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Marketing Metrics: Do your analytics capture the real reasons customers buy from you?

April 16th, 2013
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How can you track the most impactful elements of your marketing funnel? Let’s start with an analogy …

I once had a crush on a girl.  I talked to her every day, but she rarely took notice of my existence.  She liked the “bad boys,” and I was kind of a nerd.  It seemed as if the stars were aligned against us.

I tried asking sweetly, coming up with inventive date ideas, even appealing to her sense of pity, all to no avail.  Finally, after a year or so of trying, I wrote her a letter telling how I felt.  She finally accepted my invitation and we went on a date.

My takeaway from this exchange was letters work best. (Admittedly, my letters are particularly awesome.)

What I didn’t know was my letter had relatively little to do with her decision.  Years later, I asked her why she finally decided to go out with me.  She admitted my persistence played a role, but the bigger factor was how she had her heart broken by one of the afore-mentioned “bad boys,” and decided to give a nice guy a chance.

I was floored.  I had no idea these events had ever transpired, and more importantly, had vastly overestimated my letter writing ability.

What I had was essentially a last click attribution model. This is the way in which countless organizations currently measure conversions.  We, as an industry, have come a long way in terms of being excited about measuring and testing our marketing efforts.

However, looking at the last click before conversion as a sole contributor to the conversion decision is as near-sighted as assuming the young lady accepted my date invitation based upon my letter writing skills.  The letter was a factor, but it wasn’t the only factor.

I need a better model.

 

Where should I spend my marketing dollars?

Using the last click attribution method, I can determine the value of a conversion generated from an email campaign.  I might arrive at the conclusion my marketing dollars are best spent on building email lists and optimizing email campaigns.

While there may be truth in that statement, it’s only partially correct.  The real story in this scenario might be a customer first interacted with my brand when a friend shared a product review on Facebook.  From there, a likely scenario of events could be:

  • The customer visited and liked my Facebook page, and then left.
  • Weeks later, I launched a new product via Facebook post.  The customer saw the post and then left the platform to do some research.
  • While researching the new product on Google, a PPC ad appeared and convinced the customer to click through to my site.
  • Once on the website, the customer joined my email list.
  • Two weeks later, I sent an email which the customer subsequently viewed and converted, purchasing my product.

From this example, it’s obvious the customer was nurtured to conversion through a series of interactions including social media, PPC, landing pages and email.  Now, how much of my marketing dollars should go to each channel, since in this case, they were all obviously necessary for conversion?

 

Attribution models

Solving this problem requires the use of a different attribution model, and not all attribution models are created equal. I remember how happy I was when I learned there were multiple varieties of steak.  I had always eaten sirloin, because that’s what my dad always cooked.  So, you can imagine my excitement the first time I tasted filet mignon!

Similarly, there are a wide variety of attribution models to suit everyone’s taste.

One example is the linear ratio model, which is a dynamic model that attributes different values to different purchase and research phases. For instance, it might:

  • Attribute 5% of revenue to Facebook for the research and awareness piece of our sample transaction above.
  • Assign 25% of that revenue to PPC ads.
  • Finish by assigning 70% of the attribution to the email campaign that caused the click.

There are many  implications to using a model such as this. The social media manager is very happy because he just went from being a nonexistent entity in this conversion to owning 5% of the revenue.

The email manager might not be quite as happy, but the marketing executive should be thrilled.

There are many more models to experiment with. First-click, U-shaped, custom models and linear modeling are just a few. We’re getting closer to really understanding why people buy our stuff, and how they arrive on our pages.

Moreover, we’ve attributed our revenue to particular interactions along the funnel, which should get us started in the process of assigning value to each marketing activity we undertake.

To learn more about each of the above attribution models, see Google Analytics’ definitions here.

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Marketing Data: Using predictive analytics to make sense of big data

December 21st, 2012
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One buzz word/phrase that became very popular in business circles this year was “big data.” And, even though the term is trendy and probably overused, the overall concept has major implications for marketers.

Marketers are awash in campaign data, more so now than ever before. Email marketing campaigns produce data about open rates, clickthroughs, unsubcribes, and more. Visitor activity on company websites can be tracked, and in the case of registered users or leads flagged for scoring, that activity is not only tracked but also attributed to a particular individual.

