For More Accurate Marketing ROI, Think Incrementally

Return on investment (ROI) is a financial measure that managers use to guide major investment decisions.  For example, suppose that you are considering a business expansion opportunity that will require the purchase of new machinery and certain other investments.  To evaluate this potential expansion, you would discount all of the future profits and expenses related to the expansion and calculate a net present value for the expansion opportunity.  Then, you would use those net present values to compare the gain from the expansion investment with the cost of the expansion investment and calculate the projected ROI of the expansion project.

When we use ROI to evaluate prospective marketing investments, we need to adapt the traditional ROI analysis process a little, primarily because unlike most major capital investments, marketing investments can often be made in relatively small increments.  In other words, marketing investments are often not simple "go-no go" decisions.  In many cases, the more difficult questions relate to the size and scope of a potential marketing campaign or program.  How long should the campaign run?  How many prospects should be targeted, and how many times should they be contacted?

For example, suppose that you are considering a direct mail campaign to generate new sales leads for your B2B company.  You have identified three mailing lists that you could use in this campaign.  Each of these lists contains 1,500 names.  The first list (List 1) is a "house" list that includes prospects that your company has had some previous contact with.  Therefore, you believe that List 1 contains the best prospects and will probably produce the most new customers.  List 2 and List 3 are both outside lists that you can purchase, and based on past experience, you believe that List 2 will be more productive than List 3.  The question is:  Should your campaign target only the prospects in List 1, or those in List 1 and List 2, or those in all three lists.

The table below shows the estimated costs and the projected results of all three alternative versions of the campaign.  The top portion of the table shows the overall ROI calculations.  The lower portion of the table shows the incremental results as you move from the first option to the second and from the second to the third.

For this example, let's assume that your company requires that all proposed marketing investments show a projected ROI of at least 15 percent.

If you look at the overall ROI calculations shown above, you would probably recommend including all three mailing lists in the direct mail campaign.  Even though the projected ROI of 57.5 percent is lower than the other two options, it still far exceeds your company's ROI threshold of 15 percent.  The three-list option also generates the highest projected total return ($15,750) and the highest projected net return ($5,750).

However, if you look at the incremental analysis, you see a different story.  Here, you see that if you include List 3 in the campaign (as opposed to only List 1 and List 2), your company will incur $2,500 of additional costs, and you will increase your net return by $250.  This means that the incremental ROI generated by including List 3 in the campaign is only 10 percent.  Since this falls below your company's ROI threshold, you would probably recommend against including List 3 in the campaign.

This example illustrates how the incremental approach to analyzing marketing ROI can lead to more profitable marketing decisions by measuring the incremental value of each incremental investment.

You Have No Metrics for B2B Social Media Measurement? (Survey Sneak Peek)

Here is another interesting result from the B2B social media survey. I was surprised to learn that a plurality of B2B marketers (45%) say they don't have ANY metrics in place for measuring social media effectiveness. None. Something tells me that B2B marketers will get away with this only for a short time until investment in social media comes under increased scrutiny.

Take a look the chart below to see the popularity of various social media metrics for measuring activity, followership, engagement, leads, and sales results (click chart to enlarge | n = 210).

Resources to learn more about social media metrics

• The 10 Social Media Metrics Your Company Should Monitor
• Social Media Measurement: Are You Getting Value Out Of Twitter and Its Peers?
• Social Media Measurement: It's Not Impossible

Take the social media survey now and receive the complete survey report before it is officially published. Feel free to share the survey link with your B2B marketing colleagues and friends: http://bit.ly/socsurvey

What's after your website launch?

You've finally got your website up and running...now what?

Mastering natural search ranking has proven to be a fundamental part of the online marketing mix. And it's critical in getting targeted, organic traffic to your website.

Search engine marketing (SEM) and search engine optimization (SEO) - the ability to increase your site's visibility in organic search listings and refine the content structure on the site itself - are critical for market awareness and customer acquisition. According to WebProNews, 66.3 percent of searchers click on organic listings before they click on a sponsored link. Even more important, a recent study by CreativeWebsiteMarketing.com indicates that most people who buy online start with a search engine.

Don't let your site get lost on the World Wide Web. Here are five simple ways to help boost your website's traffic and optimization...for free:

1. Create online buzz about your site, product, or service.
You can do this by generating online press releases. There are services on the Web, such as PRWeb.com or Free-press-release.com, that do this for free or at a nominal cost. Another idea is to post comments to high-traffic blogs, bulletin boards, chat rooms, or forums.

Do a Web search for top blogs or news forums that are related to whatever it is that you're selling. Go to each site, one by one, and post a comment. (Start a new topic or reply to an existing one.) This helps in two ways: One, you create buzz in the marketplace. Depending on your tactics, your message can even go viral. Two, you get a "back-link" to your site that helps when the site is indexed by search engine spiders.

An important note: Your post should be relevant and genuine. Your comment should be relevant to the question you're replying to, have some sort of value to the readers that view it, and be in the proper area/subject matter on the forum you're posting to. Stay away from posts that are blatantly self-serving. These posts are viewed as spam by forum webmasters and could get you banned from the forum, or at least be deleted.

2. Quality inbound link program.
Set up a reciprocal link page or blog roll (a listing of URLs on a blog, as opposed to a website) that can house links from industry sites. Contact these sites to see if they'd be willing to swap links with you - a link to your site for a link to theirs. Again, relevance is key. Search engines shun link harvesting (collecting links from random websites that have no relevance to your site), so these links should be from sites that are similar in nature to your business.

