How To Measure Effectiveness Of Your Advertising, Sales Force, Distribution And Sales Promotion ?

Authored By: Anuj Khanna, Marketing Advisor to Tech Startups and SME’s on Branding, Product Marketing, PR & AR

Efficiency Control is one of the four marketing controls that an organization can use to improve the efficiency of their marketing department. By putting this control in place, a Startup / SME can better align its various marketing activities towards achievement of their objectives. These controls also help in reducing overall marketing expenditure.

Using the marketing profitability analysis, the company shall find out which products, regions, markets are earning poor profits. Then the question is whether there are more efficient ways to manage the several areas of marketing, including Advertising, Salesforce, Sales promotion and Distribution for these poorer-performing entities.

To perform this task of Efficiency Control, some companies have a marketing controller who performs sophisticated financial analysis of marketing expenditures and results. Armed with compelling consumer insight and analysis of various elements of the marketing mix, the marketing controller can optimize marketing resources (people and investment) and deliver impactful innovations to market.

• Advertising Efficiency:

In today’s Digital world, this is probably the most basic area to measure and analyze. For all advertising monies spent, Digital as well as Non-Digital, it is important to keep track of the following statistics:

In order to improve the Advertising Efficiency, some of the things Management could undertake are as below:

• Better job of Product Positioning
• Defining advertising objectives
• Looking for better media buys
• Pre-testing and post-testing of advertising messages
• Sales Force Efficiency

Some of the key indicators that Sales managers should keep track of are as below:

By looking at the above analysis, the key sales management questions such as those given below will get answered:

• Are salespeople closing enough orders per 100 calls?
• Are they producing enough new customers and retaining older ones?
• Are the salespeople making too few calls per day?
• Are they spending too much time per call?

When a Startup, SME or Enterprise starts to analyze the sales force efficiency, they shall be able to find areas for improvement, which could often lead to further studies, especially related to productivity.

• Sales-Promotion Efficiency

Management should record the costs and sales impact of each sales-promotion device used for stimulating buyer interest and product trial. The management needs to keep a watch on several statistics, examples of some of those are given below:

• Number of Enquiries from a demonstration
• Percentage of products sold during the price-off promotion
• Cost per Sales leads generated from a Tradeshow
• Percentage of Cash Refund Offers (Rebates) redeemed

A sales promotion manager can analyze the results of different sales promotions and recommend the most cost-effective sales promotions.

• Distribution Efficiency

Searching distribution economies are important for companies of all sizes. The type of distribution that a company adopts depends on the type of the product, target market segment, competitive landscape, product price, company’s resources, etc. There are several tools available to analyze and improve inventory control, warehouse locations, transportation modes, local delivery costs et al. A company could track measures such as:

1. Time is taken to execute orders
2. Number of billing errors
3. Percentage of orders filled correctly and on-time deliveries
4. Cost of logistics as a percentage of sales

What channels you develop and how and at what stage of your product lifecycle you develop them is fundamental to the success of any company today. In case of software product companies, there are considerations like B2C (Business to Consumer) or a B2B (Business to Business), SaaS or On-Premise.

As most SaaS companies don’t physically distribute a product, their channels are somewhat indefinable and need creativity to apply. As an example, one can create a private-label version of their service and offer it to large partners to offer to their customers.

One can also create a packaged offering by joining forces with other companies to offer a larger suite of services. SaaS companies can also work with the ‘’Trusted Advisors’’ channel which shares the same end-customer by providing them tools to help them do more of their core business.