Measuring Campaign Effectiveness

Overview

Measuring campaign effectiveness is similar to measuring customer acquisition costs. That is, it may be difficult to determine whether a new customer or the sale of a product was a direct result of the campaign, or if it would have happened anyway.

Methods

• Promotion Codes - One way to determine which customers and sales are the result of a campaign is to use a specific promotion code during the campaign. Promotion codes are codes that a customer presents during a sale or at sign up, which gives them a discount of some kind, and identifies them as having become a customer as the result of the campaign that promoted the given code.
• Timestamping If no promotion code or identifier is available, the best way to link customers to a specific campaign is to indentify the periods of time in which the campaign was active, and the associate new customers with that period. (subject to the average no campaign acquisition rate, see below)
• Average No Campaign Acquistion - Of course, some people who would have become customers anyway may see and use the code in order to receive the discount. Similar to measuring customer acquisition costs, you might measure the rate of new customer acquisition when no campaigns are being promoted, and then subtract that amount from the results of a given campaign.
• Regression - when a marketer wishes to measure the effectiveness of certain factors, such as customer income or demographics, in influencing a custmoer's decision to buy or not buy, she can use the standard regression tools. (see campaign effectiveness regression)