Maximizing Marketing ROI in 2016!

A plethora of advice exists about how to maximize your marketing ROI, so it might be helpful to review a few ideas, based solely on my own experience with planning and designing marketing campaigns. These are real world lessons that I wish I knew before embarking on each of the several marketing exercise in the past.

1. Allow for creative testing for all your campaigns. There is no one-size-fits-all anymore, and we need to understand that testing and campaign messaging needs time. Make sure to plan for time and budgets to accommodate these variables. Outline what products you want to focus on, what customer base you want to target, what are their buying behaviors, what are the industry changes influencing those behaviors, resources that you will need to gather and analyze data, etc. 
2. Understand uniqueness in your customer base. All customers are not alike and all don’t see your products the way you do. Run surveys, understand customer demographics, decipher their purchase tendencies from research or past campaign results, segment the customers based on their product liking, relevance and ability to purchase, identify product categories to target to specific segments, etc. You get the idea – segment the customers based on their propensity and ability to buy and ROI of your campaigns will automatically get better.
3. Define your product categories and seasonality. There are different product features that appeal to different customer segments. In addition, there is seasonality of when customers tend to purchase products and how much do they spend on it. Make sure to account for this analysis in your planning cycle to ensure that these products and customer segments are adequately aligned. You may even get a head start on this analysis by looking at any current data that you may have gathered from previous campaigns. However, don’t forget to take into account any new products and customer segments that may be called for as you go through the year. 
4. Plan simultaneous campaigns through your marketing channels. Establishing multiple simultaneous touch-points with your customers usually results in greater exposure and better conversion, if product adoption is the primary goal. Here I am referring to a multi-channel approach through DM, email, social media and other avenues of reaching your customers. This will require a well thought out marketing plan, with an emphasis on consistent messaging, product positioning, seasonality and customer segmentation (refer my post on the topic here). Expect to see 5% to 15% better results, as I saw in my tests.
5. Monitor customer quality from the promotions. Goes without saying, yet we don’t allow for quality monitoring in our planning. Customers acquired through the due diligence as discussed above are likely to be highly valuable. However, plan your processes and resources to allow for adequate data gathering, analysis and monitoring of customer quality. Are the customers loyal to product, brand, offer, other? Define metrics to measure customer engagement with your product and brand, which will be a good indicator of the success of your campaigns and drive up your ROI.
6. Invest in marketing infrastructure and talent. Most organizations stumble on this one. We may believe we have all it takes, but without the right process and infrastructure to support your marketing efforts, none of the tricks discussed thus far in this series are going to be effective. We marketers need data gathering and processing capabilities to collate results from tests, campaigns, etc., to define and implement our next steps. Most organizations are ill-equipped to handle multi-channel data and lack the talent to make sense out of it. Invest now or plan for it, so you are building up to this capability and preparing yourself for success in the years to come. 
7. Always question “what worked last time” theories. This could be a tricky one. In some cases past performance may be an indicator of future success, but given the variability in our products and customers, we ought to continuously test and re-learn. The tricks above are geared towards better targeting and segmentation, which renders each effort rather unique and requires careful reporting such that we define campaigns and success based on relevant parameters. The take-away is that, don’t take a short cut and compromise on research-and-learn simply because we may have results from the past tests/campaigns and we could save time/money on the next one. Build your plans and budgets now to allow for the continuous learning cycle – your marketing ROI depends on it, so should you.

Hope the above helps in a better marketing management and calendar that suits the "continuous learning" in our highly competitive marketplaces. 

Improving ROI of Direct Mail Marketing

If your business relies on direct mail (DM) as one of the acquisition vehicles, you are probably in the perpetual cycle of justifying its ROI. DM (postcards, letters, etc.) is not cheap and with all the junk that a typical household receives through the mailbox, it is challenging to expect any better. The piece of paper in hand, however, still gets some attention, if/when the reader can actually “separate the wheat from the chaff.” Nothing we can do about it, right? 

May be, in the times gone by; we now have a plethora of communication vehicles available to connect with our customers. Can we employ a few of these vehicles to influence reader behavior, such that we get an extra second or an extra eyeball on our direct mailers? The answer is yes, it does help!

