Companies investing in marketing undoubtedly have plenty reasons to launch the marketing campaigns that they do. But most of the time it’s hard to predict (let alone calculate) what the campaign will bring the company, and if it will pay itself back. And even afterwards it is not always easy to measure, or determine otherwise, whether or not the campaign had the desired effect. In this post I’d like to discuss how CI can contribute to determining how effective your marketing efforts really are.
In order to fully understand the effect of marketing campaigns (and this doesn’t have to be a nationwide TV-commercial during the world cup finals, it goes for any campaign, no matter how small) you need intelligence on both your own company performance and your environment – the latter being Competitive Intelligence whilst the first would be Business Intelligence.
BI should be – among other things – the intelligence provider when it comes to your own company. Whether your campaign aimed at improving your sales and market share of your existing product or the launch of a new product, your BI activities will show the impact. In the first situation you should be able to determine the impact of the campaign during a certain period, if in advance you were able – to a certain degree of accuracy – to predict the sales for that period. In case of a product launch, it’s very hard to measure the impact, because you have no ‘normal’ situation. You could compare it to similar launches, or to predictions made by your company, but it’s not very reliable to say the least. So what we have now is a clear view on the effect your campaign had on the sales, based on which we can determine – and in some cases quite accurately – what the financial impact of the campaign has been on your revenue. In some cases this might be enough to justify the investment in marketing, but if you stop here without a clear view on the effect of the campaign on your environment, you may well be counting your chickens before they hatch. And that is where Competitive Intelligence comes into play.
Many external factors are (potentially) influenced by your marketing campaigns. And that is why you should not draw conclusions based on sales figures only. Let’s discuss some of the external factors that you should consider:
Especially for non-retail companies, it’s important to monitor the sales throughout your channel(s). You could sell a lot of product to your distributors, but they may well be accumulating stock, instead of selling it to retailers. Or the retailers are buying your product, but have difficulties selling it to their customers. The end customer is not the only one acting on your marketing activities. Retailers and distributors may order a lot of product based on your marketing campaigns, anticipating expected increase in demand. For this reason, many companies monitor the sales (and stock) throughout the channel with a Point of Sale system, which could be considered on the divide between BI and CI.
Whereas a successful marketing campaign in the end results in increased sales, a more direct effect on the customer would be the way the campaign makes them feel about your product. The best way to measure this, is to directly look at what they communicate about your product, in the media of their choice. In the previous post about reputation management and other posts about sentiment analysis (see the links below) we’ve discussed this process of measuring sentiment and how this can help you understand the effect of your marketing activities.
Another important aspect that influences effectiveness of your marketing efforts is the way you present yourself and your product. Ideally you should consider this at forehand, but of course it can also help you explain the effects of your campaign. In presenting yourself you should focus on your unique strengths of course, your USP’s, your competitive edge. In order to do so, you need to know the weaknesses of your competitors, which is of course an important aspect of CI. Take Apple for instance. Let’s say you are a competitor to Apple. You could of course aim your campaigns on the coolness and design of your products. Even if you are right, even if your products are better looking, odds are that you lose because of the perception consumers have about Apple products. Apple’s marketing machine did a great job here and created a strong image, which is very hard to break. But Apple also has weak spots of course. In measuring consumer sentiment about Apple (as described in the previous paragraph), I’m sure you’d find a lot of negative sentiment regarding service and support. If you believe in your own service level, you may want to spend your marketing resources on that topic and try to distinguish yourself from Apple.
Hopefully the above shows that measuring (and analyzing) effectiveness of marketing campaigns has a lot to do with Competitive Intelligence. And above examples are not the least bit exhaustive. A lot of external factors influence the effectiveness of campaigns. Shell may want to focus on their care for the environment (I’m not saying they actually do). Volkswagen may now focus on their reliability, now that Toyota’s reputation is steadily decreasing. But also demographic, political or technological factors may influence your campaigns, and these are all important aspects of Competitive Intelligence. So for your next marketing campaign, would you still rely on insights based solely on the sales results of the previous campaign? Or would you prefer to broaden your vision and make a more educated prediction next time? If you put it like this, the answer is not that difficult, is it?