Monday, March 22, 2010

Marketing Effectiveness vs. Marketing Efficiency

Today's B2B marketers are facing growing pressure from the C-suite to improve the value provided by the marketing function.  The value created by marketing depends on both the effectiveness and the efficiency of marketing activities.  Marketing effectiveness and marketing efficiency are not conflicting objectives, but they are different.  And both are necessary for marketing to create value.

The essence of marketing effectiveness is producing the required results.  Are your lead generation programs producing enough new inquiries?  Is your lead nurturing program converting enough inquiries into sales-ready leads?  The measures of marketing effectiveness tend to be absolute numbers:  number of inquiries, number of marketing-qualified leads, number of sales-ready leads, etc.

Marketing efficiency is all about delivering effective marketing programs at the lowest possible cost.  Measures of marketing efficiency are typically expressed in dollars and are usually ratios:  cost per inquiry, cost per sales-ready lead, etc.

Many of today's "best practices" in B2B marketing can improve both marketing effectiveness and marketing efficiency.  For example, profiling your ideal customer, developing buyer personas for the people who make up your buying group, and creating content for each buyer persona can improve the effectiveness of your lead generation programs by increasing response rates.  These same activities can also improve marketing efficiency by enabling you to target lead generation campaigns more narrowly.

So far, most efforts to improve marketing efficiency have focused on individual campaigns and programs.  But recently, marketers have begun to focus on improving the efficiency of marketing operations.  Marketing operations is the term for all of the activities required to perform the marketing function.  Therefore, marketing operations would include coordinating the work of external marketing services firms, performing marketing research, and managing the procurement, production, and distribution of marketing collateral materials.

Marketers have started to realize that improving the efficiency of marketing operations can be a great way to conserve marketing dollars and stretch marketing budgets.

The bottom line - marketers must improve both marketing effectiveness and marketing efficiency to increase the value that marketing provides.


  1. Very good post. Working at an external marketing services agency, I can say that just being able to see the sense of relief in not having multiple rounds of iterations for each and every campaign makes our clients very happy!

  2. Trask,

    Thanks for your comment. Please continue to share your thoughts.

    David Dodd