|Getting New Customers In This Endless Recession
by Gary Kreissman , Friday, August 19, 2011
We all know the script now, don’t we? The latest financial crisis comes, the markets overreact, the politicians throw up their hands, and the consumers hide under the bed and stop spending. Then the marketers try to figure out how to grow while their staffs and budgets are being cut for the second time in three years. Not a recipe for a happy ending — or for holding on to your CMO position.
But maybe this time the marketing characters in this little play can rewrite the story. When consumer spending looks to be plateauing at a low level, smarter customer acquisition becomes a must. Let’s take a look at four ideas resourceful marketers are implementing, assuming we are in the midst of an ongoing downturn that never quite mustered a recovery.
· Use CRM strategies for prospecting: CRM is all about relating to your customers on the terms they prefer, and exceeding expectations.Tremendous expenditures go into segmenting customers and identifying what motivates their loyalty. But in the Endless Recession, loyalty will erode, simply b
ased on consumers’ diminishing resources.
Now, it is solid ROI thinking and good defense to apply the principles behind CRM to segment your prospects too. Why? Because some prospects are worth a lot more than average to your franchise in both the short and long run. And those valuable prospects likely have very different interests and needs than typical prospects.
· Focus your limited resources on your most valuable prospects: It just makes sense to invest where you’ll get the best return. So define what makes a valuable customer for your business (e.g., frequency of purchase, volume of purchase, net worth, attitude). Once you have the definition, put disproportionate spending — and thought — toward finding and nurturing more of those customers. That may mean higher perceived value offers, more personalized service, “inside” access, or greater variety of ongoing contacts (e.g., email, postal, phone).
Since you’re reading Performance Insider, you no doubt know that securing qualified leads can be done by exchanging your offer for prospect information. Tailor your initial incentives to ferret out the valuable consumers who still have the disposal income to step up and show their potential interest in buying your product. Get them into your database first – then build a relationship on common ground to convert them from hand-raisers to enthusiastic customers.
· Let your best customers be fruitful and multiply: Social media operates on the assumption that “like attracts like.” And that’s a strong sentiment in bad economic times. During the worst of the ’08 debacle, I often noticed friends bragging about the great deals (or value added) they got from hotels, airlines and retailers. They generally didn’t have to be asked by marketers to share these stories – they were simply a badge, a symbol of survival. So if you have strong economic or informational offers for your most valuable customers, many will talk about them and others will want them. But imagine if you further sweeten the offers for customers who actively share with peers. This can be much stronger social leadership than being the mayor of some bar.
· Offer relevant incentives: Marketers should not use standard offers in bad times. Consumerism or overt prestige repels strapped consumers. But value works. Discovery often does. And hope is welcomed – think of Coca Cola selling happiness in ’09, or Obama‘s brilliant ’08 campaign. Your offers simply need to address new realities and provide pragmatic solutions
The advantage to recognizing and working within your target customers’ recessionary world is loyalty. That translates to market share now and significant revenue growth when this Endless Recession finally does end.
What Monopoly Can Teach Us About The Video Business
by William A. Lederer , Friday, August 5, 2011
While audience viewership, available content, ad inventory, and time spent are all surging, the online and mobile video industry continues to experience ownership consolidation. In thinking through video industry next steps, I am reminded of lessons learned from playing the board game Monopoly with friends and family long ago during the lazier days of summer.
Lesson #1: Location, location, location. I’m not talking about physical location, rather an advertisement’s or video’s proximity to the right audience in-context. Trust and relevance are paramount to attracting and keeping audiences, whether you are delivering content or advertising. You still have to offer the right message and deliver it optimally, but without the right location — as all good “Monopolists” know — you will rarely reap “green” results from “pale blue” properties.
Lesson #2: Don’t over-improve your property. Online video is not about going for broke on just one option; produce more and different content or ads, instead. This is akin to focusing all your hotels on Park Place and Boardwalk — or worse (e.g., Baltic and Mediterranean). While you have nice, shiny hotels, you can be handicapped by having virtually nothing else on which to collect rent. With online video, experiment until you get it right. This is not TV for now. You should not suffer from high production costs, decision-making barriers, elapsed time, or meddlesome middlemen. Take a few calculated risks in content, audience, and buys and build from there.
Lesson #3: Start slow and then build up while, constantly looking for great deals. You need not and should not put money down on every opportunity. Be selective of video inventory as to quality and relevance, always keeping in mind that someone may be coming behind you to seize what you may have neglected. While prices and rents in Monopoly are fixed, video requires both buyer and seller to be aware. Great deals and not-so-great deals exist at nearly every turn.
Lesson #4: Know your numbers. In video, as in Monopoly, an analytical approach bears the most fruit. Understand how success is best measured in the most relevant way for you. Determine your key performance metrics. What drives them? Creative? Format? Distribution? Technology? Audience? Category? Placement? Social Media? Virality? Frequency? Effective Reach? Engagement? Effectiveness? ROI? The buy? Optimize your results to the best of your ability. Most importantly, know the limits of your budget. Running out of money will leave you mortgaging your properties or worse.
