MarketingSherpa Blog

Teleprospecting, email campaigns, drip marketing, lead nurturing — all of these marketing tactics have one very important element in common. Each one begins with a list, and the quality of the data in that list has a direct influence on the success of each tactic.

Looking at the top of the funnel

“Data is so top of the funnel, yet it is so undervalued,” says Brandon Stamschror, Senior Director of Operations for the Leads Group, MECLABS (the parent company of MarketingSherpa.)

He explains that creating a quality list begins with an organizational philosophy that places a high value on data quality. This might require a philosophy shift in some companies, and it will likely require leadership support in the idea that data quality is important and that this importance might need to be proven by testing.

“A lot of times I see that marketers think they have this really robust, large database, but soon find out that because of data quality issues, they only have a small segment of their actual ideal customers that they wanted to be focusing on,” says Stamschror. “They are kind of getting lost in the quagmire of trying to manage untargeted data.”

Pay more, gain more

Stamschror says the solution may be to spend more on data to reap the benefits of higher-quality lists.

He explains you want to:

• Be specific about the data you need to focus on
• Don’t collect more data than you really need on your ideal buyer profile or persona

If you don’t do these two things, it can become overwhelming to manage a very large list. And if your data quality is low, you might have a list of 50,000 contacts, with only 10,000 who are relevant to your business.

Data hygiene is an ongoing process

Looking at data quality isn’t something you can do once and be satisfied that you’ve completed a task to take off the “to-do” list. Stamschror recommends data remediation projects every three to six months if there is no other data hygiene process in place.

Even though it’s not cost effective having your lead generation and prospecting staff spend time tracking down bad entries in the list, or engaging in a wholesale data update, it is beneficial to create a process where your team is regularly updating and appending account information as part of their day-to-day activity. There is little, to no, additional investment for staff to update contact fields as they discover missing, or incorrect, items. Stamschror adds if controlling data quality isn’t feasible as an internal process, you should find a data quality partner you can trust.

He explains, “It is always important to have someone who has some distinct responsibility for data quality.”

Stamschror says that as many as half of all lists he’s encountered contain duplicate information because there is no data hygiene or remediation process in place to keep the database clean.

“It really gives you a false sense of security,” he says. “You think, ‘I have all these contacts that I can run email campaigns or teleprospecting campaigns off of,’ and then you find out once you get into it that your list isn’t really as big as you thought it was, or as robust as you thought, and worse yet, you are spending a lot of time just wasting time (with the bad list).”

Less can be more

Stamschror says it is much more important to have a very clean, but smaller, prospect list, as opposed to a bloated list full of bad and/or irrelevant data. He states this is particularly important for B2B marketers who should be focused on a smaller group of highly targeted prospects.

Stamschror offers a piece of final advice, “You know the companies that you really need to be focused on. So focus on the right one.”

Related Resources

(Members library) CRM and the Marketing Database: Data hygiene, behavioral analysis and more

(Members library) Cause Marketing: Marketer builds email list with 20% conversion rate

New Chart: Most effective email list growth tactics

Email List Hygiene: Remove four kinds of bad addresses to improve deliverability

B2B Marketing: The 7 most important stages in the teleprospecting funnel

Photo credit: Donovan Govan

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More than 80 percent of CMOs were dissatisfied with their ability to measure marketing ROI and less than 20 percent said their company employed meaningful metrics according to a CMO council study quoted in Harvard Business Review.

The same article cited Copernicus Marketing Research findings that noted that most acquisition efforts fail to break even, no more than ten percent of new products succeed, most sales promotions are unprofitable, and advertising ROI is below four percent.

There is no absence of metrics or measurement tools. The problem is less one of analytics than of lack of alignment across the enterprise as to ROI goals.

But how can that alignment be attained?

There is a need for a common vocabulary and shared buy-in as to key performance indicators (KPIs). It is commonly assumed that all can be resolved if the VP of Sales and the VP of Marketing just go off and have a beer together. This rarely works. A better way to achieve alignment is to borrow from the toolbox of strategic planning and to use scenarios.

Scenario planning is a discipline popularized by Royal Dutch Shell in the ‘80s that has become a standard tool of strategic planning professionals. It is the process in which managers invent and consider the implications of alternate assumptions and futures. As a team-building exercise, it can remove the barriers that office politics, turf wars, and loyalty to current vendors bring to the effort to align goals and assumptions.

As consultant Juergen Daum has written, “The purpose of scenario planning is to help managers to change their view of reality, to match it up more closely with reality as it is, and reality as it is going to be. The end result, however, is not an accurate picture of tomorrow, but better decisions about the future.”

Scenario planning session

A Scenario planning session can be done over a one- or two-day off-site:

• Start by modeling a scenario in which the current ROI goals and benchmarks are accurate and lead to a positive future. This is the “rosy scenario” that is implicitly guiding current thinking.
• The team can then turn, in a politically non-threatening way, to alternate scenarios – those in which current goals and assumptions can be challenged. This process surfaces doubts and uncertainties while clarifying disconnects among the team as to definitions and priorities. Whatever the outcome, the very process builds agreement and understanding.

