How to Sell $38K of Subscriptions in 10 Days

If you’re a paid circulation magazine, you know that selling subscriptions online can be a challenge. However, I’d like to share an example of one publication that recently sold over $38K of subscriptions in just 10 days — and the subscription campaign strategy we used to do it.

If you run a paid circulation magazine, you know that selling subscriptions online can be a challenge. However, I’d like to share an example of one publication that recently sold over $38K of subscriptions in just 10 days — and the strategy used to do it.

The magazine we’re talking about isn’t a huge, national publication like Consumer Reports or America’s Test Kitchen. It’s actually a relatively modest, regional lifestyle publication and a member of CRMA (City and Regional Magazine Association).

The publisher’s website isn’t geared at all to drive subscriptions. They have no paywall in place, no digital subscription option, and no way to easily create effective landing pages. They also have an email/marketing automation system that is difficult to use at best.

Yet the team there overcame all of these challenges and, together, we ran a very successful campaign that generated $38K of subscriptions at an initial subscription price of only $11.

A Huge Boost in Paid Subscriptions

The magazine I worked with typically sells 10 subscriptions per day through various channels. However, during the campaign, that average jumped to 69 subscriptions per day … nearly 7x more. Look at the data and you can clearly see the day the campaign started and ended.

Subscription Campaign Success: Chart 1

In the 10 days prior to the campaign, the publisher sold $1,995 of subscriptions. During the 10-day campaign, however, they sold nearly $7,546 of subscriptions. So how does that equate to the $38K I mentioned above?

The publisher’s subscriptions include a non-optional, auto-renew program. That means that they don’t have to re-sell these subscribers every year. Thus, each auto-renew subscription is actually worth approximately $56 over the lifetime of the subscriber.

When you look at lifetime value, the magazine normally generated $5,620 in LTV revenue over a typical 10-day period. But during this 10-day campaign, they generated over $38,000 in LTV revenue … a 7x increase.

Subscription Campaign Success: Chart 2

How the Subscription Campaign Worked

The campaign offered a 50% discount on the normal annual subscription price and made it very clear that the offer was only good for 10 days. This combination of a steep price discount and the urgency of a limited time helped contribute to the campaign’s success.

But the other major factor was how well the publisher drove awareness of the discount and the limited time through all available channels that the magazine had: email, ads on their website, and social media. They also spent $1,000 in Facebook/Instagram advertising targeting a specific demographic in their geographic area as well as re-targeting website visitors and Facebook page followers.

Unsurprisingly, email was the biggest revenue driver accounting for 50% of the directly attributable sales. Ads on the publisher’s website drove 25%, with social media and Facebook/Instagram ads combining for the remaining 25%.

The Campaign Was Part of a Larger Strategy

It’s critical to note that this campaign was part of a larger audience development strategy that we’ve been working on for a while. The campaign wouldn’t have been anywhere near as successful as an isolated subscription sales effort.

The audience development strategy focuses first on building their email list. We create high-converting lead magnets that are promoted to their target audience with Facebook and Instagram advertising. Once an email address is captured, the person is then presented with an opportunity to subscribe to the magazine.

This allows the publisher to quickly build up their email list for free. They make as much money in year-one subscription revenue as they spend on advertising. When you take into account auto-renew lifetime value, the publisher actually makes money while building their email list.

Why is this important?

Their new email names converted at a higher rate than their old email names. The publisher’s pre-existing email list was larger than the new, lead-magnet-generated email list. But the new names converted to paid magazine subscribers more than 3x better than pre-existing names.

What’s Next?

While this campaign was off-the-charts successful, it’s not something that can be done more than a couple times per year. If you do it more often than that, you will condition your audience to wait for a big sale and campaign response rates will fall off dramatically.

Working with the publisher, we plan to do this type of campaign a couple times each year. In the interim, we’ll continue to build out their email list rapidly. They’ll add more evergreen lead magnets and will continue to promote them via Facebook and Instagram. We’re also testing the response rate of other programmatic networks like Google, Taboola, and Bing.