3. Give Web searchers great content and a link back to your site.
Upload relevant, useful content to sites that make such information available to other sites that want to publish it, such as eZinearticles.com, ArticlesBase.com, ArticleDashboard.com or ArticlesFactory.com. These sites should be targeted to your audience. This is a great way to increase market awareness as well as establish an inbound link to your site. There is also a syndication opportunity, as third-party sites may come across your article when doing a Web search and republish your content on their own websites. As long as third-parties give your site editorial attribution and a link, getting them to republish your content is just another distribution channel for you to consider.

4. Website pages should be keyword rich and related to your business.
Make a list of your top keywords and variations of those words, and incorporate them into the copy on your site (avoiding the obvious repetition of words). Your strongest keywords should be heaviest from the top of your webpage to bottom. Make sure your title tags (the descriptions at the top of each page) and meta tags are unique and chock full of keywords.

5. List your site in online directories by related category or region.
This is an effective way to increase exposure and get found by prospects searching specifically for information on your product or service by keyword topic.

With organic online marketing, since it's free, you're trading expediency's for cost. So it could take weeks to months for your site to be indexed by search engines and for it to start gaining traction in the SERPs.

Perpetuating the Myth

I've just returned from the Theatre Communications Group Annual Conference. The theme for the conference was "Ideas into Action," and it built upon the previous year's conference where the field took a look at some of the major issues facing all of us. The idea was to take what we discussed last year and to explore "bold new solutions."

The first session I attended was entitled "Theatres Becoming Centers in the 21st Century." I attended partially because my Artistic Director, Molly Smith, was speaking, but also because I wanted to hear some ideas from other centers from around the nation as we move toward the opening of the Mead Center for American Theater. The one thing that stayed with me through the entire conference from that session was the quote Molly used to open her remarks--she referenced a quote by R. Buckminster Fuller in which he said: "You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete." It made me think that as a field, if we generally agree that our business models have significant issues, then why do we spend so much energy devising band-aids for them instead of building new models that make the existing ones obsolete?

Later that evening, I had the pleasure of listening to a wonderful speech given by Jonah Lehrer, the author of the book "How We Decide: the New Science of Decision Making." He kept me captivated throughout his entire manifesto, but a single story stood out among the rest (well, at least to me). The story goes that Procter & Gamble decided they wanted to invent a new soap to make mopping more efficient. After several months of failed attempts to create this novel soap in house, they hired a creativity firm to work with them. The firm spent nine months studying homemakers as they mopped their floors, and in the end, they concluded that a new soap wouldn't revolutionize mopping because mopping as a means of cleaning was essentially flawed in itself. After observing one woman cleaning up coffee grounds on the floor with a damp paper towel, an idea emerged--what about getting rid of the mop entirely, and fastening a damp paper towel to the end of a stick? And the Swiffer was born.

After more than 50 years of success, where should the resident theater movement look to throw away a mop, and replace it with a Swiffer? In looking back on my scribbled notes, it looks like I came up with four different ideas:

1. Arts Education/Community Engagement. The idea of having an education department at a resident theater is relatively new. Maybe 15 years or so ago, funders started to route resources to student and community programs. Theater companies took note, and started developing more education programming, however the programming was almost always intended to compliment the more "formal" arts education that students were getting in the schools. Fast forward to present day where the focus of our schools have become glued to developing the highest standardized test scores. In this environment, arts education has been highly marginalized, if not all together eliminated. Who is teaching creativity, at a time where we frequently hear from top corporations that creativity is a key component to success in today's ever changing world? Do we need to look at our education departments to figure out how to serve this essential need by ourselves instead of being a complimentary service to our school systems.

2. Subscriptions. Where is our generation's Danny Newman? When he invented the subscription, it revolutionized how performing arts organizations did business, and it mirrored how a certain generation wanted to "consume" artistic product. Baby Boomers joined Kiwanis clubs, went to church, participated in bowling leagues, and purchased tickets to a large number of shows well in advance at discounted prices. But times have changed--Generation X doesn't act like its predecessor, but we are still using the same sales techniques on them that have worked for decades with Mom and Dad. How do we continue to serve Baby Boomers as they still have the largest disposable income, and work to meet the needs and buying habits of Generation X and the Millenials? We can keep slapping band-aids on the subscription model, by doing things like introducing smaller and smaller "pick your own" packages, or acknowledge that we may need a new mop to clean up this particular problem.

3. Development vs. Marketing. If you read my previous post entitled "The Problem of Silos," you know this is an issue that I have been stuck on for awhile. In my career, I have worked at some amazing organizations both incredibly large and very small, and I can honestly say I have never seen an operation that integrates the needs and priorities of marketing and development well. Almost always, one wins out over the other, the cause of which usually can be tracked back to funding and/or leadership. To solve this, a few organizations have developed external affairs divisions that house both marketing and development activities, however those departments are just as segregated under a Director of External Affairs as they would be under an Executive Director. I proposed a new system in my prior post, but this type of change is daunting considering it would mean dismantling and rebuilding the entire revenue generating departments of an organization.

4. Funding vs. Accessibility. There are a multitude of reports out that show that funding has dropped during the global economic crisis, which has put more and more pressure on earned revenue sources to make up the difference. On the 2amt blog, there has been a heated debate on dynamic pricing, particularly as it is used by non-profit theaters. For those unaware of dynamic pricing, the basic premise is that ticket prices for popular productions are increased as demand increases. Is it a coincidence that dynamic pricing has really gained ground and become almost standard practice during the two years following the start of the global economic crisis? If there is less funding, then we need to make more money in ticket sales. Seems logical to me. The problem is that many times, we are doing excellent work in education and outreach programs that reach populations that will never be able to afford a ticket at our institutions. This used to be addressed by funders who supported lower priced tickets, but as that money has dried up, to keep afloat, institutions have cut discounting programs. So where does that leave us? For me, I have become more and more interested in finding new revenue streams--and hopefully new streams that aren't dependant upon the fickleness of reviews either.

