Hierarchy of Effects_ Monitoring and Maximizing Your Marketing Efforts _ Hausman Marketing Letter

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Written on April 26, 2011 at 4:25 pm by Angela Hausman, Ph. D.

Hierarchy of Effects: Monitoring and

Maximizing Your Marketing Efforts

Filed underMarketing Analytics, Marketing Research, Marketing Strategy {11 comments}

The hierarchy of effects is:

Marketing term for the sequence of five steps a consumerpasses through from the initial exposure

to aproduct oradvertisement to thepurchasedecision: (1) awareness, (2) interest, (3) evaluation,

(4) conviction, and (5) purchase.

Why we should care about the hierarchy of effects

Recently, I wrote a post suggesting that measuring ROI is stupid given the hierarchy of effects necessary to drive

purchase behavior (among other reasons). As you look at the model to the left, you can see that assessments of

ROI only capture the last in a chain of events leading to sales. Assessing marketing efforts based solely on ROI

assumes the other stages in the hierarchy of effects are unimportant in achieving future sales and that

couldnt be farther from the truth. Ignoring the impact of your marketing efforts on each stage of the hierarchy ofeffects is lazy, short-sighted, and will likely lead to inaccurate decisions.

In fact, you can find inaccurate advice given all over the internet and in books simply because sales cant be

tracked to specific marketing actions. A study by Foresee, for instance, shows only 1% of website visits are

motivated by social media. This data is used to argue that firms are wasting their time and money on social

media. What isnt measured in this study is the enormous impact of social media on creating brand awareness

not only that, but social media creates positive affect.

Social media drives consumers far down the hierarchy of effects by creating liking, preference, and conviction


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that the brand is for them based on the engagement of their friends with the brand. To ignore the impact of

marketing on the hierarchy of effects is senseless.

How to take advantage of the hierarchy of effects

Monitor

Monitoring the effect of your marketing actions on phases in the hierarchy of effects will help you make informeddecisions. For instance, you can monitor mentions of the brand across social media and record these as

favorable or unfavorable mentions favorable mentions create brand awareness and may create liking,

preference, and conviction (which can be assessed using traditional market research to measure changes in

attitudes).

Maximizing Decisions

Tracking how marketing actions change the level of awareness, liking, preference, and conviction also helps

improve your decision-making. Marketing actions creating large changes in the level of these cognitive or

affective stages should be used frequently, marketing actions creating little or no change in the level of thesestages should not be used again.

Generating Sales

Despite my feelings about assessing ROI alone, its still valuable to map the increase in sales as part of the

hierarchy of effects. An important consideration in this assessment is tracking how earlier elements in the

hierarchy of effects translate into increased sales. Thats because consumers can back up in the funnel and fail to

move all the way down to the purchase stage. Thats not good. Consumers can also flow out of the funnel (as if

it were porous). Hence, while all stages of the hierarchy of effects are important, consumers must be drawn

from stage to stage all the way to the purchase stage .

If too many consumers are either getting stuck at one point in the funnel or flowing out of the funnel altogether,

theres a problem. Maybe theres a communication problem, maybe a product problem, or maybe theres an

influencer out there complaining loudly about the brand. While the hierarchy of effects model wont help you

figure out what the problem is, it will tell you there IS a problem and tell you at what phase the problem arises

which makes identifying the problem easier. If consumers are aware of the brand, but fail to migrate to the liking

stage maybe the communication theyre getting isnt doing a good job of pointing out the benefits of the brand

to them, for instance.

Extending the hierarchy of effects

While Ive shown the traditional version of the hierarchy of effects model, thats not the end of it. Based on

modern interpretations of the role of marketing, the hierarchy of effects needs to be extended to include:

1. Repeat purchase

2. Loyalty

3. Advocacy

4. Evangelism


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Ill save this topic for a subsequent post.

Questions???? Comments??? Youre always welcome and encouraged to share youre perspectives.