This strategy works with paid circulation publications, e-commerce sites, or membership sites. It can even be adapted for controlled circulation publications with some modifications. It takes work, patience, the right tactics, close monitoring, and perhaps some system changes. But the right combination of ongoing email list development and focused, intense subscription campaigns is a powerful combination for any publication.

Financial Institutions Can Put Artificial Intelligence to Much Better Use

I’ll start with a potentially controversial statement. Banks are misallocating their investment in artificial intelligence and predictive analytics by putting it into consumer-facing chatbots, rather than using it internally to empower their staff to understand and better serve the customer.

I’ll start with a potentially controversial statement. Banks are misallocating their investment in artificial intelligence and predictive analytics by putting it into consumer-facing chatbots, rather than using it internally to empower their staff to understand and better serve the customer.

Most customers don’t like speaking with bots and usually call their bank when they have an issue that requires processing that’s beyond what artificial intelligence can currently offer. In fact, AI’s reputation has been damaged virtually beyond recovery by the endless loop most customers encounter when they call the bank, not able to get to where they want to go.

Moreover, you don’t see pictures of chatbots pinned up in banks with “Employee of the Month” emblazoned across the bottom. Nor was any new business won on the strength of a chatbot’s performance. Finally, customers don’t stay with banks because they developed a great working relationship with a chatbot. Truth of the matter, chat hasn’t reached the level where it’s consistently reliable for addressing the customer concerns that rise to the level of making a call to a financial institution.

All that said, artificial intelligence is a highly powerful tool. How it’s being used is simply being misallocated. So the question becomes, is there a way banks can use it to enhance human engagement with clients? The answer is, “Yes.” Although banks and other financial institutions are in a completely different line of business than, say, a luxury retailer or car dealership, what they have in common is that critical need to engage customers at various points in a given transaction. This applies to banks and other financial institutions at least as much as it applies to other businesses. Reaching out to, connecting with and maintaining relationships with customers, and doing it well, is a key consideration. Done well, banks have a better chance of securing a higher lifetime value from their clients when they get it right. And it’s much harder for bankers or advisers to know about the hundreds of products that are available to them; far more so than, say, a car salesman at a dealership, or an associate in the dress department at Saks. AI’s best use is providing them — the customer-facing bank advisers — with the tools to have the right information for the right client, so they can spend more time on the customer relationship.

There are ways in which the power of predictive analytics can be brought to bear immediately, creating a more substantial and recognizable benefit for both financial services providers and their customers. A knowledge-driven approach to cross-selling and upselling is one such strategy.

There’s a vast range of training, tools and processes that can positively influence engagement efforts. But predictive analytics can push these initiatives into a much higher gear, providing a uniquely powerful impact when it comes to solidifying those all-important bonds with customers. Through better analysis and use of data that’s already available to most financial institutions in petabytes, it’s possible to learn more about customers, and consequently offer them more relevant service, support and product options. The right, internal approach to applying predictive analytics, therefore, results in benefits for both customers and the financial services providers they work with — a true win-win situation.

Historically, banks — especially large ones — tend to lean more toward conservative, careful approaches to new strategies and technology than quick movement and adoption. Given the mound of compliance mandates that govern their every engagement, this is understandable. But it but can be a significant drawback. This is where predictive analytics can sharpen their game. Many institutions have demonstrated a resistance to adopting this specific tool, or have used it in a very limited way. But they’re missing out on the benefits. And understanding the inherent pitfalls in predictive analytics is key to achieving success in deploying it.

How Financial Institutions Can Effectively Deploy Predictive Analytics

It’s a given that cross-selling and upselling help create more lifetime value from customers. But finding strong connections between products and clients is still a complicated process; particularly when you have to juggle moving parts, such as customer credit scores, income, credit utilization, and the like. Figuring out what products you can sell to whom, and predicting what those outcomes will be, constitutes a successful cross-sell. When done correctly and ethically, cross-selling can ultimately strengthen the customer relationship into a lifetime value — read, profitability — for the bank. This is because they’re able to match a product that was needed with a demand that they’ve identified.