Lesson #5: Luck cannot be underestimated. Strategy and skill can overcome poor execution and relative access to capital, but luck, the roll of a dice and the poor choices of one’s competitors or suppliers, can count for a lot. Landing on “Free Parking” or one’s own properties can revitalize oneself when built-up monopolies challenge us at every turn. Maximize the likelihood of achieving and seizing upon your own luck. For online video, as in all other business, chance favors the prepared mind.
Measuring ROI: a Primer for Online Marketers
Steve Latham Business Strategy July 12, 2011
As marketing dollars have become more scarce, the importance of measuring ROI and building a business case to support investment has become paramount. For those seeking to better understand this subject, here’s a “simple” methodology for quantifying value. In this case, we’ll look at ROS (return on spend = expected revenue divided by cost of online media) and ROI (expected net present value divided by total investment) from online campaigns. If you find it to be of value, or if you have additional questions, please comment below.
Steps to Calculating Value
1. Determine the Value metric (Revenue, Margin, NPV) of a customer.
Some companies look at value of a transaction, annual revenue per customer or lifetime value (profit) of a customer. Some assign higher values for new customers vs. a new sale to an existing customer. You need to determine what is best for your organization (hint: choose the metric that is most used by your executives). For this example, let’s assume your average sale is $1,000 and that the lifetime value of a customer is $5,000.
2. Assign conversion rates to approximate close rates.
Let’s assume 3% of site visitors request more information (inquiries) and that 30% of inquiries complete a purchase. If you’ve done online campaigns before, you should have a basis for inquiry rates. Hopefully your VP-Sales know how many leads convert to a transaction. If 3% of visitors become leads, and 30% of leads are closed, 0.9% of visitors will become customers.
3. Determine what your cost or investment will be.
Let’s assume you will spend $10,000 in online advertising (display, search, email, etc.) this month.
4. Do the math to calculate ROS and ROI:
Assuming your efforts drive 2,000 incremental visitors to your site (cost: $5 each) you should see 60 new leads (3% conversion rate) and 18 new customers (30% close rate) worth $18,000 in revenue or $1.80 direct ROS ($1.80 in revenue for every $1 spent).
If you present these types of results to your CFO, you’ll quickly find a lot of interest (and dollars) in online marketing.
Another Metric: Value per Engagement
Another way to measure results is calculating value per engagement (visit, inquiry, etc.). In the example above, each visit is worth $9 in revenue ($18,000 divided by 2,000 visits), whereas each inquiry is worth $300 ($18k divided by 60), compared to a cost per visit of $5 and a cost per inquiry of $166.67.
Remember Your Margins
While revenue is an easy metric to measure, margins are much more important. Assuming your gross margin is 60%, you are making profit as long as your cost per visit is less than $5.40 or cost per inquiry is less than $180.
Please use good judgment when applying these methodologies to your own business. Again, these are not a panacea for every situation. But hopefully, they will give you some building blocks for quantifying the impact of your interactive marketing program. If you have specific questions, please leave them here. I can’t promise I’ll know the answer, but I’ll do my best to help you figure it out. Happy number crunching!
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More about Steve Latham.
About the author
Steve Latham has written 2 posts for Houston Technology Center Blog
A thought leader in digital media, Steve Latham is the founder and ceo of Encore Media Metrics, which provides advanced campaign measurement, attribution and reporting as an on-demand service to leading brands and agencies. Encore helps marketers look across channels and beyond the last click to optimize spend and maximize ROI. Prior to launching Encore, Steve founded, grew and sold Spur Interactive, a respected digital marketing agency that specialized in strategic planning, execution and measurement of integrated media campaigns. In this role, Steve planned and executed successful campaigns for leading brands, including FedEx Office, Continental Airlines, ConocoPhillips, The Scooter Store, Oracle and many others. Steve is a frequent speaker at industry conferences including DMA11, Search Engine Strategies, OMMA, Online Marketing Summit, and the eMetrics Summit, and his articles have been published by MediaPost, iMedia and Marketing News. Steve is a Harvard MBA with a background in software, private equity and consulting. Of his achievements, he’s most proud of recently being awarded “World’s Best Master” by his two dogs Jake and Callie.
|Social Media Delivers — But Multichannel Integration Delivers More
by Lisa Arthur , Friday, June 24, 2011
According to a recent BtoB Research Report, nearly all (93%) of B2B marketers are engaged in social media marketing. Likewise, another study revealed that the vast majority (84%) of the Fortune Global 100 is active on at least one social media platform.
Why all the interest and activity?<
Because social media produces results. New data shows that social media is delivering solid, proven ROI. What’s more, it’s cost-effective, too. In fact, one report concluded that organizations using predominantly newer inbound marketing tactics (blogs, search engine optimization and social media) now experience a cost per lead 62% lower than organizations that use mostly outbound marketing techniques (print, direct mail, etc.).
Without question, social media is proving itself increasingly valuable as a way to reach out to and connect with consumers. Plus, it’s easy to measure and provides nearly instant gratification — for both our online audience and for us as marketers, too.
Does that mean you should be focusing solely on social media for lead generation?
Absolutely not! Social media alone is not enough. Today, your marketing approach — whether you’re B2B or B2C — needs to fulfill two essential requirements. It needs to be multichannel, and it needs to be integrated.
