The customer decision cycle is too long
Posted: Sun Feb 02, 2025 5:41 am
Problems of Measuring the Effectiveness of Advertising Channels
The topic of correct evaluation of advertising effectiveness is relevant for marketers. Performance indicators need to be analyzed and trends tracked. Let's list three problems that prevent the correct evaluation of an advertising campaign.
For example, you have decided on a channel, launched an advertising campaign in test mode, and spent 70,000 rubles on it. Then you start measuring the effectiveness. The first problem arises: the money has run out, and there are still no clients. Accordingly, sales have not been made, and you have not yet received a profit. This happens because the client's decision-making cycle is too long. Perhaps applications have already been received, but there are no completed transactions, as well as income, yet. Such situations are common in the B2B segment, as well as when selling expensive or complex goods. You should stop hotmail email list broadcasting advertising: with such a transaction cycle, you should not count on a quick profit.
3 Problems of Measuring the Effectiveness of Advertising Channels
Source: Sutthiphong Chandaeng/ shutterstock.com
There are two possible scenarios: firstly, you can periodically measure the number of applications, but we do not know how many of them will turn into real sales; secondly, you can extend the period of test advertising and after some time again calculate the number of sales and the amount of profit.
Advertising pays off not from the first purchase
Also, when measuring the effectiveness of an advertising channel, it is worth considering the following fact: there are many areas of business where, due to objective reasons, it is impossible to recoup advertising costs immediately, from the first purchase. In this case, it is impossible to measure the effectiveness of an advertising test after the first sale. Repeat purchases should also be taken into account.
A striking example is the sale of electronic equipment. The margins of such goods are quite low, but the competition among sellers is very tough. Such enterprises make a lot of efforts to retain the client and encourage him to make repeat purchases through promotional offers, loyalty programs, discounts and bonuses for subsequent purchases, etc.
In this case, measurements need to be made taking into account the customer's lifetime and repeat purchases. But it is quite logical that you cannot predict exactly when he will return to you for the next product and whether he will do it at all.
And again, you have two options: the first is to wait, making appropriate adjustments to the measurements taken; the second is to use the data obtained from the CRM system to calculate the average number of repeat purchases you have, and multiply the revenue from the first purchases by the resulting coefficient. Then you will be able to roughly calculate the amount of profit that customers will bring you in the future.
The topic of correct evaluation of advertising effectiveness is relevant for marketers. Performance indicators need to be analyzed and trends tracked. Let's list three problems that prevent the correct evaluation of an advertising campaign.
For example, you have decided on a channel, launched an advertising campaign in test mode, and spent 70,000 rubles on it. Then you start measuring the effectiveness. The first problem arises: the money has run out, and there are still no clients. Accordingly, sales have not been made, and you have not yet received a profit. This happens because the client's decision-making cycle is too long. Perhaps applications have already been received, but there are no completed transactions, as well as income, yet. Such situations are common in the B2B segment, as well as when selling expensive or complex goods. You should stop hotmail email list broadcasting advertising: with such a transaction cycle, you should not count on a quick profit.
3 Problems of Measuring the Effectiveness of Advertising Channels
Source: Sutthiphong Chandaeng/ shutterstock.com
There are two possible scenarios: firstly, you can periodically measure the number of applications, but we do not know how many of them will turn into real sales; secondly, you can extend the period of test advertising and after some time again calculate the number of sales and the amount of profit.
Advertising pays off not from the first purchase
Also, when measuring the effectiveness of an advertising channel, it is worth considering the following fact: there are many areas of business where, due to objective reasons, it is impossible to recoup advertising costs immediately, from the first purchase. In this case, it is impossible to measure the effectiveness of an advertising test after the first sale. Repeat purchases should also be taken into account.
A striking example is the sale of electronic equipment. The margins of such goods are quite low, but the competition among sellers is very tough. Such enterprises make a lot of efforts to retain the client and encourage him to make repeat purchases through promotional offers, loyalty programs, discounts and bonuses for subsequent purchases, etc.
In this case, measurements need to be made taking into account the customer's lifetime and repeat purchases. But it is quite logical that you cannot predict exactly when he will return to you for the next product and whether he will do it at all.
And again, you have two options: the first is to wait, making appropriate adjustments to the measurements taken; the second is to use the data obtained from the CRM system to calculate the average number of repeat purchases you have, and multiply the revenue from the first purchases by the resulting coefficient. Then you will be able to roughly calculate the amount of profit that customers will bring you in the future.