I recently employed a time-managed campaign strategy to assess the impact of DM ROI, where the mail drops were followed by an email campaign to the customers. The idea was to send a reminder to DM recipients to re-look and/or re-assess their decision about the DM sent earlier. The chart below shows how the daily order volume spiked around the email timings. 

The three spikes (circled in red) represent the 3 batches of DM drops. On a closer look, what is interesting is the fact that the spike is ~3 times the average volume pre-campaign, while a typical DM-ONLY campaign yielded only about twice the lift in order volume. The next bump (circled in green) is when a reminder email was sent about a week after the first email. This got some of the “lazies” to act and respond to the offer. Much better overall ROI, for the time spent in pre-campaign planning. Such analytics based campaign tactics can help gain a little extra mileage out of our marketing dollars, something we can all rally behind.

5 Keys to Increasing Marketing ROI

With the new year in sight, one of the pressing issues for managers is how to improve upon the marketing successes in 2011.  While acquiring new customers is an obvious growth strategy, marketers must also use analytics to unlock the real secrets behind marketing success. After all, your marketing dollars should stretch well beyond customer acquisition.

Often companies will focus on “net adds” as a success indicator, and fail to recognize the revenue growth potential by meeting the needs of their existing customers. I am not saying it is by design, but top-line growth is “sexier” to the management, and extracting that incremental dollar out of your existing customers needs a bit more work than designing a catchy marketing campaign – right analytics focus can help solve for the latter. The following 5 steps seem to have worked in my experience.

• Know your customers – demographics, location, spending habits, targeted wallet share, etc.
• Identify and create a portfolio of products that aligns with your customers’ needs and extends your brand beyond core product(s)
• Build relevant external partnerships to extend your products beyond the core competencies
• Target the products offerings to specific customer segments and avoid the “one-size-fits-all” approach to selling  
• Lastly don’t forget to utilize all the available customer touch points including, social forums, newsletters, email and others

These steps need to be repeated periodically to capture any changes in market, customer needs, etc. But, the key is to consistently evaluate (say, during quarterly reviews) your portfolio strategy on all of the above drivers and refine as needed.

Remember, it is much cheaper to manage a customer than acquire a new one!

Higher marketing ROI with traffic source contribution

Users find multiple ways to come to our website and represent different interests. But if we are treating them equally, then we are doing ourselves a disservice by not capturing the optimum value of each of our traffic sources. I have talked about targeted landing page experience, in this blog, for traffic from search, navigation, etc., as a means to improving stickiness and engagement. However, to please our finance folks, we also need to assign a value – an ROI or contribution (revenue/visit) – to each of these traffic sources to fully understand the potential and impact of our site improvement efforts.

As an example, one of my projects was to understand the contribution value of traffic from each of our traffic sources. The biggest hurdle to achieving this objective was the fact that we did not have any tracking to follow the user from the time it entered the experience to the time it left the experience. Depending on the size and scope of your web traffic, it could be a daunting task to collect that kind of data. However, if we tag each campaign appropriately, we can come fairly close to isolating the path. Of course the analytics software we employ will be crucial to achieving the goal (we were using Omniture and an in-house tracking solution to marry traffic and revenue data and build the user path).

Once we are able to follow the user through our site, we measured the revenue points in the path and aggregated to arrive at composite revenue/visit from a particular traffic source. Consumer centric tracking is one approach that may be useful (http://www.analyticsheaven.com/2010/04/tracking-make-it-customer-centric.html).

For instance; revenue/visit from content promotion was more dependent on user navigation and hence advertising revenue. However, search driven revenue/visit was driven more by user clicks to purchase and hence CPC revenue and/or Lead Gen revenue. We found wide variation, more than 100% between the low and high contribution values, among all our promotion vehicles. But, now we were able to employ targeting and relevant cross-sell/up-sell to grow revenue and contribution from each traffic source. Imagine the possibilities for your marketing ROI, if you were equipped with traffic source level contributions as you make decisions about where to promote, how much to spend, etc., on your campaigns. Listening to our customers and utilizing continuous feedback to update our content and products should help drive a favorable trend in traffic source contribution: http://www.analyticsheaven.com/2010/01/customer-is-always-right.html). This can be a competitive differentiator and a valuable tool in marketing portfolio planning.