The effectiveness of marketing initiatives is often measured by the sales they generate in the short term. But to truly evaluate the bottom-line value of marketing expenditures, marketing’s long-term impact on customer acquisition and retention should also be considered.

This is not to say that advertisements and other marketing tactics shouldn’t be measured for the direct sales they generate. It’s simply to state that the full impact of marketing efforts can’t always be measured accurately within a short period of time.

This is particularly true of branding and customer retention efforts, which are long-term by nature. In these areas, marketing strategies and their associated expenses ideally should be spread out over many years, during which assets like brand value and customer loyalty can be measured and tracked.

Changing mindsets

Stop and consider how investments like facility expansions and IT equipment are allocated: they’re depreciated on the books over time and amortized. Why not marketing dollars? Marketing’s very purpose is to influence the target market so that the company can achieve its sales and growth objectives. From this perspective, attempting to capture marketing’s long-term value is entirely valid.

Viewing marketing expenditures as long-term investments requires a monumental shift in thinking for organizations accustomed to targeting marketing efforts to boost quarterly sales figures. But by treating marketing costs as short-term expenses, companies can only expect short-term results.

Perhaps the best way to measure the far-reaching impact of marketing is to calculate the value, today, of all the profits any given customer generates for the business, so long as that customer stays on the books. Then, take a longer-range view by assessing the lifetime value of each customer, a concept referred to as “relationship marketing.”

Long-term focus for long-term profits

Relationship marketing has, at its foundation, a belief that marketing’s value lies not only in creating sales today, but also in retaining valued customers (and their resulting sales) tomorrow. It acknowledges that marketing is a proactive endeavor to move a company in the direction its management team chooses, rather than simply reacting to changes from customers or the marketplace.

Obviously, this is a long-term effort and commitment. It requires companies to know what their customers want and continually offer value propositions that appeal to them.

More companies are realizing that their longevity lies in long-term customer relationships, not individual sales transactions. Managing those relationships through relationship marketing can increase both profits and efficiency.

Companies with longevity in mind can strike a beneficial balance between short-term and long-term marketing initiatives to satisfy immediate sales goals and long-term customer relationships.