Resources > Articles

Does an Increase in Awareness Really Increase Revenue?

Post Author
  • Dave Daniels is the VP of customer success at Pragmatic Institute. His mission is to ensure that each Pragmatic Institute customer has what they need to successfully implement the Pragmatic Institute Framework. For over two decades Dave has helped technology companies succeed as a software developer, sales engineer, product manager, product marketing manager, executive, leader and entrepreneur. Dave enjoys snowboarding, CrossFit and barbecue. He's a dad of three amazing kids and the product of a military family. Dave has a BS in computer science with a minor in mathematics from Columbus State University. Contact him at ddaniels@pragmaticmarketing.com.

aida

 

I was challenged to demonstrate the causal relationship between generating awareness and revenue. Intuitively, I believe the relationship to be related, but I didn’t have sufficient data to prove it.

I searched for a report or other research that could help satisfy my intellectual curiosity. I found anecdotal evidence, but none that passed any scientific rigor. Maybe my search terms were wrong.

I started to question my conventional wisdom that awareness comes first. That is, if potential buyers don’t know we have a solution to their problem, how would we ever get considered? Awareness drives interest, right? Which brought me to AIDA.

 

AIDA

AIDA is an acronym for attention, interest, desire, and action. Attention equates to awareness. Interest follows attention: I like what I see; you have my attention; I am interested. Desire connects a need with a product. Not only am I interested, but I also want what you have. Action is what we want a buyer to do. We equate purchase with action most of the time.

AIDA can take me down the path of measurement in a finer grain way. The initial challenge sought evidence for a causal relationship between attention and action. Now I have steps from attention to interest to desire to action that can be measured. In other words, if A is to B, and B is to C, and C is to D, then A is to D. This AIDA thing just might work.

 

Attention to Interest

Attention is measured in many ways. One simple way is responses to advertising. For argument’s sake, let’s say I delivered 5,000 impressions of an ad that yielded 500 responses. That translates to 500 people who have awareness of my product.

I can measure the relationship between attention and interest. The cost of the 5,000 impressions is $1,000, giving a cost per response of $2. The percentage of Responses is 10 percent. Are you tracking with me so far?

To keep it simple we’ll refer to the responses as sales-qualified leads (SQLs).

 

Interest to Desire

Desire may sound a little creepy (I didn’t invent AIDA), but hang in there. Think of desire as a marketing qualified lead (MQL). There is more than Interest. There is a desire to want my product. Assume that 10 percent of the SQLs convert to MQLs. That works out to 50 MQLs. The cost per MQL is $20.

So far, the attention (awareness) has a direct relationship to 50 MQLs, but no revenue.

 

Desire to Action

Assume that five of the 50 MQLs made a purchase. They took the action I wanted. Each purchase was $400. The total amount of revenue is $2,000, and it all started with attention (awareness). In this simple example, a $1,000 investment in attention (awareness) yielded $2,000 in action (purchases).

 

Wrap Up

The answer is that awareness can increase revenue. But that doesn’t mean it always increases revenue. As you plan your awareness campaigns, what are the goals of the campaign? How do you know you’re achieving your awareness goals? Are you tracking the right metrics?

Take the first step in learning how to effectively generate awareness for your products and register for a Pragmatic training session today.

Register

Author

  • Dave Daniels is the VP of customer success at Pragmatic Institute. His mission is to ensure that each Pragmatic Institute customer has what they need to successfully implement the Pragmatic Institute Framework. For over two decades Dave has helped technology companies succeed as a software developer, sales engineer, product manager, product marketing manager, executive, leader and entrepreneur. Dave enjoys snowboarding, CrossFit and barbecue. He's a dad of three amazing kids and the product of a military family. Dave has a BS in computer science with a minor in mathematics from Columbus State University. Contact him at ddaniels@pragmaticmarketing.com.

Author:

Other Resources in this Series

Most Recent

A dashboard on a website showcasing product management measurement
Article

Measurement-Driven Product Management

If you are a vice president, director or team leader for a product management function, one of the biggest challenges you face today is how to demonstrate the team is making a significant contribution to top line or bottom line targets. If you can’t measure your team’s effectiveness, or if you are focused on the wrong metrics, your headcount and budget allocation could be at risk.

Product life cycle: Introduction, Growth, Maturity, Decline
Article

23 Metrics Mapped to the Product Life Cycle

Learn what to measure and how to avoid vanity metrics during each stage of the product life cycle: development, launch, growth, maturity and decline. Also learn the difference between a mission and objective and how to identify which stage your product is in.
ROI of being market driven. An image with illustration dollar signs
Article

The ROI of Being Market-Driven

Market-driven companies are more profitable, twice as fast in getting new products to market, and have higher customer satisfaction levels.
Article

23 Metrics Mapped to Each Stage of the User Journey

23 metrics for the user journey, which is the path a user takes while interacting with your product (sometimes called a flow funnel).
A person holding up a sign that say who is responsible
Article

Product Marketing or Product Management

Roles Before Titles The job titles of product marketing manager and product manager are confusing enough to start raging debates about who does what. Organizations often transpose the job titles, adding to the confusion. This article

OTHER ArticleS

A dashboard on a website showcasing product management measurement
Article

Measurement-Driven Product Management

If you are a vice president, director or team leader for a product management function, one of the biggest challenges you face today is how to demonstrate the team is making a significant contribution to top line or bottom line targets. If you can’t measure your team’s effectiveness, or if you are focused on the wrong metrics, your headcount and budget allocation could be at risk.

Product life cycle: Introduction, Growth, Maturity, Decline
Article

23 Metrics Mapped to the Product Life Cycle

Learn what to measure and how to avoid vanity metrics during each stage of the product life cycle: development, launch, growth, maturity and decline. Also learn the difference between a mission and objective and how to identify which stage your product is in.

Sign up to stay up to date on the latest industry best practices.

Sign up to received invites to upcoming webinars, updates on our recent podcast episodes and the latest on industry best practices.

Training on Your Schedule

Fill out the form today and our sales team will help you schedule your private Pragmatic training today.

Subscribe

Subscribe

Training on Your Schedule

Fill out the form today and our sales team will help you schedule your private Pragmatic training today.