Marketing Insights

If “Always Be Closing” is the mantra for sales professionals, then “Always Be Testing” should be the mantra for marketers. Best practice guidance is a great place to get started; but, there is no substitute for understanding your own audience, your own brand, and the right tactics to most effectively engage your customers.

Regular, disciplined testing strategies are critical to transitioning to a results-driven marketing culture. Unfortunately, starting out with testing can seem about as daunting as starting a new exercise routine. Its too hard. I need a Personal Mathematician to really figure it out. We don’t have enough time – we just need to get campaigns out the door.

Well, I am here to tell you that it is time to get in shape – no more excuses. When budgets are tight and resources stretched – now is the time to get serious about optimization testing. Anne Holland (Founder and Former President of Marketing Sherpa and now behind Which Test Won?) shows us that the conversion rate of a typical campaign landing page can be increased up to 40% (on average) with a few well-designed tests.

Get started with a simple split test. Testing should always answer specific questions. For example: Are we asking for too much information on this form? Which email layout drives the highest conversion? Would I get a higher webinar attendance rate if I shortened my promotional timeframe?

Which image drove a landing page conversion of 48%?

4 Elements Worth Testing

- Email From Lines: One client that I was working with saw a 36% increase in open rates by simply adding the company brand name to the from line of their communications.

- Layouts: Layouts should effectively guide our eyes whether it is an online or offline asset. Simple layout changes or location of images help us take the right actions. And, do not let your layouts get stale – variation keeps people engaged.

- Imagery: Images are the visual cues that tell us to pay attention to the content. The important thing to consider is – are the images emotionally supporting the value proposition or just there for the sake of design? Check out this free resource Fivesecondtest.com.

- Timing: Many clients are experimenting with time as elements in their campaign. Try decreasing the frequency between touches on a nurturing program. Add urgency to a promotion with an “offer ends” or “limited availability”. One software vendor decreased their Free Trial from 30 Days to 5 and saw product purchases increase by 28%.

Make It Count

Testing shouldn’t be for the sake of testing – it should be about improving results. Determine the metrics that will clearly indicate the success or failure of elements being tested. Be sure to look at both short-term conversion metrics as well as the bottom line to gain deeper insights into performance.

And, testing shouldn’t be seen as a “one-time” event – adopt it into your every-day campaign methodology. People change, online behavior is evolving, and new ideas will continue to emerge across your team. With a testing strategy in place – no idea is a bad idea if its effectiveness can be proven!

What has your team learned from optimization testing? What will you focus on learning in the second half of 2009?

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Doing the same thing over and over and expecting a different result is the definition of insanity. Ever heard that saying?  Well, I can’t tell you how many marketers when asked, “What results have you received?” They answer with, I don’t know or I can’t track or report properly.

So if you execute marketing programs and do not know what to expect, but keep executing, are you insane?  No, not necessarily.  Before marketing automation, my day-to-day professional life was the definition of insanity.  Every day I repeated the same actions and expected a different result…or at least hoped for a different result.   I expected my funnel to improve, but had no ability to measure the results.

Once I implemented marketing automation I had the ability to measure results. From there I was able to make sure I didn’t spend my time executing programs that didn’t make sense.  We figured out what worked and what didn’t work based on lead source tracking from inquiry to opportunity close.  We created personas and marketed to them based on tracking activities and behavioral criteria.  We did more of the things that worked and less of what didn’t…therefore we were more efficient and effective.

Insanity no more!

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The Search Engine Marketing Professionals Organization (SEMPO) recently reported that spending on search engine marketing (SEM) in North America is expected to hit $26 billion by 2013.  And the majority of respondents (70%) said they are trying to generate leads for direct or indirect sales models.

The analysis indicates on MarketingCharts.com however, the only metrics marketers are using include: increased traffic, conversion rates, click-through rates.  In addition to these metrics, you should also track “net new” web visitors, known vs. unknown visitors and form abandonment rates.

But what do these metrics tell you? What should you focus on improving? With any metric, there should be an action based on the result. What are these actions?

• Increased traffic
  Track volume spikes or peaks to your landing page or website based on when campaigns are launched and overall trend on an ongoing basis.
• Conversion rates
  For web metrics conversion rates we typically track form submission from suspect to inquiry, however, you should also track conversion rates from other stages of the lead funnel – we need to understand which key words bring in the closed deals vs. which bring in researchers.
• Click-through rates
  It’s important to understand the increase traffic number and then one level deeper is the click-through rate, how many people clicked on an email or a web link to then get to your landing page or website. This tells you how many people raised their hand to your offer. So it’s a metric that helps you understand if your message was relevant to the audience.
• “Net new” web visitors
  Having increased web traffic is one thing, but are you bringing in “net new” web visitors from your campaigns? This metric needs to help you understand if you are bringing in leads at the top of the funnel or helping you convert leads already in the funnel.
• Form abandonment rate
  This metric helps you track how many clicks convert to prospects and how many prospects are not completing the form. This helps you decide whether you need to re-think your form (how many questions are you asking), do you have too much friction? Does your offer not resonate? Or perhaps your key word is not relevant to the offer?

