In a perfect world, we’d all have an infinite amount of money to spend on things such as innovation, marketing, and connecting with customers. Instead, we’re faced with budgets and hard choices on how to spend them. Marketers may have hundreds of ideas but the resources to do only a fraction of them. So which ones do we choose? How do we know we’re making the smartest decisions?

The answer is a process known as relative-value modeling. It involves figuring out the potential impact of activities before we do them. ...

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