It’s 20/20 hindsight, but we all know about the debacle of Wells Fargo’s unethical cross-selling and upselling, and how much trouble it got into as a result. With upselling, predictive analytics can really make a difference in the campaign to upsell. And unlike the Wells Fargo situation, this approach is sustainable. Looking through vast amounts of consumer data can help banks to understand how relationships have historically evolved between the bank and its consumer over time. On the consumer side, the spotlight is on how their data is being used. Only by robust analysis of customer behavior — ideally where multiple products are being offered — can banks regain their customers’ trust that their data is being used to benefit them.

Predictive analytics platforms can conduct this type of analysis, leaning on demographic information, as well as purchasing and financial data that institutions already have from past customer activity. All in real-time. Such an analysis would be prohibitive in terms of time, were trained experts to do the crunching. The predictive analytics tool can then offer sharply defined, personalized, relevant recommendations for staff members to share, while they continue to provide the critical human element in the cross-selling and upselling processes.

Where does this data come from? The sheer volume of payments data that banks gather, whether credit card, utilities, rent or many more — can inform what financial product the customer might be looking for and can afford, creating a sharper, more relevant offering. And that’s where artificial intelligence and predictive analytics can play a role that helps bankers sharpen their game and engage more successfully with their customers, without throwing them on the mercy of the bots. Incidentally, it also proves the notion that artificial intelligence is less about displacing humans and more about helping them perform higher-value work.

Securing profitable customers — back to the lifetime value concept — is job No. 1 for banks, whether small or large. Successfully cross-selling — truly matching a product with an identified need — goes a long way to strengthen that customer relationship. The current financial services landscape is ripe for improvement through the use of predictive analytics. Many institutions are already using advanced analytics, tied to marketing and basic interactions — but few have developed strong processes that focus on understanding customer habits and preferences. From there, they can use predictive tools to become more relevant, valuable — and humanly available — to their clients. The institutions that manage to do so will have an advantage in building stronger, longer-lasting relationships and will enjoy the increased value that comes from them.

With thanks to Carol Sabransky, SVP of Business Development, AArete, who made substantial and insightful contributions to this article.

Denny Hatch Takes on a Direct Brand With Direct Marketing

Harry’s is what’s now classified as a direct brand. But is traditional direct marketing more powerful? Politically correct or not, “It ain’t over till the fat lady sings” reminds us that the piece we write today may be chuck full of insight and wisdom now, but demands a fresh new look only a few milestones down the road.

Harry’s is what’s now classified as a direct brand. But is traditional direct marketing more powerful? Politically correct or not, “It ain’t over till the fat lady sings” reminds us that the piece we write today may be chuck full of insight and wisdom now, but demands a fresh new look only a few milestones down the road.

Denny Hatch’s name should not be an unfamiliar one here. Former Target Marketing editor, blogger and general gadfly, Hatch retains the mantle of data-driven marketing’s provocateur, par excellence, now sadly deprived of his joy at being able to limit his writings to twice the number of characters of the original Twitter. His new marketing blog is full of good stuff.

For his recent 700-character, “Getting Your Prospects to Say ‘Yes’ ” piece, he has turned his sights on Harry’s, the upstart direct-to-consumer razor company featured in this Maverick space almost a year ago. At that time I asked you, our readers:

Will the powerful copy and offer, the Harry’s against Goliath approach, go viral or sufficiently viral to extend the reach of the promotion well beyond the media that has been paid for? Will it bring the cost of trials and conversions down low enough to be “affordable,” attracting customers whose loyalty generates sufficient lifetime value to amortize the total marketing costs over that lifetime and let Harry’s end up with more than a sustainable profit?

direct brand Harry's
Credit: Peter J. Rosenwald

Although headlined, “Make Your Bet on Harry’s or Goliath,” readers were only asked whether they believed that the soft, brand-focused approach would be enough to build a loyal and profitable client base. This direct brand ad and similar treatments break all of the DM101 rules and, because they keep appearing, either they are driving a satisfactory response or, sooner or later, the remains of Harry will be marketing history.

