Category Archives: Special Series

SPECIAL SERIES-Post #5: Mastering Metrics

This is the fifth and final of a “back to basics” review series of the marketing process.  For series introduction, see 4/5 post.

We’ve often posted that being able to analyze and measure the effectiveness of a marketing program is critical.  We’ve also noted that industry experts say that about half of all advertising dollars spent is wasted:  the key is knowing which half (few do).  So, how do you know what works?

With most marketers today understandably concerned about keeping their jobs or clients, they may be loathe to actually find proof  their programs don’t work or have a negative ROI.  Yet knowing how to present metrics masterfully in this climate of fear can work to great competitive advantage. 

Every market researcher knows that it is not the actual study findings that count but how you present the numbers.  Statistics can be interpreted in numerous ways, and research firms are sure to present theirs in a manner that at least shows there is opportunity out there for their clients.  Or, at least they suggest a follow-up study to ensure they will be rehired…

There is also now the element of social media, where readily-available stats for websites, blogs and tweets are daily reminders of  direction.  Importantly, clients can easily access those too, so marketers are no longer the lone gatekeepers of metrics.  

In fact, the new social media metrics are a world unto themselves, with new lingo such as buzz rate (see post below re ambush marketing which beautifully illustrates this.  We’ll address the new social media metrics in a later post.  Remember:  this is a “back-to-basic” series…)

We’re also not going to address complicated econometrics and regression analyses here.  Leave those for the academicians or those pesky auditors.  

Then, there are clever analysis programs that come under the umbrella of  the “path to purchase” where each stage of the sales-actualization process is measured independently.  Good stuff for the big packaged goods guys, as many of the smaller marketers don’t have the time or tools to do this effectively.

Instead, below are some planning tools, plus analyses and metrics that  anyone can use to determine whether a marketing plan is delivering anything:

  • COST-PER-INCH ANALYSIS.  Perhaps one of our very favorites and a standard at PR agencies, it involves the counting of  total inches or minutes your product/company received in “free” publicity from press releases, feature stories, PSAs etc. sent distributed by you.  That is then coverted to actual dollars (based on the media’s highest card rate) to arrive at the savings from not actually buying that media.  Or, how we prefer to present it:  the value added to the program.  Works best if your program has no advertising component…
  • TOTAL IMPRESSIONS.  This is another one used often by PR agencies involving the addition of the total circulation, times the projected bonus readership (i.e. most  publications have what is termed “pass-along” readership).  Often marketers will call this IMPACT, using the standard equation of:  REACH + FREQUENCY = IMPACT.  This is one that only works with specific benchmarks (i.e.  you increase your goals each year).
  • COST PER STORE.  We kinda like this one if we are doing multi-store or chain programs where we can look at the store traffic count (# customers) and evaluate what it cost to post the POP, stage the demos or the promotional event. etc.   Dividing the cost of your marketing effort by the total store or traffic count can help determine which chains/stores deliver the best ROI.
  • CPU/CPM.  Standard measurement of media, the cost-per-unit  or cost-per-thousand (broadcast rate) is typically measured against sales gained via that media.  The goal is to show you spent mere cents or fractions thereof reaching your target audience. (the “which half of the ad dollars is wasted?” quandary…)  This is  traditional mass media measurement, slowing going by the wayside in the wake of social media…
  • COST PER CUSTOMER.  This is a common tool used by sales management, where the cost of servicing the customer via visits, phone calls, baseball tickets, etc.  is pitted against sales to him/her.  Then, typically strategies whether to up-sell, maintain or “divest” the customer are made. (The figure varies but most companies peg the average B2B sales call today at $500+).  Sales being a component of marketing, savvy marketers need to handle this delicately with the sales managers…
  • ACV.  We wrote about this recently:  how knowing the all-commodity volume of the market and chains you are targeting  makes clear sense before making a marketing investment.  Lots have been spent on only few,  just like some salespeople spend way too much time trying to sell widgets in Montana…(check out the state’s ACV.) Again, the key here is ensuring your efforts are in line with the potential of the market.
  • BDI/CDI.  Another potential-measurement tool is the Brand Development Index vs. Category Development Index.  This is a more complex matrix exercise where you plot, using sales data, the position of your product’s total category sales (all competitors, including you)  in the marketplace vs. your own product’s sales (your brand).  The resulting matrix illustrates whether the category is saturated or whether there is hope for your brand to grow.  More complicated, and deserves its own post, but suffice it to say that marketers should know about these tools even if they never (or pray they never) get to use them.