This process allows managers to confront, without defensiveness, the essential question:

“What if our current assumptions and procedures are wrong?”

Contemplating a scenario without a “rosy” outcome forces participants to both question current practices and to work together to forecast outcomes. The implications of using “wrong” ROI goals can be discussed collaboratively, fostering collaboration and understanding. Ideally, new metrics can be identified and outmoded ones discarded. Inevitably, participants emerge with greater understanding of their goals, of their key performance indicators, and of each other.

Bob Heyman is a keynote speaker at Optimization Summit 2011, and all attendees will receive a copy of his book, “Marketing by the Numbers: How to Measure and Improve the ROI of Any Campaign,” provided by HubSpot.

Gary Angel, President and CTO, Semphonic, contributed heavily to this blog post as well.

Related Resources

Digital Marketing: How to measure ROI from your agencies

Lead Marketing: Cost-per-lead and lead nurturing ROI

New Chart: What Social Metrics are Organizations Monitoring and Measuring?

Maximize your Agency ROI

Much of Facebook’s core functionality centers on its news feed. The constantly updating list of status updates, photos, links and videos helps drive interaction between friends on the network — and between your audience and your brand.

But not all posts are given equal priority in a news feed. Facebook uses a calculation called EdgeRank to determine which updates are prioritized and which are buried.

EdgeRank calculates the “value” of an interaction with a post. Posts with a higher number of valuable interactions are more likely to reach the top of a user’s news feed.

Facebook released the “unweighted” version of its EdgeRank formula at last year’s F8 conference:

A few definitions of Facebook’s terms:

• Object — each item in a news feed is an object. An object can be a written status update, a photo, a video, a link, etc.

• Edge — every interaction with an object is called an edge. This includes comments, likes and tags. As you can see above, some edges are of greater value and more greatly affect EdgeRank.

• Affinity score — when a user regularly messages another user, views their profile, comments on their photos, or interacts in other ways, those interactions increase “affinity” toward that user over time. Users are more likely to see posts that have an “edge” from users for whom they have a higher affinity.

• Time decay — an edge’s value decreases over time.

Focus On Your Audience

Sounds strikingly similar to Google’s PageRank, doesn’t it? You bet. Some marketers are considering which factors drive Facebook’s EdgeRank in hopes of getting more attention to their posts — much like how marketers have worked for years to improve PageRank.

Be careful not to focus too closely on EdgeRank, though. I recently spoke with Justin Kistner, Sr. Manager, Social Media Marketing at Webtrends. Kistner leads product development for Webtrends’ Facebook products. In a recent call, he reiterated that the above calculation is un-weighted and is an “over simplification.”

“For example, we know PageRank for Google could all be boiled down to inbound links. Basically, the more inbound links you have and the better quality links you have, the higher you rank. There is certainly a lot more nuance to the algorithm than just that.”

Not only is the above formula an over simplification, but it is truly secondary to an effective social media marketing strategy. By focusing on the types of content and interactions your audience enjoys, your “objects” will attract more “edges” and will be prioritized in users’ news feeds. Scores and metrics are important to consider — but they should not be the sole driver of your strategy. Your audience, your brand, and your content should be priorities.

Related resources

Social Media Marketing: Online product suggestions generate 10% of revenue

Social Media Marketing: How to optimize the customer experience to benefit from word-of-mouth advertising

Social Media Measurement: Moving forward with the data and tools at hand

Social Media Measurement: Big data is within reach

Social Media Marketing: Tactics ranked by effectiveness, difficultly and usage

Confession time…one of my favorite movies is the Will Ferrell classic, Elf. I love the scene where Buddy (the elf) sees a sign outside of a coffee shop announcing that it has “The World’s Best Cup of Coffee.”

It’s quite a value proposition and thanks to Buddy’s innocence (or ignorance) he barges into the shop and congratulates the entire staff for a job well done. The reason it’s so funny is because we know better. Even the staff at the coffee shop knows better.  To believe such a claim is ridiculous.

Yet many companies still have trouble avoiding such preposterous value propositions in their marketing.

According to a recent incentivized survey done by MarketingExperiments (MarketingSherpa’s sister company), 120 out of the 275 (30%) total business plans we reviewed had no real value proposition. Another 60% were categorized as having only limited or substantial value. Only 10% were considered to have a strong, unique value proposition.

In all, on our scale of zero to five, 90% of those surveyed were at or under a two.

It’s an unnerving statistic given that a well-stated value proposition has (according to our research) been proven to get better response rates on everything from business plans to landing pages.

So how do we craft a value prop that isn’t going to induce a side-splitting laugh in your audience?

Well, I have yet another confession to make…

I’m probably not the right person to ask. I honestly don’t have a lot of background with value proposition. But I DID recently attend a workshop on Landing Page Optimization with the Managing Director (CEO) of MECLABS, Dr. Flint McGlaughlin.

