Hierarchy of Effects: Monitoring and Maximizing Your Marketing Efforts

hierarchy of effects

The hierarchy of effects may sound foreign to most marketers but it is a:

Marketing term for the sequence of six steps a consumer passes through from the initial exposure to a product or advertisement to the purchase decision. We commonly divide these steps into phases, as you can see below. The first phase is the cognitive phase where consumers first become aware of the product and increase their knowlege about the benefits it offers. The next stage is the affective phase where consumers use their knowledge of a product to form opinions and attitudes toward the brand. The final phase, the behavioral phase, involves actually making a purchase. Avinash Kaushik uses this hierarchy to build his think, feel, do framework for assessing the performance of your marketing efforts.

hierarchy of effects

A similar concept is the conversion funnel, however, the steps in the funnel take on the perspective of a business rather than the consumer. When you consider the decision-making process as a hierarchy, it suggests that different variables enter the decision at different stages of the process and, thus, require different tactics and messaging.

The consumer decision-making process is really the basis for both the hierarchy of effects model and the conversion (or sales) funnel. The five steps in this process are positioned as a series but that’s really not accurate. Instead, consumers move through the process in a series of starts and stops that can last anywhere from a moment to years depending on decision elements such as risk and involvement, (which different consumers evaluate differently as opposed to representing some objective assessment). Sometimes consumers get stuck at one stage of the decision process for a long time, in other cases, they might skip stages altogether or move through them so quickly that they may have no conscious recognition that they implemented a step. It’s also not uncommon to cycle back to earlier stages in the decision process and then skip around among the stages.

Depicted linearly, the consumer decision-making process looks like this:

hierarchy of effects
Image courtesy of Professional Academy

Why we should care about the hierarchy of effects

As you look at the model of the hierarchy of effects above, you can see a clear correlation to the consumer decision-making process. It doesn’t take too much critical thinking to realize that when you use common assessments of ROI (return on investment), it only captures the last in a chain of events leading to sales, namely purchase. We call these metrics and setting goals related to them terminal goals. Assessing marketing efforts based solely on ROI assumes the other stages in the hierarchy of effects are unimportant in achieving future sales, which is patently wrong if you accept that each stage contributes something to reaching the next stage in the process. That’s why you must set goals for each stage in the conversion process and monitor metrics related to that stage in the process. Ignoring the impact of your marketing efforts on each stage of the hierarchy is lazy, short-sighted, and will likely lead to inaccurate decisions that reduce your profits.

In fact, the most recent version of Google Analytics, GA4, allows owners to set up a number of events to track as conversions, from submitting a form, subscribing to a newsletter, repeat visits to the website, putting an item in your shopping cart, creating an account, and pretty much assessing any page of your website that reflects any action along the hierarchy of effects. By tracking these events, you can better assess your marketing efforts and build insights that help you optimize performance. For instance, you can see which communication channels (ie. organic search, social, or paid) deliver the most positive results for events you’re tracking. Or, you might see how successful you are with different demographic groups or locations (ie. country, city, or region) at each stage in the conversion process.

Maybe you find that you do a good job of attracting 18-25 year-olds to your website (awareness) but fail to get them beyond the knowledge phase or you aren’t as successful with that age group as their older peers in convincing them to add a product to their shopping carts. That insight offers tactics you might try in an effort to improve performance among consumers in that age group.

The customer journey

The first step in assessing the hierarchy of effects process on your website is to map the customer journey, resulting in something similar to the graphic below for obtaining a mortgage. This graphic depicts the stage in the hierarchy prospective customers move through, their thoughts and feelings at each stage, and the opportunities available to the company based on the specific stage of the consumer in their journey.

customer journey map
Image courtesy of Lucid Chart

Once you developed the customer journey map, you can create events for each stage in the journey and set goals for the metrics collected at each stage.

How to take advantage of the hierarchy of effects

Monitor

Monitoring the effect of your marketing actions on gaining awareness and your success in driving consumers through each phase in the hierarchy of effects helps you make informed decisions. For instance, you can monitor mentions of the brand across social media (representing increased awareness) and record these as favorable or unfavorable mentions, called sentiment analysis (reflecting liking or disliking). Tracking sentiment analysis over time is a great way to monitor consumer attitudes toward your brand. Plus, you can track user-generated content related to your brand and engagement across your social media posts as one aspect of creating awareness. The key is to create a monitoring plan containing metrics that access the entire hierarchy, then build a marketing dashboard to track performance across these metrics over time to build insights that can lead to better decisions.

Note in my example, this requires monitoring across all your marketing campaigns, including social, website, digital advertising, SMS (short message services like Messenger), and email marketing to generate data on all your touchpoints with customers and prospects. Thus, you need a variety of monitoring tools such as GA4 (website and Google Ads plus some social and email metrics), Brandwatch (social media), Sprout Social (social media), Moz (SEO), and Hootsuite. You can use a dashboarding tool like Cyfe to bring everything together for easy analysis and to develop insights.

You can also use Kaushik’s think, see, do framework to assess your performance toward conversion. As you can see in the graphic below, he recommends metrics you should track to assess each stage in the hierarchy. He also recommends different marketing actions appropriate for driving consumers toward conversion, which we’ll discuss in a later section.

digital analytics
Image courtesy of Occam’s Razor

Maximizing purchase decisions

Famously, John Wannamaker stated that he knew he was wasting half of his advertising budget but he didn’t know which half. With the plethora of metrics available to track your online marketing efforts and a monitoring plan like the one discussed above, you now know which half of your marketing budget is wasted on efforts with poor results. Using ROAS (return on advertising spend) is also a better comparison metric for analyzing marketing since marketing doesn’t control many of the costs included in ROI, such as administrative costs and overhead.

Tracking how marketing actions change the level of awareness, liking, preference, and conviction helps improve your decision-making. Marketing actions resulting in large changes in the level of these cognitive or affective stages represent successful tactics and you should repeat these tactics, modifying them to ensure you don’t overuse a single message or channel strategy. By the same token, don’t repeat tactics that didn’t improve metrics that make up the hierarchy of effects. This just wastes time, money, and other resources.

Generating sales

Another consideration related to the hierarchy of effects is that sales come when you reduce the friction along the hierarchy. We’ll discuss motivational aspects that move visitors down the hierarchy in the next section but, for now, consider removing roadblocks that make it harder for visitors to convert. You can build funnels to help you assess any event along the hierarchy of effects. In the image below (from Google Universal Analytics) you can easily see that you only succeeded in getting 7% of the visitors who accessed your contact form to complete the form. That’s not a great conversion rate.

multi-channel attribution

The first step toward improving this metric is discovering whether you do better with some user segments than others. If so, think about why that group converts at a higher rate than other groups. Maybe your CTA (call to action) appeals to older visitors. By changing the CTA, you might gain more visitors willing to convert. If you don’t find that conversion is different in different segments, you might try experiments to improve conversion by focusing on key elements of the page containing the contact form, like the enticements provided, the CTA (its color, placement, and content), how much information you require (the less information requested to complete the form, the higher the conversion rate), and images on the page.

Repeat this activity for each event you created, especially critical elements such as shopping cart abandonment. A major roadblock you can easily avoid is creating more transparency. For instance, don’t hide shipping costs until visitors are ready to check out and share information on the expected delivery date early in the process. Surprises at later stages in the sales funnel result in shopping cart abandonment and confuse your decision-making so it’s harder to identify culprits that can help improve performance.

Communication in the hierarchy of effects

You must adapt your communication to fit each stage in the hierarchy of effects, as well as adapt content to the consumer segments you target with your marketing efforts.

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