In marketing, effectiveness can involve increasing conversion rates while reducing acquisition costs, while efficiency can involve supporting a wider range of marketing goals while contributing to the greater good and return. on the organization’s investment. While each goal is not mutually exclusive of the other, where do marketers draw the line between efficiency and effectiveness?
What do we mean by efficiency and effectiveness?
The first obvious question is: what do we mean by efficiency, in relation to marketing? The adjective effective simply means “achieving maximum productivity with minimum wasted effort, time or expense”, so effectiveness would refer to extremely productive marketing efforts with minimum expense, wasted time or effort. Metrics such as click-through rates, conversion rates, and other measurable means are used to demonstrate marketing effectiveness. Efficiency tends to be about less expense or more savings. Inefficiency is more difficult to identify, as it takes a better understanding of ongoing processes and procedures to know which ones are inefficient.
The word effective is said to mean “succeeding in producing a desired or intended result,” so for marketers it would mean being successful in contributing to marketing campaigns, resulting in sales, conversions, and increased clicks for a business. Efficiency tends to be geared towards greater profitability. If there is no (or reduced) return on investment, then generally a distributor can be considered inefficient. InsightSquared in very succinct terms: “Being efficient is doing the right things, while being efficient is doing things right.”
“Marketing must be measured by its impact on the company’s ROI. Conversion rates and acquisition costs should be considered by the marketing team to improve campaign performance. These are good indicators of campaign health and are a call to action for campaign optimizations. Yet, the primary focus of marketing should be efficiency and revenue outcomes. Monthly marketing expenses should not exceed the revenue generated from sales during that period,” said Ana Aragon, Director of Marketing and Communications at white shark mediaa digital marketing agency and PPC management service provider.
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Marketers can be both efficient and effective
Clearly, the best results are achieved when marketers, like all employees, are both effective and efficient at their jobs. If they pursue the right goals and are efficient in doing so, with a higher return on investment than otherwise, without wasting time or effort, it is easy to be satisfied with the result. On the other hand, employees can be efficient at their job without being efficient, and conversely, they can be efficient at their job without being efficient. Efficient employees save time, effort, and money, but if it comes at the expense of return on investment, they’re not very efficient. Effective employees do their jobs well and complete their tasks, but if it’s at the expense of time, effort, or cost, they’re not very effective.
A real-life example of efficiency versus efficiency is someone who has set a goal to go to the gym regularly. They start out going to the gym 7 days a week. Because working out makes them very hungry, they end up eating one extra meal a day, which is usually fast food. They get discouraged because despite spending so much time in the gym, they don’t see any positive change in the mirror. In fact, they see changes, mostly weight gain. They managed to achieve their goal of going to the gym regularly, but not effectively, as they waste time and effort. They set the wrong goal to begin with – they should have set a goal to be healthier physically. They could have hit the gym once a day, four days a week, eat healthier foods every day, and be efficient and effective in achieving their goal of being healthier.
According to Sara Spivey, Director of Marketing at Brazing, a New York-based customer engagement platform provider, it’s not about choosing efficiency over efficiency, because they’re both critical to marketing success. “Marketers shouldn’t draw a line between the two, as the two can and should be done in tandem. Rather than worrying about finding the right balance, the focus should instead be on measuring each appropriately to achieve broader marketing goals. For example, effectiveness can be measured in conversion rates and cost per lead, while effectiveness can be seen in opportunities closed and return on spend.
Measure, then re-examine goals and results again
As most marketers realize, continuously measuring the results of one’s marketing efforts is critical to their success – after all, without measurements, how do you know if they’ve been successful or not, or more importantly, are they? the budget that is devoted to marketing production a return on investment?
How do marketers typically measure success? According to a HubSpot report, only 15% of marketers measure the success of their content programs by the number of leads they generate, yet 67% of brands use lead generation as the sole metric to determine content success. Additionally, 75% of marketers use their reports to show brands how campaigns directly impact ROI, but ROI is only part of the equation.
Does an SEO campaign produce results? What about Facebook ads? Google AdWords? The email marketing campaign? What about radio ads? Each of these marketing efforts produces data that can be used to measure its success or failure, depending largely on the expected or desired outcome. Are they reducing CAC while increasing leads or sales? How do they affect CLV?
Spend efficiently to become more efficient
Michael Welts, Marketing Director at Wasabi, a cloud storage and services provider, said that by re-examining marketing mechanisms, brands are able to refine and improve conversion rates, which in turn lowers acquisition costs. customer (CAC). For Wasabi, that meant creating thought leadership and educating the market about cloud storage. “We found that the simplicity of a message combined with a direct and easy call to action (CTA) led to an increase in the number of free trials, which is one of the main barometers of sales and the adoption for our business.”
For other brands, it may be time to reconsider the effectiveness of their current media marketing program, as there may be many opportunities to optimize it. “For example, you might look at your total spend on search engine marketing and realize that you haven’t allocated enough money here and you may be missing thousands of conversions. Since search engine marketing search engines can be directly attributed to sales conversions, it might make sense to shift your money a bit to prioritize here over branding or lead generation activities,” Welts said.
These types of changes can lead to an increase in the effectiveness of the marketing campaign, depending on the effectiveness of what is spent in specific areas of the media marketing program. In order to become more effective, brands need to focus on quantifiable goals, expectations, and strategic direction.
Like other experts we spoke with, KC Karnes, Content Marketing Manager at CleverTap, an AI-powered customer lifecycle and user retention platform, said efficiency and effectiveness matter, as long as marketers aim for the right targets and have the right intentions. “The caveat is that you can be effective at optimizing metrics that don’t impact results and drive real growth. Simply put, efficiency can either exacerbate a bad problem (like having a leaky holding bucket) or help speed up a good thing — like growth sustainability,” he said.
As an example, Karnes cited a marketer who focuses on increasing app installs, 95% of which are abandoned after a few days. This is a prime example of ineffective marketing. “You’re effectively “wasting money” because you’re not actually growing your user base with these installs. They (your users) don’t stick around!
Karnes isn’t suggesting that app installs are bad, only that this kind of mindset neglects other parts of the lifecycle and confuses movement with progress. “That’s why alignment around growth metrics is so important and why teams need to focus on the entire customer journey and experience together.”
Retaining a user over a long period of time — or better yet, indefinitely — is what truly effective marketing looks like, and that’s where sustainable growth is, Karnes pointed out, rather than new installs. ‘apps.
“Instead of just focusing on new installs, look at the relationship between installs and retention rates – and what happens in between for a user. In other words, are you actually effective or just effective? to a metric/step,” he suggested.
No one likes to believe that he is ineffective at his job, but it’s not much better to be seen as an effective but ineffective marketer. By prioritizing goals and desired outcomes, marketers can become more effective while increasing leads, sales, CLV, and ultimately ROI.