In it, he devoted a whole section to getting your value proposition straight. So I’m going to share what I learned there and share a little of my own commentary as well.

A true value prop isn’t dictated in a board room

According to Flint, the basic key to determining a strong value proposition for your company is understanding that a value prop is not usually determined, it is discovered.

It’s a simple shift in thinking that makes a huge difference. Sitting at your desk and trying to manufacture a shiny new value proposition that you think will sound good is usually pretty fruitless.

Prepare yourself for some hard thinking and investigation into the bowels of your company, as we explore four steps to discovering your value proposition…

1. Answer the question: If I am your ideal customer, why buy from you rather than your competitors?
Assuming it was true, “The World’s Best Cup of Coffee” could be an excellent value proposition. The ideal customer in this case is your typical Manhattan coffee drinker and the reason they should buy coffee there is obvious – it’s the best in the world.

The problem is, it’s not true. The modern consumer simply does not believe your overindulgent hype. So the ideal customer is put off and ends up without a reason to buy coffee there instead of the better-looking shop across the street.

Admittedly, this is an extreme example. Yet marketers make this mistake every day. You likely come across this marketing jargon-filled hype every day. Does a two-person B2B tech start-up really offer a scalable solution for Fortune 500 companies, for example? Just because you say it in your marketing material doesn’t make it true. And your savvy audience is well aware of this fact.

When you’re answering this question for your own value prop, it’s important to note here that you are putting yourself into your customer’s mind by answering as if you were them. So spit out the Kool-Aid and be a little skeptical.

2. Compare your answer with the claims of your main competitors.

Of course we all know that just about anywhere you go, there’s a coffee shop claiming to have the world’s best cup of coffee. Again, that’s part of the comedy of this scene.

If any of your competitors can say the same thing about their products or business as you without completely lying, you don’t have a strong value proposition.

While your mother probably told you how special you were, a unique snowflake unlike all the other kindergarteners in the world, the same can’t automatically be said about your product offering and company. Is it really unique? Or do people only buy from you on a lark or because they haven’t stumbled across your competitors yet?

3. Refine your value proposition until you can articulate it in a single, instantly credible sentence.

The problem with the coffee shop’s value proposition was that it wasn’t instantly credible. No one believes their coffee is the best coffee in the world because there’s no way to prove that.

Your value proposition must be instantly believable. A great way to do this is to add numbers to your value proposition. If that coffee shop had said something along the lines of, “9 out of 10 people preferred our coffee to Starbucks”…you’d be more likely to believe it.

Another strategy is to be as specific as possible. Let’s say you’re not quite there yet with the imaginary value proposition above. What if it said, “9 out of 10 people preferred our coffee to Starbucks in a double-blind taste test?”

The double-blind taste test adds a dimension of specificity that increases the credibility of the sentence.

4. In the end, you must test your value proposition.

No matter what you do to come up with a value proposition, there’s no way to guess what resonates the best with your audience. You need to test it.

Your value prop should be visible in every step of your sales process. Wherever you display it, test different phrasing, angles, and ideas to get deeper inside the mind of your customers.

The better you know what they find valuable, the better you can serve them.

The next stop of the MarketingExperiments Landing Page Optimization Workshop tour is on June 1 in Atlanta. It will also be taught by Dr. Flint McGlaughlin. Then our MECLABS team will take the workshop on the road to New York, San Francisco…and more cities to be announced.

Related Resources

B2B Marketing: On Occam’s razor and value propositions

Optimizing Landing Pages: 3 Keys to Increasing Conversion Rates

Powerful Value Propositions

Value Proposition: Our research team answers your questions

Landing pages get a lot of love. Here at MarketingSherpa and MarketingExperiments we often write about landing page optimization, and offer case studies on how marketers are testing and improving landing page performance. And landing pages deserve all that attention because often those pages are the direct connection between a marketing campaign and a closed deal. We think so highly of landing pages at MarketingSherpa we just released a publication dedicated to LPs — the 2011 Landing Page Optimization Benchmark Report.

The homepage is a channel, not a destination

But because landing pages command so much real and virtual ink, the homepage can seem neglected. The first thing to consider is the homepage is unique to a website. For companies that only offer one product or service, the homepage may be no different than a landing page.

But companies with many products, services, divisions, etc., must look at homepages as a drastically different animal than a landing page. Unlike the landing page where you want to get website visitors to the LP, the homepage is channel where your goal is to get the visitor through the page.

The homepage is possibly the toughest page on a website to test because it “serves many masters” and typically has multiple objectives to achieve.

The usual elements in a homepage to test do overlap with landing pages:

• Eye path direction
• Strength of value proposition
• Color combination
• Image relevance

And testing a homepage involves five basic steps:

You may notice one word features prominently in each step — objectives. Homepage objectives should be broken into three categories:

1. Primary — these are long-term and should have high revenue potential
2. Major — short-term and are typically tied to a marketing campaign or other internal need
3. Minor — functionally necessary elements to the page such as navigation or legal copy

Taking a closer look at homepages, how they differ from landing pages and how tricky they are to actually test and optimize, caused one chart from the Landing Page Optimization Benchmark Report to really stand out.