Elements tracked can include the website visit itself and activities such as downloading Web content or watching embedded video. That tracking can get pretty granular, such as combining a series of website activities, or exactly where in an embedded video the viewer stopped the playback.

Taken as discrete pieces, all these data points are essentially meaningless. Taken together, they can provide insight into the tracked individual. Furthermore, subjected to deeper analysis, they can provide insight into what the most promising prospect or customer with the most long-term value looks like for the company.

This is where predictive analytics come into play. To provide more insight into predictive analytics and big data, I interviewed Omer Artun, CEO and founder of AgilOne, a cloud-based predictive marketing intelligence company. Omer also has an academic background in pattern recognition, data mining and complex systems.

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Marketing Research: Only 25% of marketers can show value to the organization

October 23rd, 2012
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Recently, I had the opportunity to speak with Julie Schwartz, Senior Vice President of Research and Thought Leadership at ITSMA (Information Technology Services Marketing Association), and Laura Patterson, President of VisionEdge Marketing. Both were involved in recent marketing research, 2012 ITSMA/VEM Marketing Performance Management Survey: The Path to Better Marketing Results.

The survey was conducted during the summer of 2012 via email and social media invitation through Twitter and LinkedIn, and included 405 completed surveys.

Here is a chart outlining details of the respondents:

 

Click to enlarge

 

All respondents were analyzed by company type, company size and by a self-grading system (grade results included, and note that “D” was the lowest possible grade):

  • A – Marketing demonstrates contribution to the business: 25%
  • B – Marketing makes a difference, but contribution is not measured (these marketers were considered “middle of the pack”): 33%
  • C and D – Marketing may have an impact, but not known if impact is material (these marketers were considered “laggards”): 33% for “C” and 9% for “D”

Click to enlarge

 

Here are the key takeaways from the research:

  • Marketing’s satisfaction with its ability to measure, analyze and improve performance is shockingly low
  • Marketers are caught in a downward spiral as they report past performance to continually prove the value of marketing
  • A few exceptional marketers have cracked the code; they excel across the board in data, metrics, processes, tools, analytical skills and reporting
  • These grade “A” marketers can clearly demonstrate their value and contribution to the business
  • The number of “A” marketers has remained relatively constant over time, but we see a decline in the number of “B” marketers

Because the heart of this research was marketing performance management, the self-described grades listed above were created by the key question: What grade would the C-suite give your marketing organization for its ability to demonstrate its value and impact on the business?

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Conversion Rate Optimization: Your peers’ top takeaways from Optimization Summit 2012

August 16th, 2012
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With B2B Summit 2012 right around the corner in Orlando, let’s take a quick look at your peers’ top takeaways from our last Summit – Optimization Summit 2012. In case you couldn’t be there, listen in to what fellow Web marketing directors and optimization managers learned at the Summit to help guide and prioritize your own A/B testing and landing page optimization efforts.

 


Here are some of the key takeaways. Feel free to use the links below to jump directly to these parts of the video …

0:34 – Celeste Parins of Mindvalley on value proposition

1:11 – Matt Silverstein of The Elevation Group on radical redesigns

1:40 – Matt Brutsche of Austin Search Marketing on getting into the mind of the customer

2:00 – Mike Weiss of Internet Sales Experts on understanding the customer’s path on your landing pages

2:42 – Ray Lam and Victoria Harben of the University of Denver on live optimization

3:03 – Suzette Kooyman of Enhance Your Net on taking a consumer-centric approach instead of a corporate approach

3:37 – Suzanne Axtell of O’Reilly Media on determining where to start testing and optimizing

4:10 – Reagan Miller of Financial Times on having a testing methodology

4:23 – Alan Markowitz of Ellie Mae on friction and anxiety points

4:50 – Diane Baker of netDirectMerchants on value proposition

 

Related Resources:

Optimization Summit 2012 Event Recap: 5 takeaways about test planning, executive buy-in and optimizing nonprofit marketing

Demand Generation: Optimization Summit 2012 wrap-up for B2B marketers

B2B Summit 2011: 5 takeaways on social media, lead generation, building a customer-centric approach, and more

Class Is In Session: Q&A with Web analytics professors about Optimization Summit 2012

August 14th, 2012
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You network with the most interesting people at a MarketingSherpa Summit, and Optimization Summit 2012 was no exception for me. I caught up with one of the top optimizers from Denmark and a nonprofit marketer heavily engaged in A/B testing, and I also met two professors in the increasingly popular Web analytics field.