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And, to conclude our series: Myth #4 – Analyzing campaign and marketing ROI is not worth the effort required. Reality check – any metrics that provide you actionable insight to improve performance is worth it.

Remember, you are looking for trend points to make educated bets on campaign optimization. Ultimately, the demand generation team that can demonstrate and confidently predict, in terms of revenue, what happens when they spend a single marketing dollar earns the right to ask for increased budgets and resources. Data points actually give you the confidence to try new campaign approaches, test messaging, and focus on ways to sustain and build long-term relationships.

Automation and systems integration can sure make the entire process less time consuming and may even increase accuracy. These elements, however, are certainly not required. As long as your lead capture systems are getting what you need to report on in the front end – then you can always export the pipeline data from your CRM systems and, with your sales team, tie the data points together – it just takes more time and effort. Once your process is documented and in place, automation and integration can really help to facilitate time to results. And, integration between sales and marketing systems helps facilitate building detailed reports and dashboards that both organizations can believe in.

All metrics need to be considered within the larger context. Your marketing ROI should facilitate the right set of conversations around what is working, what is not, so that you can make identify what to test and optimize. And, once you have a baseline of performance metrics over a period of time, then you can set goals to decrease cost per conversion and increase conversion ratios to realize year over year improvement in marketing campaign performance.

Get started today. Clearly benchmark what your campaign conversion ratios look like on average. You will need to define “conversion” for your organization and the types of campaigns you are running. But, define it nonetheless and document what your baseline is today. Next, benchmark where you are in terms of ability to influence revenue. How you define “influence” will be largely determined by that attribution method that you have adopted. And, if you do not know what the total influence really is – your benchmark today is 0%. The good news – it should be easy to improve upon if you can get your measruement definitions and processes in place! Then, as you adopt more sophisticated campaigning techniques – you can start to really deomonstrate marketing effectiveness improvement. Wouldn’t you like to show trend lines like the following image?

Demonstrating Marketing Effectiveness Improvement

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OK – I hope you are still with me. We tackled that Cost Per Name does not tell the whole story. We’ve identified a Campaign Revenue Attribution method that makes sense for our own organization. Now, let’s knock down one of the most common myths of all.

Myth #3 – The data will provide us with a “perfect path” of events required to convert a customer. Reality Check – The Magical Dashboard DOES NOT Exist.

If this were X-Files, I would be Scully on this one. Stop your quest for a magical dashboard that unveils the perfect sequence of events, universal temperature, dash of salt required to generate predictable revenue. The reality is that the perfect path will be unique by your individual buyers.

What we can do is analyze trends from direct revenue and influenced revenue models to better understand which campaigns work better and when – and then to optimize by improving over baseline performance. This requires us to get black and white in our reporting so that trends can be identified. At the same time, getting black and white does not mean evaluating one campaign and making long-term decisions based on performance off of that one data point – context is always required.

For example, your organization invests in an expensive tradeshow but no immediate sales opportunities result from participation, does that indicate that you should cancel all tradeshows for the rest of the year? Maybe. Maybe not. What it means is that you need to evaluate that event within the context of prior tradeshow performance as well as other campaign types, to understand what was going on. Was it this particular show (i.e. attendance was poor, bad booth location, etc.)? Was it how we prepared for the show (i.e. did we forget send out the invitation to our customers with enough notice, etc.)? Or, maybe it is in exact alignment with the past 4 shows we have done and therefore the discussion becomes how much of the total marketing mix we willing to allocate for next year. Perhaps we do fewer tradeshows and better use our resources elsewhere.

Getting black and white helps you to trend and compare the data so that you can have the right discussion on which campaigns are having the greatest impact on revenue and how that affects planning moving forward.

And to conclude our series, Myth #4: Analyzing marketing ROI is not worth the effort required.

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Yesterday, in our series on Marketing ROI, we looked at Myth #1 – Cost per name is enough for measuring marketing effectiveness. The reality is a single metric does not tell us the whole story. Today, let’s explore different campaign revenue attribution methods so that you can better begin to look at the bigger picture.

Myth #2 – Long-term ROI analysis is better/worse than the short-term ROI analysis. Reality Check – Campaign revenue attribution methods will always be flawed no matter which method you adopt. The key is to pick your methods, be consistent, add complexity as you learn from your data analysis.

Even if you have the most automated system in the world, it still is never going to be 100% perfect. No campaign revenue attribution method can perfectly account for the role brand awareness, customer referrals, sales efficiencies, impact the likelihood that your buyer will purchase from you. And, what about that rogue sales rep who never associates a primary contact (and therefore campaign history) to all of her bluebird opportunities that keep coming in? The goal is to pick a method that you can actually adopt and make decisions from. In many cases a short-term analysis and a long-term analysis perspective is helpful for different reasons. And remember, we are looking for trends. Short-term trends help us make immediate tactical choices in optimizing campaign assets, etc. Long-term trends help us to strategically plan and demonstrate a broader sphere of influence.