Boris Grinkot, Associate Director of Product Development, MECLABS, is the author the Landing Page Optimization Benchmark Report and he took a few moments to share his thoughts on homepage optimization and metrics.

Before we get into the questions, here’s a quote from the report (I highlighted the final sentence):

A critical issue becomes the quality of the traffic that the homepage sends into the website. The quality of the traffic is broadly the degree of match between the visitor and the offer – in other words, the predisposition to convert. Reducing bounce rate may be a short-sighted key metric if more visitors get through, yet those are not the visitors that would ever be interested in becoming customers. Dedicating significant page real estate to a $10 gift card offer can explode the clickthrough rate (and conversely, minimize bounces), but it may turn away visitors exploring a multimillion dollar RFP.

In your LPO Benchmark Report, you mention the homepage is possibly the most difficult page for designing a test …

Boris Grinkot: Measurement on the homepage is complicated because so many things typically happen between it and the conversion step. The general point is that when looking at the funnel holistically, a test on the homepage can affect different metrics differently, and sometimes you can get contradictory results — bounce rate reduced = good, conversion rate reduced = bad.

The homepage as any entrance page acts as a filter, and changing it does not only linearly affect clickthroughs to the rest of the funnel, but can affect the quality of visitors that click through — in other words, the segments.

So, what metrics are most important when testing a homepage?

BG: It’s important that marketers monitor several different metrics to get a complete picture of what’s going on. Bounce rate or clickthrough rate measures what happens immediately on the homepage, or wherever it’s measured, but misses how this page affects the rest of the funnel. Overall conversion rate (CR) measures performance of the site as a whole, but ignores where the leaks might be.

More intricate measurement — such as using “active segments” or “goals” — can tell you what happens with visitors who viewed a particular page, meaning that a virtual segment is created based on what the visitor experienced. Segment-specific CR can be much more meaningful because it takes specific page(s) into account.

Boris Grinkot will be providing insights from his Landing Page Optimization Benchmark Report and moderating a panel on “Overcoming institutional barriers to optimization implementation” at the first MarketingSherpa Optimization Summit coming up June 1-3 in Atlanta.

Related Resources

Homepages Optimized web clinic

Homepage Optimization: How sharing ideas can lead to more diverse radical redesigns

Homepage Optimization: How a more logical eye-path led to 59% increase in conversions

Homepage Optimization: Radical redesign ideas for multivariable testing

B2C Testing: A discount airline looks to increase conversion

(Members library) — Office Depot Site Overhaul Lifts Conversions 10%: 7 Tactics to Target High-Impact Improvements

Today’s marketing world is incredibly complex. The growth of digital has dramatically expanded the number of channels and customer touch points that require marketing attention, and it isn’t just a question of number. Digital channels often involve unique skills, unique technology and unique culture. Combining SEO expertise with great digital creative plus Facebook smarts and traditional media buying isn’t difficult, it’s pretty much impossible.

Inevitably, you’re faced with a world where you need to rely upon, direct, manage and motivate multiple agency partners. To do that – and to understand how to allocate resources between channels, how to decide if an agency is giving you all they can, and how to choose where to invest your time and resources – takes sophisticated measurement. You can’t manage what you don’t measure – this statement is as true for your agency relationships as it is for your marketing dollars.

In a world where there are lies, damn lies, and statistics, why would you let your agencies measure their own performance? If your agencies are siloed, they have every incentive (and ability) to make their channel look maximally successful. If you’ve concentrated everything in a single agency, that agency has every incentive (and ability) to make their entire program look successful and not delve too deeply into any single piece.

In today’s environment, measurement is just too important to leave to the wolves.

Intra-Agency Measurement suffers from four BIG problems:

• Skill Set: For most agencies, measurement is just grafted onto a creative culture. It isn’t their business, core expertise or focus and isn’t what makes them money.
• Bias: It doesn’t take evil intent to create bias. One of the great challenges of measurement is the temptation to always pass on good news. When the analyst has a self-interested stake in the measurement, this problem is that much worse.
• Siloed View of the World: Even the best measurement an agency can provide is typically limited to their world and their tools. They see only their slice of the pie – meaning that cannibalization, cross-channel, and customer issues are invisible to them.
• Standardization: Every industry has evolved its own way of talking about measurement and they are all different. Nobody agrees what engagement means or how ROI metrics should be applied to them. Vendors have reports and technology that are narrowly adapted to their own language and techniques and cannot be standardized.

What’s the right solution?

You need a “Digital Watchdog” – either an analytics agency of record or an internal employee or department tasked with making sure that every channel you use has the right measurement, the right standards, and the right level of resources and attention.

A Digital Watchdog should be focused explicitly on measurement, measurement tools and measurement skills. That guarantees you a culture based on measurement and an appropriate skill-set to solve your measurement challenges. A Digital Watchdog should have NO vested interested in your spend. They should not manage ANY media budget or have any stake in which channels you invest in or use.