As I wrap up this post, I am more cognizant than ever that as a professor of arts management, the techniques that I am teaching my graduate students are antiquated. I call them "best practices" when a more appropriate title might be "yesterday's best practices." If I continue to teach how I was taught, aren't I just perpetuating the myth that our arts organizations are healthy and ready to take on the challenges of the 21st century? Maybe I should begin my classes by challenging them to throw out the mop.

What B2B Marketing Tactics Are Up, Down, Flat? (Survey Sneak Peek)

Last week, we talked about the changing B2B marketing mix ("Is Traditional B2B Marketing Dead?" which caused a heated debate about whether these changes are real and consequential). Let's take a look at some data. We are currently conducting a social media survey among B2B marketing professionals, and one of the questions is aimed at better understanding what activities marketing teams are doing more or less of than 3 years ago. Here are the preliminary results for this question (click chart to enlarge | n = 176).

Marketing tactics that are trending up
The biggest increase in marketing activity over the last 3 years is reported for social media where 81% of respondents say that they are doing more of it (not surprising considering social media use in B2B was still nascent 3 years ago). The next big jump is in content creation - 68% of respondents have increased this tactic in their marketing mix.

This supports the observation that companies are increasingly using content marketing to influence and guide prospects through the buying cycle. Website activity is also up, with 56% of people using it more aggressively than 3 years ago. Email marketing is slightly up - likely a reflection of the increasing adoption of marketing automation platforms that heavily rely on email to communicate targeted, customized, and behavior driven messages.

Marketing tactics that are trending down
Now let's look at the activities that are down over the last 3 years. A usual suspect, direct mailings, is used less by 55% of the people who responded to the survey. Not surprising considering the often low response rates and difficulties tracking conversions, in addition to the comparatively higher cost of direct mail. Same with print advertising, which is used less by 62% of respondents.

Marketing tactics that are flat
A couple of tactics have maintained their share in the marketing mix over the years. Events and Webinars, for example, are still executed at about the same level as 3 years ago by 50% of the marketers polled in the survey (although Webinars are trending up, and so is online advertising with 42% of respondents keeping it a about the same level and 37 percent increasing investment compared to three years ago).

Want to read the survey report?
If you are interested in receiving the survey report, please contribute to the survey.

Please feel free to share the link with your B2B marketing colleagues and friends - here is the link to forward: http://bit.ly/socsurvey.

Is the In-House B2B Marketing Department Going Away?

My last post triggered a heated debate (mostly in the LinkedIn B2B Technology Marketing Community) about the dramatic changes we see in the B2B marketing function. One of the interesting topics that came up was outsourcing. As you know, more and more corporate functions are moving to a service and subscription based model where companies aggressively outsource everything that is not core to the business in order to gain advantages related to cost, scalability, and agility. This trend is nothing new, it has been building for a long time and many corporate functions like manufacturing have been outsourcing for decades. It seems as if the marketing function has only recently caught on to this trend in a major way, though.

Is marketing moving to a subscription based model?
We sure see this trend in the marketing automation platforms we use on a daily basis – webcasts, email campaigns, lead management, and many more. Many applications and services are not residing in-house on some server in the datacenter but are instead delivered in the cloud, provided as Software as a Service. This not only reduces fixed cost and enables pay as you go models; it also helps marketing to get the job done more quickly, without having to rely on the IT department (which in too many companies is becoming a bottleneck instead of a business enabler – which is further accelerating the push towards SaaS). The next phase I see is that SaaS vendors are partnering to provide end-to-end solutions that span multiple platforms so you can basically run all of your marketing automation in the cloud through a single interface (Salesforce.com is leading the way here with a myriad of 3rd party apps linked into the Salesforce.com ecosystem that expand the value chain step by step).

Outsourcing marketing talent
Do we see the same trend developing for outsourcing of talent? Sure, marketing departments have always outsourced campaigns, creative services, and projects to ad/PR/creative agencies. But it seems to me - observing what is going on in many companies and talking to a lot of people in the B2B marketing space - that the marketing outsourcing trend has dramatically accelerated over the last 12 months. Talent outsourcing is also moving up the value chain to projects that have traditionally remained in house.

What do you see happening?
Do you see the same trends? Is B2B marketing moving to a virtual model where a company only has a minimum core staff of true marketing experts that define strategy and programs, and then orchestrate a complex array of vendors, freelancers, and platforms to deliver on marketing goals? Is the future for the majority of marketing professionals a freelance model of working for dozens of clients at the same time? What is the barrier where the required level of domain expertise and coordination cost are outweighing the incremental savings and flexibility benefits?

Is the classic marketing department dead? Looking forward to your thoughts and observations on the topic.

Profit Partners: Maximizing JV and Affiliate Relationships

The current economic environment is making many marketers look at lost cost ways to drive sales and be a strategic and creative thinker. Now is a great time to look to your competition for opportunities to help grow your list and add extra revenues to your bottom line for little or no cost.

If my clients tell me they want to grow their list or increase revenues WITHOUT spending money on advertising, my advice is focus on leveraging their marketing and editorial relationships with our fellow publishers and aggressively pursuing ad swaps, guest editorials, and joint ventures (JV) or cultivating new relationships. And for the clients that don't have a marketing team, I lead this initiative for them. The idea is to develop synergistic relationships that are mutually beneficial - to look for areas of deficiency in your competitors and think of ways your company can fill the void.

