One of the most complex problems in the field of marketing management, one that directly affects the entire activity, is that of measuring the effectiveness of the marketing activity - how do we do it right?

One of the most complex problems in the field of marketing management, which directly affects the entire marketing activity, is that of measuring the effectiveness of the marketing activity.

I meet many business owners and most of them say that they are willing to invest in advertise only when they know for sure that they will see a return on their investment. This line of thinking of the “bottom line” only – how much money will get in the register, is not sufficient in modern time. In a way, this line of thinking is even dangerous for the business.

In personal conversations with decision makers in small and medium-sized businesses, and in my research, I found that the above way of thinking is the result of lack of general understanding and professional knowledge regarding marketing processes.

My firm has worked for many years with small and medium-sized businesses in Israel. We found that business owners in the field usually engage in incomplete activities.

Before we continue to explain why it is important to change the prevailing thinking patterns, we should detail the complexity involved in marketing:

The effect of marketing processes is measured both in the short term and in the long term.

It is relatively easier to measure the effectiveness of short-term marketing processes since the long-term results can be influenced by numerous manipulations (Ambler, 2003).

In addition, marketing expenses are usually measured annually and are immediately compared to the sales report to see the effectiveness of the sales. Nevertheless, marketing products can cumulate and are not necessarily measured within a single year. Increased sales can be the result of activities performed in the prior year rather than the actions taken this year (Sheth et al., 2009).

Marketing products are both tangible and intangible.

Measuring the tangible products is easier and more accurate in most cases. The measurement of the intangible products is more complex and it is based more on evaluations and is less defined (Ambler, 2003).

Marketing activities take place within a dynamic and changing environment that cannot always be controlled by the marketing factor.

Consumer behavior, competition, and legislation can directly affect marketing outcomes without one being able to control those factors (Rust et al., 2004).

Marketing activity takes place within an internal environment that includes defined human capital within the organization.

Proper marketing activity is initiated by management and becomes part of the organization. In reality, however, the marketing activity is “held hostage” by managers and is not properly transferred to the other members of the organization (YoelSullam and Josef Cohen, 2009).

In addition, in most cases, marketing managers have only partial knowledge regarding the activities they perform themselves (Corkindale, 2009).

In most cases, there is a lack of distinction between business development activities and marketing activities, which makes it difficult to create an understanding of what is to be measured (Clark, 2000).

Availability of information is an aspect that marketing managers will often admit they do not know how to measure.

There are more than 30 methods to measure marketing effectiveness, but I believe that the difficulty is with the marketing managers who want to manage the subject of marketing using the only general information they hold, information that is easy to get, without willing to make the effort to obtain the relevant information.

The question is, do not all marketing managers measure the effectiveness of marketing over time?

Well, information acquisition processes refer to processes in which marketing managers acquire new information relating to the field of marketing.

From the study of 75 small and medium-sized businesses, we found that organizations advance in stages as they implement processes of acquiring information in the field in question.

In the beginning, the organization is not aware of the results measurement processes and does not deal with this type of measurements. In the next stage, only financial results are measured.

In the third stage, business managers understand that the measurement of financial results is insufficient and they begin to acquire additional tools to measure non-financial aspects.

In the fourth stage, the company or organization develop a strategic focus for its entire activities alongside tools for examining the activity market.

In the fifth stage, the company adopts a more scientific approach using a database, which stores real-time information as well as information relating to past activities and uses advanced tools in order to perform an integrated testing of the marketing results.

At the time of our examination, we found that the division of businesses in relation to various stages looks like this:

The decision-makers ability to move from the second stage to the more advanced stages usually depends on implementing a process of change. Such a process is not simple and it challenges the very specific knowledge the manager holds. In other words, such a process involves a change in thinking that challenges existing knowledge. The safest way to accomplish such change is to add knowledge to the existing knowledge the decision maker holds.

Each stage involves its own challenging issues. As mentioned above, the main difficulty during the first and second stages is to change the existing managerial thinking that will enable the organization and its managers to advance to the third stage.

The third stage involves the difficult decision regarding the tools we want to use. The gap between the managerial understanding and the implementation is very high. In my doctoral research, I found that most managers complain that the implementation of advanced tools in the marketing discipline takes up too much time and they cannot afford to devote the time required.

The fourth stage introduces complex challenges relating to the organization's strategic focus.The true meaning of focus is that of giving up a lot of in-depth focus on only a few issues.

From the case study of 75 small and medium-sized business owners, it was found that 84% of business owners did not agree to make a strategic decision without the intervention of a marketing firm. The findings also show that these business owners did not know what their marketing strategy was.

Companies and business owners provide a wealth of rather compelling reasons why not engage in measuring marketing results (Ambler, 2003). Our latest survey found that most small and medium businesses do not engage in measurement activities beyond the measurement of what they refer to as “the bottom line” (78%). It is important to understand that the partial use of the marketing results analysis leads these small and medium-sized businesses to carry out partial managerial behavior as well.

Following are recommendations to improve the activities in this field:

 A desire to create change - the manager and owner of the small or medium business needs to have a desire

A desire to make a change, a change that at the statistical level promises better results. The change begins when there is a will. We can create change the minute we want to do so, simply by adding information and thereby expanding our knowledge.

A good documentation of the organization’s history, financial knowledge, and knowledge of outcomes is required

Documenting the data and the knowledge will enable tracking and be monitoring the results.

Patience– marketing processes take time

In order to create a smart, efficient and effective marketing system, you must engage in analysis and invest time and thought into the process. These things take time. Make time and have meetings and discussions on the subject - it is just as important as providing services to customers.

Study the subject

When you search the word “marketing” in Google Israel, you receive 11,900 results in 0.28 seconds. There is a lot of material on the subject.Read and expand your existing knowledge. You can also participate in courses and workshops to improve and expand your knowledge.

Corporate culture supports marketing

Marketing can be promoted by establishing an organizational culture that supports marketing.

Establish a uniform professional language

Choose methods that are clear to you and make sure you explain them to the entire team. By creating a uniform professional language in your organization, you can create a broader base of people who will receive the vast amount of information.