That’s what you should expect of a Digital Watchdog. Here’s what they should expect of you.

A Digital Watchdog needs to be given a cross-channel view of your customers and measurement. They need to see and have access to all your marketing spend and agency reporting. A Digital Watchdog needs to be able to create or collaborate on the creation of a comprehensive view of measurement standardization. As long as you allow each channel to measure itself its own way, you can’t expect ANYONE to make sense of the whole picture.

There are some key steps when it comes to getting started with a Digital Watchdog. Usually, you’ll start with review of the measurement in-place for each channel – is it complete, accurate, and robust? Having the basic measurement infrastructure in place (and knowing it’s right) is essential.

The second step is typically the creation of a standardized measurement framework (based on segmentation) that can be applied to every channel. Useful measurement begins with audience segmentation and drives across your business naturally – not by forcing your business into artificial measurement constructs.

Once you’ve got a good framework in place, it’s time to execute both Media-Mix and Attribution Modeling to understand spending interactions and optimization. Media-Mix Modeling is your best tool for deciding how moving the levers of marketing spend by channel drive total business results. Attribution Modeling helps you understand how channels work in harmony (or at cross-purposes) when it comes to acquisition, engagement and conversion.

At the same time, you’ll want to identify the holes and gaps where your agency measurement isn’t adequate, where their performance is sub-optimal, or where you’re not getting the attention you deserve. Your Digital Watchdog should drive channel-specific optimizations for “problem” agencies and help you evaluate how to get more from your relationships.

With the dollars at stake in today’s marketing world, there’s just too much at stake to count on your agencies doing the right thing with measurement. They are in the wrong place, with the wrong tools, the wrong motives and the wrong skill sets to do the job right.

Bob Heyman is a keynote speaker at Optimization Summit 2011, and all attendees will receive a copy of his book, “Marketing by the Numbers: How to Measure and Improve the ROI of Any Campaign,” provided by HubSpot.

Gary Angel, President and CTO, Semphonic, contributed heavily to this blog post as well.

Related Resources:

Optimization Summit 2011

Marketing Strategies: Is performance-based vendor pricing the best value?

New Chart: What Social Metrics are Organizations Monitoring and Measuring?

Maximize your Agency ROI

We just launched the registration landing pages for our upcoming MarketingSherpa B2B Summits — the first will be held September 26-27 in Boston, and the second October 24-25 in San Francisco — and looking toward those events got me thinking about all the learnings I’ve taken away from these last months of digging deeply into the complex world of B2B marketing.

Since I began covering the MarketingSherpa B2B beat toward the end of last year, I’ve had the opportunity to speak with many marketers, industry experts, and our internal researchers and thought leaders here at MECLABS (MarketingSherpa’s parent company). One area that really separates B2B from B2C marketing has come up many times — the complexity of the B2B sale and the length of the B2B sales cycle.

Our research, based on interviews with 935 B2B marketers in the MarketingSherpa 2011 B2B Marketing Benchmark Report, found marketing to a lengthening sales cycle as a growing concern, and the third-most-pressing challenge for B2B marketers today (trailing only quality and quantity of lead generation):

That same report shows that more than one-third of B2B sales cycles from first inquiry to closed deal last seven months, or longer:

During my B2B beat reporting I’ve learned quite a bit about three very interrelated marketing areas that address this challenge — the strategy of lead nurturing, the tactic of drip marketing campaigns and the use of marketing automation software tools.

Growing the lead into a sales-ready prospect

A lead generated is very rarely a lead ready to hand off to Sales, and when your sales cycle is measured in months, or even longer than a year, you want to have a lead nurturing program to keep in touch with that potential customer and turn them into a sales-ready lead.

Brian Carroll, Executive Director of Applied Research, MECLABS, explained to me that most lead nurturing programs don’t have an impact on conversion before at least five meaningful touches, and that the important thing is to continue nurturing leads whether it takes five touches or 25 touches to get them to the sales-ready point.

He says, “If you have a nine-month sales cycle, you should nurture a lead in those nine months, and that’s at a minimum level. So that means nine nurturing patterns during the course of that lead.”

Here’s a table from the 2011 B2B Marketing Advanced Practices Handbook outlining some lead nurturing basics:

If you notice, content is a major aspect of that table. That’s because content marketing is a key element in lead nurturing. New information about your product is a good reason to reach out to the nurtured lead. So is a vendor-agnostic article from an industry thought leader that provides usable information or advice on your business area.

Other touches might include an invitation to an event, such as a webinar, or maybe an executive summary and key takeaway list from an event along with links to video or audio excerpts from the presentation.

Content marketing is not the only piece in a lead nurturing campaign, but it should be an area of high priority focus.

Keeping those touches coming

If lead nurturing is an overall strategy to meet the challenge of a long sales cycle, drip marketing is a specific tactic to execute that strategy. Drip marketing involves automatically sending marketing messages to your list via email or other methods. The messages are “dripped” in a series based on the specific behavior or status of the recipient.

