Marketing Tactegy

Social Media ROI Interview Series

Steven Groves of the Social Media Bible and I are embarking on a series of interviews on the topic of the ROI of Social Media.  The first in this series was with Marcel LeBrun, CEO of Radian6.  We will be doing many more and it should be a very interesting series of metrics and measurements to drive increased ROI in Social Media.

Check them out here: http://socialmediabible.ning.com/profiles/blogs/roi-of-social-media-series.

Let me know what you think.

Is BANT dead?

BANT & Marketing ROI

I was talking with a friend in B2B marketing and we were working through the issues with BANT.  In particular the ‘A’ of BANT.  ‘A’ stands for Authority.  That is, does the lead contact have the authority to make a decision on the item being promoted?  And, how can this lead classification improve marketing ROI?

Target Marketing and Corporate Decision Making

In selling business-to-business (B2B) products & services, the question has to do with the decision making process within the target organization.  In large organizations and depending on the value of the capital good being sold, there is usually a committee.  Certainly, there are specific individuals in the organization that have more sway in the decision than others.  Certainly it is better to have VP or C-level backing for your proposal.  But do they truly have the authority to make the decision?  Most efficient managers have a vision and the proposed solution has to fit within that vision.  But there are always competitive solutions and there are almost always others involved to some extent in the decision.  And smart VPs and C-Level executives are going to want to delegate the decision into the organization so that they can own the choice and further enhance the success of the implementation.
The decision making group is either a formal or informal committee.  The committee can be made up of just direct reports in the department or it can be a multi-departmental group across all of the key departments in the organization.  These can include:

Finance
HR
IT
Marketing
Operations
Purchasing
Research & Development
Sales
Security

Some of these individuals can’t say ‘yes’ to a particular investment but they can say ‘no’.  Some of them are just worried about how the solution is going to affect their jobs.

B2B Purchase Authority

The definition of Authority needs to be expanded to now include terms, such as:

Individual is a ‘member of the committee’
This solution needs his/her blessing
This individual will be the prime mover in the implementation
This solution will impact my/my department’s daily workflow

Further, how should an inbound call be classified when the administrative assistant or a low level manager asks for information about your product/service?  Are they gathering information for the VP?  Are they just trying to learn about a topic?  Are they providing informational materials for the purchase committee?  Will they be recommending the solution to their boss based on their research?  Are they a member of an informal or formal purchase committee?

Enterprise Marketing

This has clear implications for how services are marketed to prospective customers.  For enterprise sales the primary objective for marketing is to support the sales team in developing and expanding their key relationships with each of the members of the purchase committee.  Without these relationships, sales will be at a significant disadvantage versus the competition. Using this new definition of contact and authority classification, marketers can improve their targeting to better support the sales team in accelerating sales and growth.

Here is another great post on this topic.  It compares BANT to SCOTSMAN and another mnemonic, but in each case we need to further detail out the Authority term:

(http://blog.market2lead.com/blueprint/2009/03/the-scotsman-vs-bant-for-effective-lead-management.html)

Let me know what you think.

 

5 Key Questions for Marketing ROI 2010

I was talking with one of my clients and having just completed a very fascinating project, I thought I would put this together.  It lists 5 questions for planning marketing ROI for 2010.

I’m sure there are many more, but I believe that these encapsulate the issues that we need to think about as we go into 2010 after having survived 2008 and 2009.

www.Marketing-Calculator.com/Files/5_Key_Questions_for_Marketing_ROI_2010.pdf

I would love to hear your comments.

 

Marketing Effectiveness and ROI – now in Malaysia

It looks like my calendar is filling up for the summer.  After the June conference in Boston, in July I have been invited to speak and present a full day marketing ROI workshop in Melaka, Malaysia at the INCOMAR 2009 (2nd INTERNATIONAL CONFERENCE on MARKETING and RETAILING 2009) conference put on by the Chartered Institute of Marketing Malaysia and the Universiti Teknologi MARA.  I’ve spent a lot of time in Malaysia recently and it should be fun to be able to put on this presentation and workshop with this group. 

Many of the concepts from my book, Marketing Calculator:  Measuring and managing your return on marketing investment.

For more information, please go to:  www.marketing-calculator.com.

I hope you can attend. 

Challenges in Statistical Marketing Mix Modeling

Benefits of Marketing Mix Modeling

Marketing Mix Modeling has been used for many years now and has been able to help marketers significantly improve their marketing budget allocations and other key tactical marketing decisions.  It has led to many improvements for many companies in how they drive revenue, profit and share,  helping marketers to choose creative campaigns and many other critical tactical decisions.  They allow analysts to relatively easily deliver models that support budget allocations and diagnostics to drive more revenue out of their hard-won marketing budgets. 

Challenges of using Marketing Mix Modeling

One of the biggest challenges in  modeling is on the data.  Now in the US and elsewhere Nielsen and IRI and others have developed cost effective means to provide (at reasonable cost) sales, price and distribution, and in-store data on a weekly basis across the category.