If you appreciate my blog, you might consider treating me to my favorite Starbucks treat in return today! ;-)

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You might also like these:

Why its Stupid to Measure ROI

The Social Media Joke

Maximize Your Social Media ROI: Adapting Service Blueprints

Social Media is a Communication Channel: Social Networks Are NOT

Marketing Planning the Key to Successful Marketing Strategy

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Article by Angela Hausman, Ph. D.

I'm an Associate Professor of Marketing at Howard University, Associate Editor of the European

Journal of Marketing for Social and Internet Marketing. I manage Hausman and Associates, a consortium

providing social marketing, marketing strategy, marketing research, and new product development services to

mid-sized businesses.

Angela Hausman, Ph. D. tagged this post with: decision making, hierarchy of effects, Marketing Research,

monitoring, ROI, social media Read 275 articles by Angela Hausman, Ph. D.


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11 Comments

1. Shanneika Howellsays:

April 30, 2011 at 11:31 pm

Speaking from a students prospective who is always on the go with work, school, and extracurricular

activities majority of the products I use from hair care to the best restaurants in DC are all suggestionsfrom friends. I have seen plenty of companies surround students with advertisements especially on the

internet which is very annoying and does not want to make me purchase the product.

Reply

Angela Hausman, Ph. D. says:

May 2, 2011 at 6:50 am

I think many people would agree with you, Shanneika. I do, however, think theres a place for

traditional advertising as it helps get the ball rolling in social media. Traditional media also has awider reach than social media, so its still necessary. However, I do think they could do a better job

of advertising and I certainly think there could be better integration with social media and traditional

advertising.

Reply

2. Kobenan Dassiesays:

May 1, 2011 at 9:26 pm

I am kind of amazed by the results provided by foresee because I was reading an article in Bloomberg

(entitled Are social Networks gonna blow?) which was arguing that social networks monitor people

buying habits in order to propose them items when they research online. Anyway, if only 1 % comes from

social media, then I would like to know about the remaining 99%. Thanks

Reply

Angela Hausman, Ph. D. says:

May 2, 2011 at 6:30 am

Kobenan, great question. I think the results from Foresee are accurate, its the interpretation thats

off. They measured people buying online based on social media and there are lots of places to buy

rather than online (none of this was reflected in the data they analyzed). A bigger issue is the

Foresee results are based on consumer retrospection, which is notoriously inaccurate folks just

dont know why they do things. A better measure would have been to ask them if they remember

any of their friends mentioning brands in social networks.

Reply

Dr. Angela Hausman says:

April 26, 2011 at 8:30 pm


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Hierarchy of effects: Monitoring and Maximizing your Marketing Efforts: http://ow.ly/4HxeQ

Reply


April 26, 2011 at 8:35 pm

Hierarchy of Effects: #Monitoring and Maximizing Your Marketing Efforts http://goo.gl/fb/wv05c

#marketinganalytics

Reply

Brandchats says:

April 26, 2011 at 8:45 pm

RT @MarketingLetter

Hierarchy of effects: Monitoring and Maximizing your Marketing Efforts: http://ow.ly/4HxeQ

Reply


April 26, 2011 at 8:48 pm

Hierarchy of Effects: Monitoring and Maximizing Your Marketing Efforts: The hierarchy of effects is:

Marketing t http://bit.ly/i8tCW5

Reply


April 27, 2011 at 12:34 am

New Blog Post Hierarchy of Effects: Monitoring and Maximizing Your Marketing Efforts

http://ow.ly/1cmhee

Reply

Mike Redwoodsays:

June 19, 2011 at 6:48 am

RT @MarketingLetter: Hierarchy of Effects: Monitoring and Maximizing Your Marketing Efforts

http://tinyurl.com/3qohx3d

Reply

Mike Redwoodsays:June 19, 2011 at 6:48 am

RT @MarketingLetter: Hierarchy of Effects: Monitoring and Maximizing Your Marketing Efforts

http://bit.ly/mDypUW

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