Here’s Jeanne Jennings from a SherpaBlog post on drip marketing:

Drip campaigns take their name from drip irrigation, which saves resources by allowing water and fertilizer to be consistently delivered directly to the roots of plants. There’s less waste than with sprinklers and topical fertilizer application; drip irrigation also provides a consistent level of moisture to the soil, rather than the “soak and dry” experience that sprinklers provide.

Drip marketing campaigns are most commonly delivered via the email channel because of its short turn-around, quick delivery time and cost-effective nature. A drip campaign involves a series of messages that are sent or “dripped” in a predefined order at a predefined interval. Each message in the campaign stands on its own but also builds on the missives that have come before it. A drip campaign is a response to a specific behavior or status of the recipient – and it encourages a specific action.

… and then SkyNet took over

Actually April 19^th has passed and I’m pretty certain no terminator robots are heading back in time as I write this post, but lead nurturing does have a powerful tool that makes the entire process much easier to manage — marketing automation software.

Marketing automation offers many benefits for marketers:

• It provides a trackable database and measurable analytic results for marketing efforts
• It, well, automates many marketing tasks that previously had to be handled manually
• For a long sales cycle, multi-touch lead nurturing campaign, it allows marketers to focus on determining the creative elements of the effort — email copy, content with each touch, etc. — and setting the timing and triggers for each touch, and the software handles the actual execution of the campaign

A small business with a handful of leads to nurture can most likely run the campaign manually. A large corporation with hundreds, thousands, or even many more leads will require marketing automation to run an effective lead nurturing program.

Related Resources

Members library – B2B How-To: 5 lead nurturing tactics to get from lead gen to sales-qualified

Members library – How-To Increase Relevance: Integrating drip marketing into an email campaign

No Budget and Less Time? Lead Nurturing in Five Simple Steps

Lead Marketing: Cost-per-lead and lead nurturing ROI

B2B Marketing: Calls-to-action and the business buying cycle

Members libarary — How and When to Use Content in the B2B Sales Process

Quick quiz, savvy marketers.

What is going on in this picture?

A.      Their flights were canceled and all the hotels are booked up, so they’re camping out on the street for the night.

B.      They are pioneers of the latest fad – urban camping.

C.      They represent a new demographic – homeless yuppies. They bought a McMansion that was foreclosed on, yet took all the nice gear they bought at REI and now are forced to use it merely to survive.

D.      They are the natural consequence of some very impressive loyalty marketing.

The answer, of course, is D. They are camping out, on line at the Fifth Avenue Apple Store to be one of the first few people to buy an iPhone.

Polish toilet paper and well-designed telephones

“I remember once, a relative in France sent us three rolls of toilet paper. We couldn’t believe how soft it was. We were in heaven,” my colleague, MECLABS Research Manager Zuzia Soldenhoff-Thorpe told me recently. She grew up in Communist Poland, and her parents would wait in line for six hours in the Polish winter just to buy toilet paper. Scratchy, rough toilet paper. Not the fancy French stuff.

And that is understandable. Toilet paper is a necessity. Communist Poland rationed it.

But what would drive otherwise rational people in the world’s richest nation to wait in line for a telephone? Well, loyalty. In their view, they have solidarity with the brand.

So, what are the benefits of creating solidarity forever with your customers?

The value of a loyal customer

“A loyal customer is less price-sensitive and nearly immune to competitive entreaties. A loyal customer is often open to trying line extensions. Finally, a loyal customer is much more willing to forgive your inevitable small fumbles. (Does anyone seriously think Apple is going to lose core customers because iPad production delays due to the Japanese situation? Not likely.),” said Micah Solomon, author of “Exceptional Service, Exceptional Profit.”

On the other hand, sometimes customer acquisition costs are so high that you need loyal customers just to break even. “It is estimated today that a large credit card portfolio has an 18-24 month window to repay the initial acquisition cost of that customer. Without loyalty and engagement you are losing money on every acquired customer,” said Mark Johnson, CEO, Loyalty 360 (the Loyalty Marketing Association).

A few data points to consider:

• It is six to seven times more costly to acquire a new customer than retain an existing one
• Brand advocates recommend and share products two to four times more than the average consumer
• 60 percent of customer who hear of a positive (or, in fairness, negative) experience will change their buying habits
• Over three years, customers referred by online grocery shoppers spent an additional 75 percent of what the original shopper spent

Of course, to benefit from that, first you must get the referral, and then you must keep them as customers for that long…

How to win and keep loyal customers

So, how do you instill loyalty? If your target audience is a dog, the answer is easy (Tummy Yummies). If, however, your audience is the jaded, savvy, demanding, rapidly evolving, skeptical, fickle, streetwise, cynical modern consumer, what then?