Some tips to keep in mind when looking for potential "profit" partners:
· Do your homework. Find out, in advance, who will be at industry events that you'll be attending. (Check the program for speakers, vendors, and participants.) Sign up for their e-newsletters. Read their promotional e-mails. Maybe even purchase some of their products.
· Look at EVERY opportunity as a way to maximize your company's brand. When you go to industry events, don't eat dinner alone in your hotel room. Go to functions. Mingle. Network. Have a genuine conversation with a potential partner... then, if there's a synergy between your two companies, exchange business cards.
· Before you contact a potential partner, get familiar with his products and target audience and figure out how your company may be able to dovetail with his product line or marketing efforts.
So, once you've made the connection, now what?

Reciprocal Ad Swaps

Assuming you both have e-newsletters, you can test the waters and see how your lists will react by doing an advertising swap. In other words, you run an ad in his e-newsletter and he runs an ad in yours.

To make sense out of the results of that test, you have to know your "opportunity cost" - the "cost" you will incur for running an outside ad to your list instead of your own ad. If you normally sell ad space in your e-newsletter, this cost could simply be the flat rate fee you typically charge. Or, if you know the average revenues an issue brings in, you could calculate the potential "missed opportunity" of letting another ad run to your list on a given day.

You should also agree to share important information with your partner. Before his ad runs in your e-newsletter, point out any creative issues. (Perhaps the copy is too inflammatory for your list. Perhaps it's too competitive.) Provide your partner with your e-newsletter's sent and deliverability sizes, open rate, and ad click rate. Exchanging performance data is critical to a long and mutually beneficial relationship. It has to be a win/win situation for the partnership to work.

Whether your goal is to attract names for your e-list (lead generation) or to make sales, reciprocate in kind. If your partner is letting you do a name collection ad to his list, for example, let him run the same kind of ad to your list. But first make sure his list is approximately the same size as yours. If it's substantially smaller, you may want to hold off on an ad swap with that publisher until he builds his subscriber base. You don't want the initiative to be one-sided.

Guest Editorials

You can also look into doing guest editorials in other publishers' e-newsletters - with an editorial note or byline that links to your offer. This is a great way to get introduced to a new list with the "implied" endorsement of the publisher. His endorsement gives you credibility. And if you provide his readers with good, solid, useful information, they will bond with you quickly.

This is a soft-sell approach that may or may not yield results on its own. But when coordinated with either a dedicated e-mail (if your partner is on board with a revenue split) or an e-newsletter ad the same week, your conversion rate (the number of people who go on to buy your product) will dramatically improve.

Joint Ventures (JVs)

JVs are a quick and cost-effective way to make money with your list even if you have not yet developed any products. With a JV, you have an instant product line with no overhead costs. Your partner will supply the products, fulfill orders, and provide customer support. All you have to do is promote the products to your list and split the net revenues with them. For an even a more turnkey approach, you can sell e-reports through sites like Clickbank.com, where everything is automated.

To determine the viability of a potential JV product, there are several strategic marketing variables to consider. I like to think of them as "PPPGS":

P = Product quality
P = Price point
P = Performance (when promoted to your potential partner's house list, as well as to outside lists)
G = General market demand
S = Subscriber interest (when promoted to your list, as determined by feedback, surveys, etc.)

Remember - you're looking for long-term partners, not one-hit-wonders. So carefully select the people you approach, making sure their products make sense relative to your business...and, together, you can reap the unlimited profit potential of reciprocal marketing!

13 Ways to Watch Your Budget on Summer Vacation

As community-sized financial institutions, we're all about saving our customers/members money, right? Beyond providing great rates, we need to show that we care about every aspect of their finances.

Show that you understand how important it is to stretch every dollar during these long, hot summer months. Here are a few tips to share that will save on your customers/members Summer Vacation:

1) Save for summer all year long with a dedicated Savings Account. By putting aside $100 per month, you can have $1,200 for vacation in one year.

2) Create a budget for vacation. Break it into categories for each anticipated expense like hotel, food, entertainment and gas.

3) Review each budget category and find ways to trim it.

4) Try to make your own meals whenever possible. Eating out gets expensive and family picnics may be the most memorable part of your summer.

5) Stay with friends and family when possible. You’ll save on the hotel cost and sharing with friends and family adds to the fun.

6) Instead of an expensive vacation this year, why not try a “staycation.” A trip to the local zoo or amusement park is infinitely less expensive than a Florida sunburn.

7) Even if you travel, find free entertainment like museums, beaches and hiking.

8) Find free or low-cost activities for your kids. Start with the schools, rec. center, local parks or the YMCA. There are tons of fun and educational activities for the kids right here in town.

9) Split vacation costs with another family. Rent a condo or vacation home and spilt gas money.

10) Do your research. There are many online coupons and discounts.

11) Switch to a credit card with a lower interest rate. There’s no sense collecting air miles or other such perks with a high interest card if you can’t pay off your balance each month. Transfer it to a lower interest credit card at your institution.

12) If you and your friends have young kids, consider setting up a babysitting co-operative with another family. You look after their kids for an evening in exchange for a night out at a later date.

13) Cancel your gym membership. As the weather gets warmer, go for a walk or run around your neighborhood instead. You don’t need to spend $50-$150 a month to stay active.

I'd love to see some interactivity with this blog, folks ... and I know y'all are creative! If you have any ideas to add to this list, jot them down in the "comments" section.