First, start with the end in mind – where and how do you want to report on campaign performance? Next, pick a revenue attribution method that makes sense for your organization in terms of your analytics maturity, the technology and resources you have access to, and your sales and marketing processes. Now, stick with it. Be consistent for a period long enough to identify short-term trends, test, and optimize campaigns over baseline performance. If you currently do not know what your impact on revenue is today – you may be starting with a baseline of 0. Some methods to evaluate:

100% Most Recent Campaign – A simple model may look like 100% forecasted revenue attributed to the campaign that caused the buying cycle. In a CRM system like Salesforce.com – this would be called Opportunity Source and it would reflect the most recent campaign of the primary contact associated to the opportunity. If you want to leverage out-of-the-box ROI reporting and dashboards in a system like SFDC.com – this model may make most sense for you. 

%Split Across Original/Most Recent – Other CRM systems may support a simple splitting of revenue attribution across more than one campaign tied to the primary contact mapped to the opportunity. This may make more sense based on functionality supported by your CRM and the length of your sales cycle.

Equal Attribution Across All Campaigns – One way to gauge total influence on revenue is to equally weight revenue across all campaigns of contacts mapped to the opportunity. 

Complex Weighting By Campaign Type – After short-term trends are proven out and validated, you may choose to advance to a more complex weighting of revenue attribution based on Campaign Type to demonstrate total influence. For example, a Web Resource Center visit participation gets 5% of the credit, where an in-person tradeshow meeting gets 25%, etc.

Long-Term Marketing Influence – Long-term ROI metrics can be leveraged in conjunction with short-term ROI models to better understand less tangible aspects of marketing effectiveness and overall influence.

Which methods make sense for your organization? Are you doing something different? What process and technology changes will you need to account for to adopt new methods?

Tomorrow…Myth #3: The data will provide us with a “perfect path” of events required to convert a customer.

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Not enough marketers are measuring ROI. ROI – the term I hate to love. I LOVE it – because it is essential to improving campaign performance. I HATE to love it – because it is hard. So hard, in fact, we have a gazillion ways to refer to it: marketing ROI, short-term ROMI, long-term ROMI, closed-loop reporting, marketing effectiveness measurement, direct revenue impact, influenced revenue, etc.

Call it whatever you want – you need a way to tie revenue impact to your campaigns (across marketing-initiated campaigns, sales-initiated prospecting campaigns, partner-driven campaigns, etc.). And, let’s be clear – you don’t need it just so you can prove your worth as an employee to your organization. You need it so that you can trend, compare, and optimize your campaign performance in the short term and better plan for the long term. This is about trend over baseline metrics to make educated decisions on resources and spend – not who “gets the credit”.

I have to slightly disagree with David Meerman Scott and his position in Why marketing ROI measures LEAD TO FAILURE. Mr. Scott believes executives hide behind ROI and “play it safe” and I have certainly seen that attitude take hold. On the other hand, a world with no measurement of marketing effectiveness leads to a failure in demonstrating value to the business. I believe that ROI measurement should foster conversations and inspire improvement as well as risk-taking. And, certainly “return” and “investment” may need to be examined within context of the campaign objective.

If you do not have any ROI reporting in place today – I want you to stop what you are doing and make it your next quarterly focus to get it in place. I don’t care if you think it is too difficult of a task. If you do have ROI reporting in place – I want you to consider how you leverage that information to improve your communication mix. Perhaps, you are ready to take your revenue attribution model to the next level of sophistication.

This is the intro to a 4-part series on debunking the myths that I see preventing many marketers from tackling ROI reporting at all – or at the other end of the spectrum – aren’t using the ROI data points to make relevant decisions.

Myth #1 - You can only control leads into the funnel so cost per name and cost per inquiry is enough. Reality Check – One conversion metric cannot tell the whole story.

If cost per name were the only metric that mattered then you could hand our sales team a phone book and call it a day. Or, maybe you just advertise on the cheapest keywords possible. Looking at the economics of each conversion milestone of your lead funnel will help you to understand what triggers you can pull to impact specific stages of the sales pipeline. This way you can adjust volume into the funnel AND impact the velocity through the funnel as well. For a more transactional sales process, you still need to evaluate beyond cost per inquiry and look at the attribution from a lifetime customer value perspective.

An example – Omniture recently talked about their own offer testing where the “Complimentary Guide” converted 42% more inquires over the “Online Webinar”. But, the Webinar converted 155% more sales-ready opportunities from the inquiries over the Guide. Getting “beyond the lead” metrics is critical to really understanding marketing effectiveness.

Tomorrow we will tackle one of my favorite discussions. Myth #2: Long-term ROI analysis is better/worse than the short-term ROI analysis.

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