That’s no easy question to answer. So, I passed it around to a few industry leaders to see what advice they could give you to help you foster loyalty in your customers…

• Be transparent – As Dr. Flint McGlaughlin, Managing Director, MECLABS says “Tell me what you can’t do, and I might believe you when you tell me what you can do.
• Be accessible – “Make your company extremely easy to reach via your marketing materials and correspondence,” Micah Solomon said. “Don’t – if you can avoid it – send out mass emails from a ‘do not reply!’ address; either have the address accept replies or have it extremely clear how to easily reply through an alternative mechanism.”
• Deliver a rewarding experience, not just “rewards” – “Loyalty is MUCH bigger than just points, it is expanding to the process, techniques, software, ideas, communication mediums and interactions that create and engender engagement and loyalty. It is NOT ABOUT POINTS anymore,” Mark Johnson said.
• Step out of your shoes – “You cannot treat others as you would like to be treated. Instead, you must identify what they want and treat them as they want to be treated,” Bob Lucas, Managing Partner, Global Performance Strategies advised. “Talk to your customers and solicit their opinions and expectations, then build marketing initiatives around them. This individualized approach to communicating with others is more likely to result in greater customer satisfaction, retention and loyalty.”
• Less can be more – “Every day, we are bombarded with messaging from brands trying to hold our attention, and the ability to communicate a relevant, personalized message that appeals to your audience plays a crucial role in engagement and loyalty,” according to Rod Hirsh, Global Director, Brand and Content, Thunderhead. “Establish a baseline of what good communication practices are and make it a policy to exceed expectations. Aim to streamline and cut excessive communication while at the same time creating a better customer experience.”
• Build a relationship, don’t just sell – “Relationships trump product. Anyone will tell you that,” said Andreas Ryuta Stenzel, Marketing Director, TRUSTe. “Sales and Marketing build and own relationships at scale more than almost any customer service organizations, especially these days with the more personal touches that automated nurturing and social media bring to the table.”

Here are a few thoughts of my own as well. And I’d love to hear what you’ve learned as well.

• Be the customers’ advocate – Always ensure your company is delivering true value to your customers, not just a value proposition. You are the one making a promise to your customer with your innovative, creative, out-of-the-box marketing campaigns, so you also better be the one making sure your company comes through on that promise. Of course, that is no small task and likely involves Sales, Product Development, Manufacturing, Customer Service, and many more parts of your organization. But just because you cannot perfectly complete that challenge, doesn’t mean you’re exempt from trying. Or as Rabbi Tarfon said, “You are not required to complete the task, but neither are you free to desist from it.”
• Don’t be shady – As marketers, we are always trying to be persuasive. But, c’mon, there are limits. Dishonest marketing breeds disloyal customers.
• Radiate passion – You can’t expect passion from your customers unless you live it and breathe it yourself. Yes, we’ve all got bills to pay. Yes, we all need a job. But when and if possible, market things you are truly passionate about. Or spend enough time with your customers to understand why they really care about your products. Sure, it’s easy to do this if you’re a Harley enthusiast. But even a VP of Sales and Marketing for an industrial hose company can find a passionate way to communicate with the audience.

Related Resources

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PPC Ad Optimization: Testing, unique landing pages, and honesty

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When I was a kid, I thought suggestion boxes in restaurants were strange. I wondered: what do people suggest? And why does the box have a lock? The whole thing seemed mysterious.

Later in life, when I worked in restaurants, I realized there was no mystery. The boxes were empty. The rare suggestions they held invariably used four-letter words and misspellings.

Today’s suggestion boxes are different in almost every way:

• First of all, they’re digital. Customers are more likely to sound off about your company in a social network or review website than in a hand-scrawled note.
• Second, people actually use these new boxes.
• Third, you don’t own the suggestion box. Somebody else does.
• Last, and probably most important, is that the lock is gone. Suggestions are posted for the world to see.

Kip Clayton, VP, Marketing and Business Development, Parasole, is aware of the trend. He oversees marketing for Parasole’s portfolio of restaurants, and his team uses tools monitor the Web for customers’ comments and feedback.

“We always monitor what people are saying about us, whether it’s food writers, other members of the media, or most importantly, our guests.”

Such analysis provides Parasole with a variety of information it can use to improve customers’ experiences.

Feedback on lunch at launch

For example, in November, Parasole launched Mozza Mia, a pizza restaurant in Edina, Minnesota. The restaurant specializes in wood-fired pizzas and homemade mozzarella cheese.

Each month, the team received a report on the online feedback about the new restaurant. Information was pulled from a variety of websites, such as OpenTable and Yelp. Based on customer commentary, the report graded the restaurant in areas such as food quality, beverages, and menu options.

“By February, we were getting pretty clear feedback that people wanted more choices than we were offering,” Clatyon says.

Mozza Mia offered a diverse selection of pizzas, but customers could not order in the traditional “build your own” pizza style that so many other pizza restaurants used. The team decided it needed to offer the option.

“Within a week, we had a plan for how to handle the logistics and inventory to allow customers to build their own pizzas,” Clayton says.