With our next event, B2B Summit 2012 in Orlando, just around the corner, I wanted to take a moment to look back at our last event in today’s MarketingSherpa blog post and share an interview with those professors, who can provide a unique viewpoint on Internet marketing.

With their experience teaching others in the classroom and having to convey overall marketing principles, they are a step removed from the average in-the-trenches, brand-side marketers, overly focused on the “putting out today’s fire” crises that sap so many marketers’ attention.

And, since they’re not vendors of platform providers, well, they’re not trying to sell you on their unique marketing buzzword approach that just happens to map very nicely to the products and services they are trying to sell.

Ray Lam and Victoria Harben are adjunct faculty and teach Web Analytics, a graduate-level course in University College at the University of Denver. During Optimization Summit 2012, they live-tweeted the event to their students from @COMM4324.

 

MarketingSherpa: What were the top lessons you learned at Optimization Summit that you think could be helpful to brand-side marketers?

Victoria: The main point that was reiterated throughout Optimization Summit was to always test; don’t rely on assumptions, intuition, guesstimations, or theory — rather, get out there and test it. It’s always best to back up a hunch with data, and that’s exactly what the Summit instilled in me: test, test, test! We’re teaching a Web Analytics class at DU through the New Media and Internet Marketing program, and this is the first thing we tell our students.

Ray:  The top lesson I learned was Dr. Flint McGlaughlin’s conversion formula: C=4m+3v+2(i-f)-2a. Where m=motivation, v=clarity of value proposition (why), i=incentive to take action, f=friction elements of the process, and a=anxiety about entering the process. This simple formula helps marketers think about the different elements that need to be considered when constructing a landing page.

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A/B Testing: Why don’t companies track ROI of testing and optimization programs?

June 26th, 2012
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During our second annual MarketingSherpa and Marketing Experiments Optimization Summit 2012 two weeks ago in Denver, Dr. Flint McGlaughlin, Managing Director, MECLABS (the parent company of MarketingSherpa), presented some interesting data points on brand-new MECLABS research conducted by Meghan Lockwood, Senior Research Analyst, MECLABS, for the upcoming MarketingSherpa Website Optimization Benchmark Report.

I live blogged this material for MarketingExperiments, but I thought the research was worth sharing with our SherpaBlog readers as well.

One data point from this research from our Website Optimization Survey, which will be presented in an upcoming benchmark report, really stood out to me:

Click to enlarge

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How to Write a Competitive Analysis (with 3 free templates)

May 18th, 2012
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“It’s not enough that we win; all others must lose.” – Larry Ellison

Personally, I disagree with Larry, and I think that the focus should be on the customer winning. Hopefully that’s often through your product or service offering, but sometimes your competitors can serve customers looking for a solution better than you can. In those cases, I think all parties (your company, your competitor and your customer) are better served by acknowledging that.

In fairness, Larry Ellison is the fifth richest man in the world, so if that’s how you keep score, he has much more credibility than I. On the other hand, he was paraphrasing Genghis Khan with his quote, so I guess it all depends whom you want to emulate with your marketing.

Learning from the competition

But, whether you agree with Larry or me (or even Genghis), I’m sure that we can all see the value in better understanding what competitors are doing.

So you can conduct a competitive analysis for the obvious reasons — to bludgeon the competition and raze their villages. However, you can also conduct a competitive analysis to help you better communicate with your customers about how you can best serve them (and even tell them what you can’t do) while perhaps honing the fine art of “coopetition.”

Moreover, a competitive analysis is an especially helpful tool to help you craft your value proposition.

Free competitive analysis templates

To help you conduct a competitive analysis, we’ve created a few free templates loosely based on the Summary Competitive Analyses we conduct for our own Research Partners here at MECLABS.
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Marketing Analytics: Why you need to hire an analyst

March 6th, 2012
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A steady diet of fresh data helps marketing teams invest wisely and reach the right person, with the right offer, at the right time. It’s almost like food for your strategy, giving it strength.

But like food, data needs skilled hands to process it. You cannot pull a potato out of the ground and call it dinner, and you cannot track unique visitors and call it marketing.

You need a data chef, better known as an analyst. This person will help you take the unprocessed fields of grain in your database and turn them into Fettuccini Alfredo. Big companies have been doing this for years.