We hope you have found this small series of five posts helpful. (Selfishly, they will be part of a book by your blogger some time…time permitting)   Let us know if you would like some more of these series in the future and which topics are of special interest!

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SPECIAL SERIES-Post #2: Aceing ACV

This is the second of a “back to basics” review series  of the marketing process.  For series introduction, see 4/5 post

Now that your multi-element marketing plan is in place, you need to take it on the road.  The question is: where to?  

Allocating marketing dollars is one equation everyone struggles with at some point.  As one famous ad man quipped:  “Half of all advertising spending is wasted.  The key is knowing which half.”

We were gratified for the recent opinion of a blogmaster (those who write these for a living:  the easy life!) that echoed what we wrote about on 11/11 and then again on 3/10 about…fishing.  Daniel Scocco (daniel@dailyblogtips.com) guest-posted on Copyblogger, and we paraphrase that here because it is worth repeating…ad nauseum:

Go where the fish are!

What is the most important factor you need to have if you want to go fishing?
Most people will say the fishing rod. Others will say the bait, or a boat. Interestingly enough, they are all wrong.  The most important element of the equation is the presence of lots of fish.  If you have a lake full of fish but don’t have a fishing rod or bait, you can probably still improvise something that would let you enjoy a fish dinner tonight.  But no matter how great your bait or how cutting-edge your equipment, if there aren’t any fish, there’s no fish dinner…That means…[you need to] target known customers willing to spend money.

 

Remember that we wrote about on 3/10 how ACV — all-commodity volume — is the retail segment keystone because it measures actual sales activity, not just population.  When you target a market with high ACV, you simply have a larger number to bite your bait.  After all, 1% of  millions is something.
 
 Yet there are times when marketers want to go to smaller ponds.  Fact is, high-ACV (“A” markets) such as Los Angeles, Chicago etc, are expensive.  Media costs and, in fact, costs to implement promotional programs there are typically much higher than in B or C markets.
If your budget does not allow this, or if you have a very specific product niche, then focusing on a smaller market makes sense.  But here the key is to know the specific demographic of your target to ensure no wasted dollars.
We urge you to invest in market research (primary and secondary), scanner data and psychographic studies that tell you all about your target.
Segmenting the market is the key to success today, and one that giants like Unilever have down pat with their excellent studies on ethnic and generational groups.  Then, you can tailor your message accordingly.
In short,  if you want to be a successful fisherman today, you’ve got to ace ACV.
NEXT WEEK:   The retailer’s angle…

SPECIAL SERIES: Back to basics

Over the past several months we’ve noted that our posts that “remind” readers of the basics aspects of good marketing get the most views.   We also see in the stats these are referred to repeatedly over time.

It’s not that readers don’t appreciate the newer stuff, such as our unique marketer’s angle on current events (such as the tanking of Tiger Woods), or even our willingness to sometimes sacrifice sacred cows (like last week’s view on the PTI).   

Yet our more loyal readers say they appreciate most the “oldies but goodies”, or reminders of some of the marketing basics they learned in school, but so often forget to employ.  Or, strategies and tactics they don’t want to admit are no longer sexy (in this new era of sexting…) even though they still work.

 Well, we are listening, and are launching this short series of posts once a week over the next few weeks that will hopefully serve as a refresher.  Our goal is to remind us that there are benchmarks and guidelines that should be followed for any marketing plan, even post-Twitter ones.  (Yes, Gen Y’ers, this is for you, too!)

We are also inviting some of our regular contributors and other marketing mavens to share their insights into what still works and what no longer flies via guest posts or comments.  Importantly, we will try to keep these short & sweet.

Check back next week for our first real post on this short special series!