Pitfalls of Marketing Mix Modeling outside of the US

Outside of the US and the major countries in Europe other factors come into play - in particular coverage and granularity.  In Russia, for example, data covers about 40% of the retail sales volume and is often concentrated in the major cities.  In addition, the data is available only on a monthly or even bi-monthly basis - making it nearly impossible for traditional, statistically based MMM's to provide hard and fast answers.

Using Agent-Based Modeling and Simulation

A new technique based on agent-based modeling, where agents represent virtual consumers, is now gaining momentum and is a viable alternative in these data-stressed countries and categories.  Because the agent-based modeling is based on consumer choice, even in the face of less than stellar data they can deliver robust results in order to improve a marketer's strategic and tactical decision-making. 

If you'd like to learn more give me a ring.  I'd love to hear from you.

Social Marketing Strategy Refined

As the social marketing space moves into the mainstream, we need to take a more sophisticated approach to our social marketing strategies and tactics.  The more sophisticated marketers are moving from a shotgun approach to a more targeted approach with more reliable success.  Below are some thoughts on two approaches in order to get the discussion going:  The shotgun approach and the targeted approach.  I am very curious to hear how you are developing your social marketing strategies and what you are doing to measure their success and apply that to improved future actions.

The shotgun approach

The shotgun approach basically looks at the market, takes a couple of stabs at it and sees what sticks.  This has worked (presumably) in the past because social marketing has generally been able to deliver a lot of value at a relatively low cost.  And as with most new frontiers, it’s often hard to fail even with a relatively weak or non-existent overarching strategy.  In a fast growing medium just about anything can succeed, delivering a great results and with some ongoing tweaking the shotgun approach can quickly coalesce into driving meaningful Marketing ROI.

The analytic approach

An analytical approach to successful targeting of social media looks at the target consumer segments for our physical product or service and builds a cross-section of the social media active segments to determine potential high value micro-segment opportunities.  This approach focuses on the following questions:

• What are the consumer segments we are currently targeting?
• What is our penetration in those segments?
• What is the competitive penetration each of these segments?
• Are there segments available that offer some real opportunity and where we offer a strong competitive value proposition?

These are pretty standard questions for any marketer, but how does this backdrop apply in the social media space?

Just as we have to target our traditional media buys, so too must we target our social marketing activities.  With social marketing activities, however, we are competing on a different plane.  In the traditional media space we are competing at the category level with physical products and services.  In the social media space we are competing in the entertainment space.  Our social marketing consumers are spending their valuable time, instead of their valuable money.  They could be playing a video game, watching TV or participating in another social media activity.  The social media activity could be for some other category or it could be with a competitive social media site. 

In order for our social marketing to be successful we need to provide a high entertainment value in order to generate interest and develop enthusiasts in addition to delivering lots of visitors.  Our offering has to compete on this new plane.  We need to target the specific segment active in the social media space with specific entertainment activities that will drive brand value in this entertainment oriented target segment.  Once we have been able to drive improved brand value we know that this can lead to improved conversion (due to the mechanics of choice – see http://marketingtactegy.typepad.com/blog/2007/06/ingredient_bran.html) at some point in the future. 

In essence we need to deliver a social media experience that competes with other social media and entertainment venues consumed by our target audience that can positively drive brand equity in the minds of our consumer segments.   It is an entertainment product that provides value to our target audience.  Just as we need to understand the competitive landscape and opportunities to successfully launch a new physical product (or service) so too, must we launch and deliver a social media activity as if it is a new entertainment product competing for time with our target audience.

In my next post I want to talk further about how we can improve our brand results through our social marketing by understanding these micro-segments and how our messages in the social space can be used to potentially drive the value of specific, high-value brand attributes that feed the consumer choice equation.

If you have any other thoughts on this, I would love to get your feedback.  If you would like a more detailed discussion on choice, please visit http://www.Marketing-Calculator.com.

Marketing and marketing ROI in a Recession

Everyone seems to be writing on this topic so I thought I would also chime in.  Times aren’t great for marketers, unless you have a couple of key arrows in your quivers   It’s not easy to cope, when it seems like nothing is working, sales are down 30 to 40% and the company is threatening payroll cuts.  And the CFO and CEO are saying cut your advertising budgets by 30% or else.

As we put our plans in place to survive (and thrive) in this market, what we’ve seen from our clients is that consumers seem to be trading down.  Instead of purchasing extravagant or luxury items they are holding off until they have confidence about the future.  They are looking for the bare minimum, the absolute necessities and where they can get these at the best price.  Discount redemptions are going up. The value placed on a premium brand is falling.  Instead of shopping in their preferred channel, they are shopping in a channel known for low cost.  WalMart comes to mind.  WalMart reports they are doing very well across most categories, although this may also be due to lower gas prices. (February Retail Sales Stronger Than Expected, by Sarah Mahoney in MediaPost, http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=101585)  Our own anecdotal evidence shows that other value brands and offerings also seem to be doing well.