The Denny Hatch traditional direct marketing answer to the “will you bet your money on Harry?” question is a snarling “no.” And he is willing to put his “cheek” (so to speak) where his money is, by offering Harry’s a Denny original, an ad designed to test the “on your face” Free Trial offer against the company’s editorial lede with the same Free Trial offer.

Hatch’s proposed direct marketing ad, seen here, is a classic old school mail-order: “FREE,” “GUARANTEED,” “No Cost,” “No Risk,” “No Obligation.” The call to action couldn’t be improved: “CLICK HERE FOR NO-RISK FREE TRIAL.” And the copy appears to be signed-off by a real person. It’s got everything.

direct brand vs. direct marketing ad
Credit: Denny Hatch’s Marketing Blog by Denny Hatch

But is “everything” what moves today’s consumer, or is the intriguing narrative about changing a $13 billion industry better attuned to today’s sensibilities? Problem is: Will we ever know the results? At this writing, Harry’s soft-focus direct brand ads are everywhere I seem to go on the web.

If Harry’s would run a valid split test of Hatch’s direct marketing ad against one of its regular ads, we would know which one had the better clickthrough. And if we waited long enough, we would know which would have the better lifetime value. (A parenthetical aside: The trouble with measuring lifetime value is that, theoretically, you have to wait until everyone is dead. That’s likely to be longer than you care to wait.) Hopefully, we’ll be able to get some data in this case and share it with you sometime in the future.

When there is more to come, journalists advise you to “watch this space”!

The LTV of My GTI Is Tied to My NPS

Buying a new car is a big deal for most of us. Once we get the notion in our heads, we actually start watching car commercials, notice what other people are driving, think about what we hate in our current vehicle that can be “fixed” in our new one, read online reviews, seek out the advice of others, etc. Bottom line is, it’s probably the second biggest purchase you’ll make (next to a house), so you’re a little more thoughtful about the process.

Source: Pixabay
Source: Pixabay

Buying a new car is a big deal for most of us. Once we get the notion in our heads, we actually start watching car commercials, notice what other people are driving, think about what we hate in our current vehicle that can be “fixed” in our new one, read online reviews, seek out the advice of others, etc., etc. Bottom line is, it’s probably the second biggest purchase you’ll make in a while (next to a house), so you’re a little more thoughtful about the process.

And while the fun of shopping for something new is always fabulous, the real proof-of-concept comes when you take that baby in for its first service check-up. Now that they’ve made the sale, how well does the brand treat you to ensure you’ll keep buying from them again and again? As a marketer, this is where the rubber hits the road … forget all the carefully crafted content, emails with offers, and direct mail packages about recalls or tune-up reminders. It’s the visit itself that makes or breaks your relationship with the brand.

Two years ago, when the last of my kids was headed to college, he needed his own set of wheels. But instead of buying him something used by a stranger, I decided to give him my 10-year old Acura and get Mama a little somethin’ new to spin around town. I wanted something sporty and fun to drive and considered a MINI, but after a test drive, found it a little too low to the ground for all the potholes in my area.

After getting a ride home from a friend one night, I fell in love with her Volkswagen GTI. It was good looking, roomy on the inside and gas efficient. So I headed to the VW dealer with my list of demands.

Tony probably couldn’t believe his luck when I rolled into his showroom on that fateful Saturday: I wanted a white VW GTI, 6-speed stick on the floor, black leather interior, sunroof. He made a quick call and my dream car was driven up to the door outside his office, 2 miles on the speedometer.

If I said I peeled rubber out of that parking lot, would that sound too braggartly? I love driving a stick shift, and Tony clung to the hand rail as I zoomed around a few tight corners and headed out to the open road.

SOLD! I negotiated a few extras (including a 3-year service package) and was out the door in two hours with my new toy.

At 5,000 miles I sauntered back in for a tune-up. Everything was good and I was back to terrorizing the roads.

I got a recall notice about some part around 9,000 miles. Booked an appointment, but received a call that the part wasn’t in yet, and they’d call me back. Never heard from them again.