Take care, Eric

Analyzing the ROI Formula - Part 3

This post concludes my discussion of the individual components of the formula used to calculate the return on investment (ROI) of marketing activities and programs.

The basic ROI formula is:

ROI = (Gain from Investment-Cost of Investment) / Cost of Investment

In earlier posts, I've discussed the Gain from Investment and the Cost of Investment components of the ROI formula.  Although it's not explicitly included in the formula, time is the third component of the calculation.

ROI is always measured over a specified period of time.  The goal is to select a time period that will enable you to capture an accurate view of the stream of profits and expenses that are attributable to a marketing investment.  A time period that is too short will cause the ROI to be understated, and this may cause you to not go forward with proposed marketing programs (or eliminate existing programs) that produce significant value over the long term.  If the time period used is too long, the accuracy of the ROI calculation may be diminished because of the uncertainty that is inevitably involved in forecasting profits and expenses for distant time periods.

When specifying the time period to be used in an ROI calculation, marketers need to focus on several issues.

• Over what period of time will the marketing campaign or program have an impact?  The time period used does not need to extend past the point where most (85%-90%) of the value and costs are captured.
• How much uncertainty exists regarding future value and expenses?  If the degree of uncertainty increases substantially over time, marketers should use a time period that permits reasonably accurate forecasts.
• What are the company's profit priorities?  Some companies rely on short-term cash flows to remain viable.  Such companies are naturally more interested in marketing programs that produce short-term results and, therefore, are more interested in short-term ROI.

To illustrate some of the issues that surround the selection of the correct time period for measuring ROI, let's look at two different situations.

Suppose that you are a retailer and you decide to send your existing customers a direct mail piece that includes a discount coupon.  Customers must present the coupon in order to receive the discount.  From past experience, you know that 95% of the coupons that are redeemed will be used within 90 days of the date of the mailing.  Therefore, it would be appropriate to measure the ROI of this marketing program over a period of 90 days.

Now suppose that you are a software company that provides warehouse management software to business customers.  You decide to market the latest version of your software to prospective customers using an integrated direct mail and e-mail campaign.  Because warehouse management software has a long sales cycle, your marketing campaign will involve several direct mail pieces and several e-mails sent over a period of several months.  Companies that buy your software pay an initial licensing fee and monthly support fees.  From experience, you know that once a company buys your software, they will remain a customer for an average of seven years.  Therefore, in order to get an accurate measure of the ROI of your marketing campaign, you would need to measure ROI over a seven-year period.

One final point about the role of time in measuring marketing ROI is that both future profits and future expenses must be converted into present values.  This is accomplished by "discounting" both future profits and future expenses.  The discount rate is typically set at the company's cost of capital, which marketers usually obtain from the company's chief financial officer.

Is Traditional B2B Marketing Dead?

Earlier this week, I was on a panel at the WIT event "The Intersection of Marketing & Technology" in McLean, VA. One of the discussions was about the dramatic changes happening in B2B marketing today and what the future will hold. The question "Is traditional B2B marketing dead?" ignited a lively discussion.

I think we are experiencing nothing short of a major disruption in marketing today. New technologies and marketing automation are just one expression and a driver of this change, but it goes much deeper, affecting the way we organize marketing, engage with customers, find new business opportunities, and deliver value to the stakeholders inside and outside our organizations.

It is easy to not see the forest for the trees when you are focused on the daily challenges of program execution. So let's take a step back and look at the big picture. I put together an overview of the key dimensions of B2B marketing that I see changing (see below, click image to enlarge). Every dimension (including balance of power, audience focus and presence) has significant implications on the way we plan, organize, and execute B2B marketing going forward. And before you say "wait a minute", of course this isn't a binary, all or nothing switch from one model to the next. Instead we are seeing a classic adoption pattern with early adopters and laggards, false starts, and a mix of "traditional" best practices that are still applicable combined with new methods. What are your observations on the changes in B2B marketing? Please share your thoughts using the comments section below.

Is B2B Marketing Ready for Social Media? Take the Survey to Find Out...

B2B marketing is undergoing dramatic change. Traditional marketing tactics are losing effectiveness, and new tactics such as social media are still perceived as unproven. And while social media is a success story in consumer markets, adoption in B2B markets is still lagging.

The LinkedIn B2B Technology Marketing Community is conducting a comprehensive, vendor neutral survey of B2B marketing executives and professionals to better understand the state of social media in the evolving B2B marketing mix. The survey will answer questions about the latest social media trends in B2B marketing, what challenges managers face, what platforms and tools are considered effective, how companies measure success, and more.

The survey takes less than 10 minutes to complete. If you would like to receive a summary of the survey results to find out what your peers are doing with social media, please make sure to provide your name and email address at the end of the survey.

Follow this link to get started: http://www.surveymonkey.com/s/socialmediasurvey2010

Also, please feel free to forward the survey link to your marketing colleagues and friends (or just use the re-tweet button at the top of this post).

7 Foolproof Ways to Build Your Business This Summer (Or Anytime!)

The written word has the power to educate and inform... as well as create buzz about your website, product, or service. That's why with all my clients one thing is common -- I circulate their e-zine articles through multiple delivery channels also known as content marketing which has been refined and developed into a systematic approach via my SONAR marketing method, http://www.precisionmarketingmedia.com/sonar.html.

Reaching potential subscribers this way helps me increase readership for my clients and, ultimately, revenues. I am a firm believer in leveraging the marketing message too. By circulating it in multiple channels - online, e-mail, print, direct mail, and so forth - I am able to touch prospects through whatever medium they prefer. And for those who like to receive their information through more than one medium, the message is re-enforced every time they see it in another channel. I strongly encourage you to take this multi-channel marketing approach with your own online business.

