Efficiency is doing things right; effectiveness is doing the right things. Peter Drucker
So, is there a difference between efficiency and effectiveness for marketing? Doesn’t improving efficiency lead to increased effectiveness and vice versa?
Interesting questions. YES, there is a difference between efficiency and effectiveness. First, efficiency is about getting many things done—that long laundry list of things to do—expeditiously. Effectiveness is about getting the right things done—those critical but non-urgent things that marketers typically put off until another day that doesn’t seem ever to come around. Efficiency dispatches tasks quickly and with minimal effort. There’s something to commend about efficiency and those who are efficient. However, the effective marketer ascribes to the 80-20 rule and focuses on the 20% that is responsible for 80% (the Pareto Principle) of results. Moreover, the effective marketer mindfully resolves those weighty matters that overcome barriers and problems that stymie growth and capitalizes on opportunities to improve brand business performance significantly.
For another, there’s a difference in the impact on the business from efficiency and effectiveness. Efficiency is about producing the same results using fewer resources regardless of whether those resources are people, monetary, etc. On the other hand, effectiveness is about generating more bang for a given measure of time, human resources, or money. When I think of being effective, I think of the word “incremental.” Effectiveness produces more considerable gains in sales and market share than expected. It leverages the asset and elevates its performance.
As per the second question, PERHAPS, an increase in efficiency will “mathematically” lead to a perceived increase in your marketing’s effectiveness. However, this can be illusory. Efficiency is typically predicated on cutting (marketing) resources. For example, if your campaign budget is cut in half, from $10-to $5-million, without triggering a concurrent reduction in sales, it is judged to be more efficient and, therefore, more effective. Not so fast. It could be that the campaign does not have a significant impact on the business, and, as such, a reduction in support makes no difference in results. Accordingly, the campaign budget may be further reduced or eliminated since it is not effective. Curiously, marketing budgets undergo cuts without consideration given to reducing business objectives of sales, market share, and profit. In the instance above, those cutting marketing budgets can’t possibly believe their marketing is effective. If they thought it effective, they would need to reduce the targeted business objectives.
If we think about effectiveness, then choosing one action over another or increasing funding for a given activity will enhance sales, market share, and profit growth. Moreover, it produces a favorable ROI, making it a worthy investment. For example, if we increase our campaign budget from $10- to $12-million and experience a significant increase in sales and market share and a >5-fold ROI, we are truly effective. Or, if we trade-out HCP (Healthcare Practitioner) for CP (consumer-patient) advertising and increase sales and market share substantially, then we are more effective. BIG Ideas fuel effective marketing. The increase in effectiveness leads to an increase in efficiency as the cost per sale is reduced.
YES, there is a difference in efficiency and effectiveness. Increasing effectiveness is about doing the right things in the right way to make your marketing matter more. Pursue effectiveness.
Do the right things and do them in the right way to make your marketing matter more. Read AVOIDING CRITICAL MARKETING ERRORS: How to Go from Dumb to Smart Marketing and take your marketing to the next level. Learn more here: http://bdn-intl.com/avoiding-critical-marketing-errors
Stay SAFE and be well.
Peace and best wishes,