, and gains.

Analyzing the real-time data provided by the application helps owners make certain decisions. Apart from this, it may assist the business in analyzing the reasons a particular product sells out or not. If you’re planning to purchase this type of software, be sure to pick one that’s proven to be advantageous. For that purpose, here are some of the features you may look for:

  • User-Friendliness: The interface needs to be simple and easy to navigate and use.
  • Precise Details: The fonts are readable, and the figures and other data are presented comprehensively.
  • Cost-Effectiveness: The software’s price needs to match what it can do when it comes to data management and sales inventory.

2. Check The Purchase Funnel

In many cases, businesses employ marketing funnels to monitor how a company attracts its mass market. Typically, it starts from the point where the product or service isn’t known. It’s then gradually introduced by advertising the product to solve the pain points of potential customers.

Apart from this, you can use purchase or marketing funnels to check whether a marketing campaign is effective. This could be determined by the number of target customers who bought the product or service advertised. For this purpose, you could use a log to record the gains.

3. Analyze The Incremental Sales

Incremental sales assess a marketing campaign’s efficacy. The data compared are the sales

earned after using a particular marketing campaign and the sales made with no promotion involved. The difference will tell how the sales differ and to what degree the campaign is effective.

To make the most of incremental sales, you may need to set clear marketing goals and performance metrics. You may also try various media channels and incorporate them into your business budget planning. Compare the channels that have the most consistent spike in sales, and check what triggers the increase.

4. Check The Return On Investment

The return on investment (ROI) is a standard performance measure among businesses in calculating the total gain of a marketing campaign. To find the ROI, you must divide the returns by the investment’s costs. It’s either expressed in ratio or percentage. Because of ROI’s simplicity, many use it to gauge an investment’s profitability and a marketing campaign’s efficacy.

While a range of factors affects sales performance, a comprehensive ROI would enable you to evaluate if a particular marketing strategy indeed worked. With the advent of SEO, ROI has resurfaced and has more to offer to benefit businesses and improve their processes.

5. Evaluate Leads

In marketing, leads refer to the connection of the products and services to their potential buyers. Assessing these leads is comparable to the evaluation of a marketing campaign. In both cases, business owners could see the actual status of the business, depending on the effectiveness of the sales contract or probability of sales.

In other words, the volume of leads could also be equal to or near the success rate of the overall marketing campaign. On the contrary, fewer leads may mean gaps in the campaign that need to be fixed for the sake of repurposing the strategy.

6. Run A Product Or Service Survey

Conducting a marketing survey about a product could be an option in determining how successful a campaign is. The survey won’t just be an assessment of the entrepreneurial strategy’s effectiveness but could also be a way to know what the target market is looking for.

In addition, a product or service survey may zero in on its familiarity, strengths, and weaknesses compared to other items. Hence, it could genuinely measure the authentic product reach on the potential market. If you decide to take this route, consider the following points:

  • Define your goal.
  • Identify your target audience.
  • Simplify your questions and make them short. Provide easy choices if possible.
  • Make your questions and survey design eye-catching.
  • Analyze your data.
  • When interpreting the data, accept a margin of error ranging from 4% to 8%.
  • Consider including the brand name, specs, configurations, and prices.
  • Subtly place a call to action in every survey if it’s your business initiative.

7. Conduct Product Testing

In many cases, this has something to do with how the market perceives a specific product. Yet, this could also be viewed as a reliable way of measuring your marketing’s impact. However, you may need to run two product testing sessions to have more detailed and dependable results.

The first testing is to make your target market familiar with your products or services. Then, run a short marketing campaign. After that, carry out the second product testing. You could create an analysis drawn from the comparative data between the two sessions.

The other option is conducting two controlled, randomized experiments about one particular product or service. This way, one of the experiments uses a marketing campaign to be measured while the other one doesn’t. The difference in lead generation or sales as affected by the movement is the data to be analyzed for the benefit of the business.

8. Interview Customers

You may also opt to create a team that’ll communicate directly with your potential market. This is similar to surveys; the only difference is that the answers or feedback are observed and written. Since this is a face-to-face process, the customers could provide authentic solutions—good or bad—involving your business, products, or services.

For better results, the members of your team should appear neutral and shouldn’t divulge their association to your business so they won’t affect the customers’ answers. You may consider interviews in the form of peer or focus groups. Or you could try one-on-one interviews. The former will save you time but may give summarized answers, while the latter could consume a lot of time but is likely to provide detailed responses.

9. Evaluate Customer Retention And Loyalty

When your customers patronize one or more of your products, they’ll keep returning for months or even years from the time your products are introduced to the market. It only means they’re satisfied with your products and loyal to your business. These customers could turn into your customer base, which is a solid source of leads in the long run.

But before you jump into classifying a customer as loyal, you may want to know that you could group loyal customers into the following:

  • True Loyal Or Advocates: These are fans of your products and services. They make up the consistent leads.
  • Repeat Business: These are loyal customers who are satisfied with what you offer but could still change their minds if something better becomes available to them.
  • Product-Engaging Customers: These have irregular buying patterns and preferences, though they still choose to purchase your products or hire your services. Even so, these buyers could change their minds for some reason.

10. Study Conversion Rates And Patterns

Checking conversion rates and patterns may allow you to see the leads and sales generated by your marketing campaign. In addition, you’ll have a bird’s-eye view of the available conversions that happen to your business. This will anchor on the number of visitors who’ve bought or subscribed to your product or business.

For optimal results, you may want to try going straight to the revenues that have been directed to your business and the different platforms they’ve passed through. In doing so, you could identify the strong points of your marketing campaign and the weak parts you could adjust or replace.

Final Thoughts

Marketing is the soul of a business. Without an effective marketing campaign, a company will likely fail in the long run. But because many business strategies are flexible, you can make necessary modifications to ensure business efficiency. In this regard, you may need a versatile marketing strategy that could provide custom-fit solutions to short- and long-term troubles alike in your business.

If you’re looking to start a marketing plan for your business, you may want to learn more about how marketing strategies work. This could include the measurement of the effect of marketing on your overall sales performance. In connection with that, you may assess your marketing’s efficiency through the various methods discussed in this article

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