Marketing Tactegy

Some Interesting Survey Results on Marketing Effectiveness

I recently fielded an ad hoc survey of European marketers (Northern Europe) on their impressions of how successful they perceived themselves at driving improved marketing effectiveness and support corporate sales objectives.  There were some interesting results that I wanted to share with you.  On the whole the respondents showed reasonable results in terms of their current tracking and measurement of their marketing effectiveness and ROI. 

The bad news on marketing effectiveness and marketing management

There were however 17.9%, just less than 1 in 5 that didn’t measure their marketing effectiveness.  Of these, they were clearly no in the critical path to corporate success.  This is evident in how they answered the question, “How do you set your marketing budget?”  The answers broke down as follows:

• Just less than half of them can’t describe their budgeting process
• Just more than one third claim they do it based on objectives
• Just less than one third set their budgets based on what’s left in the corporate plan

All of these marketers claim that their marketing is not successful at supporting the achievement of the corporate revenue plan.  All of them also claim they are doing even to a little bit worse than their competition.

The good news on marketing effectiveness and marketing management

The good news is that over 80% of marketers can measure some or all of their marketing results.  They do this by measuring direct response, connecting revenue directly to each marketing activity or doing it across the entire marketing mix.  Of these marketers, 70% set their budgets based on marketing objectives.  The other 30% split about evenly to setting their budgets based on a percent increase over the prior year or a fixed percentage of plan revenue.

This means that just more than 50% do some measurement and use specific objectives to set their budgets.  Unfortunately, just less than 50% don’t measure their results and don’t use objectives to set their budgets.  It is these marketers that are simply seen as an expense as opposed to a critical component of the revenue generation process.

If you’d like to hear more about the results from this survey let me know.  Or if you would like to read about this, get ready for my upcoming book specifically on this topic.  Go to www.DemandROMI.com/EvenMoreROMI.html for more information.

I look forward to hearing from you.

Calculating the true cost of an email unsubscribe

I was speaking at a conference on marketing analytics right before the holidays and one of the big questions that marketers threw their hands up on, was the cost of an unsubscribe.  Most marketers just assume this is the cost of doing business.  Others realize that there is some value there but don’t know how to capture and measure how their marketing causes unsubscribes that might have a potential future value for the company.

Unless unsubscribes are considered in the ROI calculation the marketer may be under or over estimating the true ROI of their marketing efforts.

How do unsubscribes influence marketing ROI

Unsubscribes are caused in a number of ways:

1. A prospect changes job
2. The prospect simply isn’t a prospect
3. The prospect just gets tired of receiving innumerable emails from your company

There are probably more, but just using these as a guide, we can start to determine how to tackle this critical marketing effectiveness question.

Sometimes we’ve found that when a person changes jobs, an administrator will actually actively unsubscribe from various emails as they receive emails looking for potential valuable emails sent to an employee no longer employed at the company.  The good news is that these are relatively few.  If it were possible in the unsubscribe process, the email originator, could then ask for the email of the replacement and then potentially begin marketing to that individual.

For prospects that simply aren’t prospects, as might be the case when email addresses are gathered through purchased lists or other reasons, the marketer can again ask for a potential referral to the right person during the unsubscribe process.

In the last case the marketer has spammed their potential prospect once too often and once that happens it may be difficult to ever be able to send a marketing email to this individual again.  Yet when this person entered the list, they were a potential customer for the marketers’ services.  So, what does this mean in terms of potential lost future revenue?

If the marketer could better segment their email list, then let’s assume that their unsubscribe rate could be reduced by 50%.

If the unsubscribers are just as likely to purchase as those still on the list and if the marketers’ unsubscribe rate is 1% per drop using an unsegmented list and, then if an email is sent every month, the incremental cost of not segmenting is:

1 - (1-1% * 50%) to the power of 12 =~ 6%. 

Thus for an unsegmented list receiving a monthly email the additional cost of the unsubscribes is 6% higher than otherwise (assuming the cost of distribution to be zero).

If the unsubscribe rate is 2% per drop, the cost escalates to 11%.

If the frequency of the email drop is instead weekly, these incremental costs grow to 12% and 23% respectively.

The actual calculation is much more complex, but my primary point is that the cost of segmentation is non-zero.

If you would like to understand further how this calculation can be made in full, drop me a line.  I would love to hear from you.

DemandROMI partners with iFusion Marketing and Resultrek to offer valuable Marketing Workshops

My company DemandROMI has been offering workshops on topics concerning marketing ROI, marketing effectiveness and social networking and other critical topics and we have decided to partner up with two great firms to offer new value to our audiences.

I think you’ll find them very interesting and I hope you will be able to attend.  For more information, please visit www.immergize.com – immerse and energize yourself to drive extraordinary returns for 2008.  There are four offerings:

• Social Media Marketing
• Marketing ROI for B2B and Consumer Marketers
• Success in Asia
• Product/Brand Strategy

I hope you’ll find time to attend.