Here are seven of the best and most cost-effective channels to include in your marketing plan:

1. Paid Search Ads (Pay-Per-Click)
Google and Yahoo are the Titans of the paid-search ad world, with nearly 70 percent of market share. But there are other search engines that have a loyal following, such as Bing (formerly MSN.com) (with 16 percent market share), AOL.com (with 9.6 percent), Ask.com (5.1 percent), Infospace.com (1.1 percent), and Lycos.com (0.9 percent). Pay-per-click (PPC) ads with any of these search engines is a cost-effective way to target prospects looking for your specific product and get broad exposure. You create a text ad, then bid on keywords (the words or phrases your target audience will be searching for) to determine your ad's placement.

PPC paid search ads are perfect for acquiring new customers. That's because leads that come in this way are searching specifically for your information (via targeted keywords). This makes them highly qualified prospects.

2. Organic Search Results (Search Engine Marketing)
Search engine marketing (SEM) has a nominal cost. Annual fees with search engine networks or directories typically range from $25 to $95 per year, but many submissions to top sites like Google, Yahoo, Ask and Bing are free.

Some consumers give organic search results more "credibility" than paid search ads. And because they "trust" the results of an organic search more, they are more likely to click on an organic link. A recent survey by Jupiter Research illustrated that 80 percent of Web users seek organic search results. Their rationale is that organic results are un-biased. The marketer didn't pay for that ad space. So the link's appearance in the search results is based purely on various search algorithms and Web crawlers.

Your goal should be to balance your online presence with both paid ads and organic search results. You should make sure you have keywords in all the right places. That includes your title tags, URLs, and inside the published articles themselves.

3. Banner Ads
Running banner ads on other websites can be another cost-effective part of your online marketing mix. The pricing model for this is typically CPM - a specified price for every 1,000 impressions/views you receive (usually between $3 and $10). Since contextual space is limited in banner ads, your headline and visual elements are critical for success. And of course, your landing page should have strong, persuasive copy.

Your media budget for banner ads will vary by:

-the website you're running (the higher the traffic, typically the higher the banner advertising rate) ad unit size/type (300 x 250 typically performs best, so those are priced higher than other ad units)
-location on website (home page, inside pages) whether the ad is targeted to a specific page or is on every page of the site (a/k/a run of site)
-the time of year the ad is running

Blogs and online ad networks are a cheaper alternative. Their CPMs (cost per thousand) usually ranges between $2 and $6, and they have a wider reach, although some networks may offer a universe of, lets say 20 websites, when only 5 websites are really considered "top tier".

Networks to consider: Advertising.com, ValueClick.com, and FastClick.com.

You can find a full list of sites here: ttp://www.imediaconnection.com/resourceconnection/adnetwork.asp.

Editor's Note: If you'd like to learn more about how to buy online media for less...I just finished writing a 25-page comprehensive eBook where I go into all the tips and tricks to conduct high performance, low cost media buys. If you're interested in purchasing a copy, please email support@precisionmarketingmedia.com and mention "muscle marketing" in subject line.

4. Reciprocal Ad Swaps
Some of your best resources will be your fellow publishers. This channel often gets overlooked by marketers who don't give it the respect it deserves. In the work I do for my clients, I spend a good portion of my time researching publishers and websites in related, synergisic industries. I look for relevant connections between their publications (print and online) and my clients.

Let's say I come across a natural health e-letter about that has a list of readers similar in size to one of my clients, who is a supplement manufacturer. Since many of their audience share similar interests, cross marketing each other products (or even lead gen efforts) can be mutually rewarding.

Swapping ads will save you money on lead-generation initiatives. Since you won't be paying for access to the other publisher's list of subscribers, you can get new customers for free. The only "cost" is allowing the other publisher to access your own list. It's a win-win situation. This technique also opens the door to potential joint-venture opportunities.

5. Co-Registration
Co-registration or co-reg is basically a method of acquiring leads or sales on another publishers' website after another transaction or registration process occurs.
Co-reg ads use a CPL (cost per lead) payment model. You pay for the leads you capture. Your text ad and a small image of your publication appear on a webpage on another publisher's website after a primary transaction occurs. Your ad shares the page with other publishers looking to build their own e-mail lists with free subscriptions to their e-letters or free e-reports.

To make this work, I've found that you need to send special introductory "bonding" e-mails to the people who sign up for your newsletter before they get added to the general circulation. This helps them remember that they signed up for your e-letter. (So when it shows up in their inbox they won't think it's spam.) And it helps increase the potential that those subscribers will convert to paying customers.For more about this channel, check out Andrew Palmer's ETR article about using co-reg to attract customers.

6. Direct MailDirect mail is still a consumer favorite - and another good way to get your sales message out. It can be especially effective used in concert with another effort, such as an e-mail campaign. A recent survey published in DM News indicated that 70 percent of respondents preferred receiving unsolicited correspondence via mail vs. e-mail.

As with any marketing medium, though, you can end up paying a lot between production costs, list rental costs, and mail shop/postage costs. The most costly direct-mail packages are magalogs and tabloids (four-color mailers that look like magazines). However, 6 x 9 postcards, tri-fold self-mailers, and simple sales letters are three low-cost ways of taking advantage of this channel. Note that copy, list selection and geo-targeting an be crucial for direct mail success no matter which cost-effective mail format you pick.

Although 100 percent ROI (return on investment) is what you should aim for, many direct mailers are content with 80 percent. This lower figure takes into consideration the lifetime value of the names that come in from this channel, because they are typically reliable buyers in the future.