Suggestion turns into success

Mozza Mia offered the “build your own” pizza option less than one month later. Now, if customers want a simple pepperoni pizza, they can have it.

The pizzas quickly grew to comprise 10% of the restaurant’s sales, Clayton says, and helped the restaurant overcome the “veto factor.”

“The last thing you want is people ‘vetoing’ your restaurant because you don’t offer what they’re looking for,” he says. “That doesn’t mean you try to be all things to all people, but the flipside is that you better be listening to what people are saying and asking for.”

Related resources

Market Research via Social Media

Social Media Marketing: How to optimize the customer experience to benefit from word-of-mouth advertising

Social Media Measurement: Moving forward with the data and tools at hand

Social Media Measurement: Big data is within reach

Social Media Marketing: Tactics ranked by effectiveness, difficultly and usage

newBrandAnaltyics –  how Parasole monitors the Web for customers’ comments and feedback

Photo: hashmil

Over the last two weeks I’ve covered a number of angles on lead nurturing. Last week’s Sherpa B2B newsletter took a look at five lead nurturing tactics, and yesterday’s blog post was on why you should consider nurturing leads lost to competitors along with tips on how to do just that.

Today, MECLABS’ Executive Director of Applied Research (Full disclosure: MECLABS is the parent company of MarketingSherpa), Brian Carroll provides insight on how to look at both cost-per-lead generated in terms of lead nurturing and measuring the success of a lead nurturing program through return-on-investment (ROI).

Cost-per-lead is the wrong metric

Although many marketers are interested in the cost-per-lead number, Carroll says this is the wrong metric to focus on. He explains by saying if a lead is generated at a low cost, but never contributes to the sales pipeline, it is a wasted expense. Great cost-per-lead number, but terrible (non) contributor to the bottom line.

Carroll believes two metrics that are better measures across the entire process are cost-per-opportunity and cost-per-pipeline revenue. Cost-per-opportunity helps you understand how Sales accepts and pursues leads, and in the long run that metric shows if those leads are actually helping Sales, and if Marketing is contributing to the pipeline.

He says to take a look at your entire marketing expense-to-revenue, and then contrast that number to expense-to-revenue after implementing lead nurturing.  He adds lead-to-sale conversion rate is the most important metric in the entire process.

Carroll states, “We have examples of nurturing programs returning a ten-times return for every dollar spent, and we had other examples of nurturing programs where it is a fifty-times return for every dollar spent, meaning for every dollar that we put towards an existing lead, we are generating $50 of top line revenue.”

Here is a list of metrics and indicators from one of Carroll’s blog posts:

These are real-world metrics that every marketer should track in their lead generation program:

• Number of inquiries? (people who raised their hands)
• Number of leads? (qualified as “sales-ready”)
• Number of opportunities? (leads that move to pipeline)
• Number of closed sales? (generated from marketing leads)

If marketers know those metrics they can start to track the following key performance indicators:

• Inquiry to lead ratio (cost-per-lead)
• Lead to opportunity ratio (cost-per-opportunity)
• Lead to pipeline revenue ratio (cost-per-pipeline revenue)
• Lead to sale (win) ratio (cost-per-closed sale)

A value-driven mindset requires leaders and marketers to plan and budget for the long term and to take a more holistic view that goes beyond cost-per-lead budgets.

Using ROI to measure lead nurturing success

Carroll began this conversation by describing lead nurturing investment. He gives an example that if you plan on spending $100,000 on a new lead program, $25,000 of that investment should be allocated to lead nurturing. Lead nurturing should command about 25 percent of a lead campaign’s budget.

When looking at ROI goals for lead nurturing, he believes you first look at the objective of the lead generation program — ten times, 20 times  return or whatever goal you set — and use that goal as a starting point for the lead nurturing goal.

He adds what companies generate from a lead nurturing program is going to be affected by a number of factors:

• The product sold
• The brand
• The value proposition
• The offer
• The ability of Sales to convert leads into revenue

It’s also important to remember nurturing programs take longer to provide a return because a typical lead nurturing program involves multiple touches over a period of time, but marketers can point to building momentum toward final conversion as a positive result of nurturing.

Carroll says, “I documented a case study of someone seeing a four million dollar lead nurturing pipeline impact in year one, and that same company, the following year, with the same budget from that same lead nurturing program saw a fourteen million dollar pipeline impact because returns on nurturing over time grew to be exponential.”

A lead nurturing analogy

To complete all this talk about lead nurturing, here’s an analogy from Carroll:

I worked on a farm growing up and the farmer said, “You don’t pick your corn to check if it is growing. You have to nurture it. It needs sun, it needs water, it needs good soil to provide a yield.” And the same is true in these relationships that we are building as well.

Related Resources

No Budget and Less Time? Lead Nurturing in Five Simple Steps

Are Marketers Measuring Their Success or Someone Else’s?

Lead Nurturing and Management Q&A: How to Handle 5 Key Challenges

(Members library) Lead Gen Overhaul: 4 Strategies to Boost Response Rates, Reduce Cost-per-Lead