Efficiency vs Effectiveness​

 

It is easy to think of marketing efficiency and effectiveness as two sides of the same coin with little or no differentiation - both theoretically lead to higher conversions and revenue. However, while both do have a similar aim, efficiency and effectiveness remain wholly different components of your marketing mix – they are fundamentally two different measures of success in the Marketing Value Chain.

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Efficiency measures the success of your process. There are five key areas that intrinsically underpin efficiency in the Marketing Value Chain for any organisation. By focussing on these, one at a time, and ensuring they are all operating efficiently, a more effective outcome can be guaranteed. Efficiency is also a big factor when analysing the marketing Department itself - an internal audit.

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Effectiveness, on the other hand, measures the contributions your marketing strategies have made to the business. Therefore, marketing effectiveness measures are generally more financially-driven such as Customer lifetime value, revenue per visit, and audience share versus competitors.

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Ineffectiveness is easy to spot - if your business does not see the expected return on investment from your marketing efforts, that is ineffective marketing (though identifying the root cause of that ineffectiveness can admittedly be far more complex).

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Inefficiency requires more of a deep-dive into your Marketing Value Chain - spotting inefficiencies often requires an honest evaluation of the marketing strategy to identify where time is being wasted and whether the tasks wasting time can either be disposed of completely, or outsourced.