7. Print ads
This is another channel that's gets a raw deal. One reason is because it can be costly. To place an ad in a high-circulation magazine or newspaper, you could shell out serious money. But you don't need a big budget to take advantage of print ads. If you don't have deep pockets, consider targeted newspapers and periodicals.

Let's say you're selling an investment report. Try using the Internet to research the wealthiest cities in America. Once you get that list, look online for local newspapers in those communities. These smaller newspapers hit your target audience... and offer a much cheaper ad rate than some of the larger, broad-circulation publications. You end up getting quality rather than quantity.

I once paid for an ad in a local newspaper in Aspen, CO that had a flat rate of less than $500. My ROI on this effort turned out to be more than 1,000 percent. How's that for a positive response rate!

The seven marketing channels I've just described can help you reach more customers... and eventually add dollar signs to your bottom line. So start the New Year off with a marketing bang. By leveraging the seven channels of multi-channel marketing, I'm confident you will be amazed by the results.

Analyzing the ROI Formula - Part 2

This post continues our discussion about measuring the performance of marketing, including the use of marketing return on investment (ROI).

As I have already noted, the basic ROI formula is:

ROI = (Gain from Investment-Cost of Investment) / Cost of Investment

Therefore, marketing ROI is calculated using two factors - the gain or incremental "profit" produced by a marketing campaign or program and the cost of that campaign or program.  My last post discussed the Gain from Investment component of the ROI formula.  This post will focus on the Cost of Investment component of the formula and discuss some of the issues this component presents when ROI is used to measure marketing.

Cost of Investment is the total cost of the marketing campaign or program whose ROI is being measured.  At first glance, this can appear to be an easy determination to make, and in some cases it will be.  For example, if you outsource all of the work required to develop and execute a particular marketing campaign, the investment in that campaign will be easy to identify.

In other cases, however, the issue becomes more complex.  For example, if creative elements are developed that will be used in multiple marketing campaigns or programs, how should these creative development expenses be assigned to the multiple marketing efforts?  What if you don't know how many times a creative element will be used?  Should the labor costs of marketing department staff personnel be treated as marketing overhead or assigned to specific marketing campaigns or programs?

The most important principle to use when assigning expenses to specific marketing campaigns or programs is that cost assignments should always be based on real-world cause-and-effect relationships.  In other words, the marketing campaign or function whose ROI is being measured must be the "cause" of the cost or expense.

As noted earlier, this principle can be fairly easy to apply in some cases, such as when expenses are incurred to pay outside contractors (agencies, designers, printers, etc.) for specific work on a specific project.  Internal marketing department expenses can be more difficult to address.  For example, if you employ graphic designers, it is appropriate to assign their labor-related costs to the projects they work on.  On the other hand, it may not be possible to assign the labor costs of higher-level marketing managers who perform more general marketing activities.  Often, these costs cannot be logically assigned to specific marketing campaigns and should be treated as overhead expenses.

Assigning costs to marketing campaigns and programs can become relatively complex, and marketers may need to obtain help from financial professionals in performing these assignments.  Assigning costs accurately is essential to producing accurate ROI calculations.

Challenges Make Us Sharper

It seems as if everywhere we turn these days, a crisis emerges. The real estate market, the banking troubles, the stock market yo-yo, unemployment, the European Market crisis, earthquakes, tsunamis, fires, and now the BP Gulf Oil crisis. It's starting to wear us all down. But if you look closer, we know that the human spirit can actually grow during times of great concern and even crisis. We are forced out of our comfort zones and challenged to think differently, ask new questions, formulate new strategies and plans, create new ideas and idioms that we've never known before. This is growth!
This higher level of awareness and heightened senses develops keener thinking. As bankers, we are looking at new regulations and challenging ourselves with creative ways to work within the guidelines, looking for new ways to show our commitment to customer clarity and understanding.
Reaching out to our customers with a new sensitivity to their financial concerns, their wariness of banks in general now, and their lack of empathy for our "problems", is a new requirement, a new way of communicating.
But I beleive this is a good thing. Troublesome and time-consuming, yes. But anytime we take a step closer to aligning what is best for our customers with what is best for us as bankers, it is a good thing.
I predict good things will come back to the banks and credit unions that take the time to develop more customer centric products, systems, and communications now. That's what we at MarketMatch have been promoting for a long time.
I would love to hear from you with some examples of the new ways of communicating or new products and services that you have developed as a result of the crisis and chaos thath we have been coping with since 2008. Email me at slovejoy@marketmatch.com.
Have a great week!
Sharon

Outsourcing: Make sure to consider the CONs as well as the PROs

A couple of weeks ago, NPR ran a story entitled "Everyone Else Outsources, So Why Can't the Arts?" Since that time, the story has stuck with me. One positive result of the global economic crisis is that it has forced mature organizations to rigorously examine business practices, many of which haven't changed since the publication of Danny Newman's Subscribe Now! I am consistently amazed at the number of organizations that choose to remain stagnant because change is scarier than doing nothing and watching failure creep up to the doorstep. I applaud organizations that are taking steps to inform the field, as successes and failures will provide beneficial data we can use to plan our next steps. And while I have been accused on many occasions of being too aggressive with implementing change, in this case, I am reminded of a saying that a wise professor in graduate school would always say to me--"just because it is new, doesn't mean it is better."

Let me begin by saying that I support the outsourcing of activities that involve highly specialized tasks. Even in large organizations, most of us are generalists with maybe an area or two of specialized training. In unusual circumstances, many times we need to draw upon an expert with a lot of experience in a certain area. As we approach the opening of the Mead Center for American Theater, I am working with several outside companies that we are outsourcing very specific tasks to including Boneau/Bryan-Brown, SpotCo, Target Resource Group, SD&A, Mires+Ball, Shugoll Research and Allied Live.