Use multichannel tactics to increase reach
The challenge today is to engage your prospects in ways that are varied and unique. You want to be bold. You want to engage customers with conversations and capture audiences with creative and compelling messages. But, don’t rely only on social media to accomplish those tasks. Instead, design your campaigns across a variety of channels, so you offer a seamless, compelling experience — wherever your prospects are, and whenever they choose to engage.
You need to reconcile today’s latest digital technologies with the traditional offline strategies we’ve depended on for years. In other words, don’t forge ahead so quickly that you sacrifice success on channels you’ve already mastered. Work on simplifying your message so that you can manage the ever-expanding spectrum of channels and offer your prospects information that’s relevant across all touchpoints.
Integrate both online and offline channels
As marketers, we often create artificial barriers to our customers, but in all honesty, there’s no reason to separate your online and offline mix. Success today depends on tearing down those kinds of silos, both internally and externally. Once you do, you’ll be able to integrate all the different channels so your messages blend to create an experience that’s new and refreshing.
Fortunately, a variety of simple-to-use analytics and marketing tools are available to help marketers with both integration and focus. These tools can help determine which initiatives resonate with prospects, so that you can refine your messaging as campaigns progress.
A few words of caution here: Remember that consistency is fundamental to effective integration. Variability can erode the value of your product or service, so ensure your branding and messaging is consistent across all channels – traditional and digital.
New research continues to show us that social media platforms are becoming more and more valuable for lead generation. But don’t make the mistake of pinning all your hopes on this one tactic alone. A few tweets won’t cut it. One YouTube video won’t launch sales through the roof. Instead, approach social media as one part of an overall plan that includes a variety of integrated online and offline channels. By aggregating and analyzing data, you’ll be able to better understand your prospects’ buying behaviors, and you’ll start thinking strategically about how to apply those insights to grow your business even more.
|Video and Social Media Marketing: Getting C-Suite Executives To Lead
by David Murdico , Wednesday, May 4, 2011
I recently spoke at a social media marketing conference at my alma mater, The University of Southern California, on the topic of how social media and other marketing professionals can best get their C-level executives involved in, invested in, and taking leadership roles in video and social media marketing. I identified three areas that I feel are most important: education, integration and return on investment (ROI).
Many senior-level executives are reluctant to make the jump into video and social media marketing, and with good reason. Launched without proper planning, expectations, or without full support, social media campaigns can carry risks to the success of their brands, products, services and to their very jobs.
• Familiarization: Point out the strengths and weaknesses of social media, video and viral marketing, including what’s possible, what’s working, what hasn’t worked — and why.
• Trust: Teach executives to trust their teams and let them run with the responsibility. Allow them to experiment, share in the successes and failures and learn together. Encourage them to rely on the teams they have assembled and let them do what they do best.
• Perspective: Impress upon them that social media is another valuable tool in their marketing toolbox, not a complete paradigm shift. Marketing is still about influencing behavior and selling more stuff. Social media is yet another way of accomplishing that goal.
Social media marketing shouldn’t exist in a bubble. There should be a larger strategy at play. Including these points will help when presenting social media as an option to senior leadership.
• Mixing It Up: Mixing social media with existing advertising, PR, and sales initiatives increases the reach of each initiative. To a C-level executive, this may mean the difference between total buy-in or back-shelving social media for now. Also, the point of video marketing is to create conversation about video assets and spread the brand message in that space. If you are not working with a viral marketing agency, internal PR teams should be consulted during campaign conception and not alerted as an afterthought.
• Real-Time Interaction: Social media allows brands and businesses to interact in real time as an extension of other media initiatives. Reactive engagement is key in establishing and maintaining a consistent flow of communication between your brand and the influencers and consumers who support the brand. Social media is also invaluable in trouble-shooting and problem-solving.
• Manage Expectations: (Paid vs. Earned): Many C-level executives are still under the impression that social media is free. Clarify that paid placements including TV ads, video banners, blog and publication outreach and other initiatives should be at play to jump start social media success. The idea is to go from paid marketing to earned marketing as the campaign progresses. Earned is the free part.
• Purposed vs. Repurposed Video: Encourage executive buy-in for branded entertainment and original online video by planning ahead and producing content that can be repurposed as TV ads, outdoor advertising, banners and PR assets.
3. RETURN ON INVESTMENT (ROI)
Social Media campaigns are all over the map in both return and measurement of return. That’s enough to make any executive nervous.
• Soft return vs. hard return: Soft measurables like hype, buzz, awareness and brand lift are important, but can often fall flat in front of a C-level executive staring down the barrel of a sales spreadsheet. Eventually, no matter how much brand awareness we can generate and measure, the bottom line is still about selling stuff. This point must be addressed before significant buy-in can be expected.
Predictive ROI: Establishing a favorable return on investment prior to approving, developing or launching a campaign is key. Once you have measurable goals in mind, back track to map out a social media strategy that will achieve these goals. If the cost of the social media initiative is less than the predicted rewards of achieving the goals, then launch away!
|Video Insider for Wednesday, May 4, 2011: