How can you measure whether your site is effective?

It depends on the goal. If your goal is to increase revenue, then measure the revenue attributable to the web site through a system of contact forms, client signings, and good bookkeeping. If you goal is increase in inquiries, then track the inquiries from one contact form or from call in questionnaires. If your goal is simply to increase traffic, then any statistics package that is installed on your web server should do the trick. Of course, you must first set your goals for the site.