Although we outsource work to some of the best companies in the business, we wouldn't be successful unless we supervised their work closely. The best outcomes are usually a result of forming very tight partnerships between on site institutional managers and specialists at the outsourcing firms. One without the other usually ends with mediocre work. In fact, I can't remember a single instance in my career where I hired an outside firm and it removed as much work from my desk as I had hoped for.

In addition, as Russell Willis Taylor asks in the article, one must consider the opportunity cost of outsourcing, particularly in areas of customer service and development. For those of us lucky enough to have been TicketMaster clients in our careers, we know how hard it is to get outsourced sales agents on message and equipped to provide excellent service to our customers (I even tried delivering baked goods weekly to call centers). How can an outsourced entity be as passionate as you are about your institution, and isn't that passion crucial in developing fundraising activities? And we don't like to admit it, but in some cases, we are in competition with one another. In purchasing ads, setting up promotions, pitching stories to the press, calling in favors, taking advantage of remnant space--when you are working with 10-20 arts organizations in the same town, who gets priority when undoubtedly there will be times when the interests of these organizations conflict with each other?

I am eager to see how this experiment in Columbus pans out. To me, this model creates many more questions than it provides solutions, however I think they should be commended for taking an innovative step that I am sure will inform the field in the future.

Just a sidenote--I wonder what BP thinks of outsourcing its drilling rigs at the moment?

Product Management

How long has it been since your institution did a review of your products?

Many times because of mergers, acquisitions, etc. the number of products offered just seem to multiply! Either the organization doesn't have the in house talent to properly map products during the systems conversion or they simply feel the best approach is to "grandfather" the acquired/merged institutions products meaning the products aren't eliminated but are no longer being sold after the acquisition/merger is finalized.

Other times, institutions continue to add new products to keep up with the competition without determining the impact on their existing product line up.

The net result is that the institution doesn't have the proper "linkage" in their product line up.

Overlapping features and benefits make it difficult if not impossible for the sales person to identify the "right" product to meet their customer/prospects needs. The result is a less confident sales force. It also makes it difficult for the customer/prospect when they start their shopping process to determine if your institution has the "right" product to meet their needs.

If the products have distinct non-overlapping features and benefits, the sales process becomes much easier. Sales training becomes much easier. Brochures and merchandising become more effective. Customer/prospect needs are met and the net result is stronger household relationships and increased household profitability.

If you need help determining the "right" number of products and the proper "linkage" between products for you institution, MarketMatch can help!

Have a great weekend!

Mike

Post August 15th

OK, Bankers. On July 1, Reg E goes into effect with all new accounts.

It effects your existing accounts on August 15. And your customers/members need to respond to your opt-in request by August 11 to not be effected at the deadline.

So what then?

You have been frantically trying to educate and motivate your customers/members to get a response to your opt-in requests, but are you planning your post-August 15 strategy? Here are some tips:

Be Proactive:

Despite your best efforts to educate your audience, you'll be amazed by how many complaints you'll receive when transactions are declined.

Communicate with ALL "opt-out" customers who are declined immediately. Email is ideal because of it's speed, a phone call is also fast (but more time consuming), use snail mail is necessary - heck even smoke signal if that's all you have!

• Explain that you acted according to their wishes
• Explain that you've attempted several contacts to notify of change
• Provide an opportunity to opt-in to avoid future declines

Prepare the front line staff and call center

• Reiterate the Reg E basics to your staff (they must be comfortable communicating about the regulation)
• Arm your staff with a list of (better yet, samples of) all Reg E materials sent to customers
• Provide staff the tools to help customers opt-in for future transactions
• Provide the questions your staff must ask to be able to recommend opt-in vs. opt-out

Add Opt-in to your On-boarding program

• New account customers who decline opt-in at first should receive communication within their first 90 days with your bank/credit union
• Simply provide "real world" examples of what can happen with and without overdraft protection

Don't ignore your opt-out customers

• Cross-sell alternatives to overdraft like lines of credit or savings sweeps

This is a Commercial/SEG opportunity

• Educate local merchants about Reg E and it's likely effects (this can be an invitation-only on-site seminar and/or your Commercial/BD staff can go on the road with meaningful information)

- Stick to the basics - you're not talking to regulators or compliance people here!

- Make sure it's clear that this effects ALL institutions, not just yours

• Provide merchants with material to give to customers who are declined so they can contact you to opt-in

Roughly 27.4% of non-interest income comes from NSF/Courtesy Pay - nearly half of that from POS and ATM transactions. I've talked to several institutions with millions of dollars at stake and we're weeks away from the deadline.

Take care,

Eric

And so it begins...

Summer is here...

And so it begins!

The summer rush to enjoy the great outdoors, trips, family, baseball...its all about enjoying life and living each moment!  For you, your staff, AND your customers.

The need?  For you, your staff and your Bank/CU to put yourself in position to help your customers.  Debit cards, online banking, credit cards...even travelers checks.  I know, sounds very basic. However, it is also the moment of truth for you!  How?  Why?

Because you prove yourself OVER and OVER again to a customer...not just in the first 90 days, but each time they interact with you.  Do the LITTLE things well and the BIG things will come to you more often, faster and with less competition attached!

So, prepare your staff to be prepared to help your customers with the SMALL stuff...

Enjoy the start of summer...and enjoy watching your staff plant the service delivery seeds for a GREAT fall!

Cheers!

Bruce Clapp