Consumer behavior and choice

If this is the case, what has changed in consumer behavior and how can we potentially change our thinking to take advantage of this dynamic.  Here are a couple of thoughts and questions: 

1. Are shoppers simply trading down in their channel selection but purchasing premium brands in a value channel (as WalMart’s success might allude to).  Do marketers need to focus solely on lower price or will shoppers trade down in their channel selection and trade up once in the door?  Do we need to maintain our premium price in the value channel, or do we need to cut prices across the board?
2. If consumers have temporarily exited the category, how can marketers retrieve them in order to re-grow the category and then drive preference for their brands? 
3. Once consumers are shopping in the category how have consumer preferences changed and do brands need to change their messaging to take advantage of it.  Once consumers have chosen to purchase in a specific category consumers make choices based on a combination of their preferences for specific functional and emotional attributes.  For example, has the emotional preference for the ‘good value for the money’ brand attribute changed, or has the disutility of price changed?

I’m sure there are other questions we could start to ask ourselves and our consumers in order to determine how consumer behavior has changed and how we can potentially take advantage of these changes.

I would love to hear what you’re experiencing as you try and survive and thrive in the uncertain economy. 

I also have a question for you and that is, how do you see your marketing investments changing over the next two quarters (Q209 and Q309)?  Will spending be made to gain share in a down market, or will the finance team win and marketing will be cut to maintain margins?

I look forward to your views.

Measuring the effectiveness of social media

One of the hotter topics right now in metrics is how to measure the success of social media.  Many social marketers are looking for the answer to this seemingly simple question.  The good news is that there is a lot going on here.  As I’ve become involved in metrics and have spoken around the world on this topic I’ve learned that there are no easy answers.  There is however a framework with which to develop an answer.  (If you’d like, please visit www.marketing-calculator.com for information on a generalized marketing effectiveness framework.)

At one level the number of visitors to a social site can be one measure of success.  At the next level we have to measure the level of engagement.  Time spent on site, the number of comments, videos or other content submitted can be an indicator of success in the social media space.  Unfortunately, these measures don’t determine how successful these social marketing activities are at delivering sales in the stores.  Just like there is an indirect link between TV and in-store sales, so too, is there an indirect link between a consumers’ social media activities and sales in the store.

So we need a measure of transforming this emotional engagement into brand awareness/consideration and preference/purchase intent.  Once we’ve done this, there are a number of tools that we can use to actually calculate the effectiveness of a social marketing activity.

But this is only backward looking.  As marketers, we want to look forward into the future.  How well will this next social marketing activity drive awareness, engagement and sales in the store?  For this we need to use a number of different tools (not complex) and then put the pieces together.  However I will address this in my next post.  In the meantime if you’d like more information or discussion on this topic, feel free to reach out to me on LinkedIn (www.linkedin.com/in/guyrpowell) or at www.DemandROMI.com.

 

Excuses, excuses, excuses...

I just read this article and I loved the quotes (uhh, I mean excuses)

Here are a few relating to the early success (or better termed ‘results’) of mobile marketing campaigns (Texting by the numbers, Steve Smith, MediaPost, 12/16/2008, http://www.mediapost.com/publications/?fa=Articles.san&art_aid=96827):

"It is early days."
"The learnings will be invaluable moving forward."
"But these folks who did opt-in are our core customers with a great multiplier effect."
"The user feedback loop alone was worth the effort."

These are great.  If you have others I would love to hear them.

Is there an inverse relationship between the ferocity of the excuses and the level of response?

In any case, the real issue is how do you measure response to determine true marketing ROI and ROMI?  Is it just those that responded or was there a brand value for those that saw the ad, were moved by the ad, but just didn’t respond through texting?  It’s all these effects that we need to measure and at some point correlate to sales.  Then the excuses can turn into, “it’s the early days, but we did increase revenue by 14% and we can prove it…”

Let me know if you have some great excuses.  I know I’ve heard them all, but that was when I was just trying to get a date….

Measuring direct and indirect effects comes to the web

Comscore recently announced a new Internet metrics concept called View-Through.  I’m sure I won’t do it justice in explaining it, but through cookies it measures the indirect visits generated by banner ads.  Quoting their own data, “For example, a substantial lift in visitation to the advertiser's Web sites can be observed in the weeks following an exposure to a display ad, even though click rates are less than 0.1 percent. Specifically, there was a 65 percent increase in lift in the week following the first ad exposure and a 46-percent increase over the four weeks following the first exposure, underscoring the latent branding effect.”  In addition, search traffic is enhanced and now finally measured based on the placement of a banner ad.

This is now finally getting to measure the complete impact of web marketing.  The measurement of Marketing ROI for web marketing is now close at hand.   Now we need to add the impact (direct and indirect) of traditional marketing and we will finally have the true marketing impact across the entire marketing mix.

The article can be found at:  ComScore Weighs In On View-Through Proof.

Let me know what you think.  I would love to know.