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Marketing Metrics: Is the emphasis on ROI actually hurting Marketing?

October 21st, 2011
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In speaking with many, many marketers over the past year, two words — well, actually one word and one acronym — stand out in my mental word cloud when thinking about marketing in 2011: revenue and ROI (return on investment).

The first is a term more commonly seen in financial reports and tossed around the conference table during company meetings. The second is another financial term.

And I’m not just dreaming that these words have infiltrated marketing. Research from the 2012 B2B Marketing Benchmark Report found that 54% of surveyed marketers think “achieving or increasing measurable ROI from lead generation programs” is a top strategic priority for 2012.

Click to enlarge

I know I’ve written about Marketing proving its worth within the company in terms of revenue generation or measuring ROI more than once over the last year.

Menno Lijkendijk, Director Milestone Marketing, a Netherlands-based B2B marketing company, says the emphasis on ROI in marketing should be reexamined.

Menno’s main point is unimpeachable — return on investment is a financial term with a specific definition that has a very specific meaning to the C-suite in general, and particularly to the CFO. His concern is, not only is the actual ROI of some marketing activities overemphasized, the term itself is gathering too much marketing “buzz.”

He provided an example of a comment left on an online video of his that referenced “intangible ROI,” something he (rightly) says does not exist.

“There is no such thing as intangible ROI. The whole definition of ROI is that it should be tangible,” Menno says.

He continues, “This term — ROI — is now starting to lead a life of its own, and is being used by email service providers to explain to their potential customers that doing business with them will give them great ROI on their marketing investment.” Menno also mentions email providers are not alone in using this sales pitch and cited search marketers, social media markers and other agencies.

“There is more than just ROI, and the real value of marketing may require a different metric, or a different scorecard, than just the financial one,” he states.

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Evidence-based Marketing: This blog post will not solve your most pressing marketing challenges…yet

June 23rd, 2011
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Here at MECLABS, we have a pretty singular focus – to help you optimize your sales and marketing funnel. Or as I like to say in every email I write: Our job is to help you do your job better.

But, as Tom Cruise said to Katie Holmes (or maybe it was Cuba Gooding, Jr.), “Help me, help you.”

So evidence-based marketers, on what topic do you need more evidence? Evidence to help you understand what your peers are doing. Evidence to help you understand what really works. Evidence to do a little internal marketing to your business leaders (or for the agency folks out there, your clients)?

Below are a few key topics you’ve been telling us you want to learn more about. We’re trying to decide on the topic for our next MarketingSherpa Benchmark Report. In which topic should we invest 5 months of a research manager’s time digging into to discover the evidence you need.

Please take 7 seconds and rank them in order of importance in the poll below. Or if we missed a topic entirely, please tell us in the comments section below.

In no particular order, the nominees are…

  • Analytics – Using analytics and metrics to drive business decisions from which products to launch to which landing page works best to which content is most relevant to your audience.
  • Mobile – Mobile tactics can vary slightly or widely from traditional approaches, so how are marketers developing and implementing wireless strategies? How are marketers planning their budgets and measuring their results? And, for the love of all that is holy, when on Earth will I be able to view Flash on my iPad? OK, maybe not that last one. But seriously Steve, it would be nice.
  • E-commerce – What do direct sale sites view as the top opportunities for the upcoming year? Are they investing in site speed enhancement, conversion optimization, or both? And is social media impacting purchases?
  • Agency and vendor selection and management – What factors play into how marketers choose and compensate agencies? How do marketers determine if they need a software platform in a specific space? And if so, do they buy, go with open source, or attempt something homegrown? How do you get IT’s support in choosing a vendor? And then, more importantly, how do you get IT to stop talking about “Star Trek: The Next Generation” already?
  • Salary survey – How much does Bill make?  He hasn’t had a good idea since 1993. And his tuna salad lunches stink up the office. OK, if not Bill, then what about the rest of your peers. Are you being fairly compensated? And what should you pay your team?
  • Lead generation – Which information do marketers view as most valuable? How do they keep their databases updated and clean? Do marketers find third-party lists effective? And in an age of social media, do marketers value a big email list as much?
  • Content marketing and lead nurturing – Do my peers outsource content creation or do it in-house? If so, how? Do they have their own teams? Or just beg, borrow, and steal from other departments?