At 15,000 miles, I was due for another tune-up, so I booked an appointment and watched as my “check engine” light came on two days before my scheduled day.

The problem really started when I got a call around noon telling me my car was being washed and would be ready to be picked up after 2 p.m. At 3 p.m., they called to say another warning light had come on, and they were checking it out. At 4 p.m., they called to say they couldn’t figure out what was wrong and needed to keep the car overnight. That’s always a big hassle, but I quickly made other arrangements. I called in the morning to check-in. Sorry, the car still wasn’t ready. I called at noon … sorry, still not quite ready. They called me at  2 p.m. to tell me it was ready, but I was busy, so my husband volunteered to pick it up.

The next morning I climb back into my baby, but in the middle of a 30-mile drive away from the dealership in a blinding rainstorm, an emergency message flashes at me on my dash telling me my tires were underinflated. Wha–?!?

I start to sweat. I call the service guy on the phone, tell him my issue and he, of course, says, “Why don’t you just stop by?” Um … because it’s INCONVENIENT.

I finally get back to the dealership by 4 p.m. and after a 30-minute wait, I’m told the tires were okay after all … somebody in the service department hadn’t reset the computer in my car after they were rotated. Grrr …

24 hours later I get an email from “Sandy,” the woman at the dealership in charge of customer care. She advised me that I would be getting an email from VW Corporate, and wanted to make I would be rating my experience as “extraordinary.” Since you and I both know that the dealership probably has a target Net Promoter Score (NPS) and my service rating would not be “10” I decided to email her back. I carefully recounted my experience, step-by-painful-step, and told her my experience would rate far less than “extraordinary.” I had barely hit “Send” when my phone rang.

Sandy was extremely apologetic and dismayed over my experience. Not only did she thank me for taking the time to respond, but she claims she ran it “upstairs” and was authorized to give me $500 off on my next service appointment. That’s all well and good, but since I have a service plan, that doesn’t help me at all … “No problem!” she exclaimed. Use the $500 towards new tires, or floor mats, or whatever my little heart desired.

Is this “gaming” the system? Is her interference between my experience and the corporate research team changing the way this dealership is ranked and scored on customer service? Probably.

Will I give them an “extraordinary” rating? I’m still not sure. I’m worried that if they found out I gave them 8 out of 10, they might take my $500 away from me. For now, I’m just idling …

The Keys to Customer Success

How far are you willing to go to make sure your customers are successful with your products or services? It’s a different way of looking at marketing, but it’s essential to building strong relationships and repeat business.

How far are you willing to go to make sure your customers are successful with your products or services?

It’s a different way of looking at marketing, but it’s essential to building strong relationships and repeat business.

http://players.brightcove.net/2045965075001/ryzbDLTP_default/index.html?videoId=4430168640001

Customer Success? Not Don Draper’s Problem

Traditionally, marketers are focused on convincing customers to believe something, and it’s almost always an idea that will help sell the product.

It’s the part where Don Draper gets up, takes a slug of whiskey and says, “It’s not a slide projector, it’s a time machine.”

Then Don walks away, content knowing that once someone buys the product, whether or not they are successful in “time traveling,” it is 10,000% not his problem.Don Draper Doesnt Care About Customer Success

Only it is your problem, because if your customer is not able to use your product or solution successfully, they’re not likely to buy again, or say good things about the product to other potential buyers.

That makes customer failure a silent killer of lifetime value.

And it’s a difficult problem to address because the issue is often less about your product and more about your customer’s understanding of how to use it.

If you sell someone software to, say, do their own taxes, and they’re happy with the software but in the end they still aren’t able to do their own taxes, next time they’re not going to buy the software, they’re just going to go to an accountant.

Beyond Satisfaction

This isn’t about customer satisfaction. Customers can be satisfied that they got what they paid for, even if they aren’t able to use it successfully.

Yes, I am saying your customers may not be competent to use your solutions. The question is, what do you do about that?

How far are you willing to go to ensure customer success?

Building Your Brand Religion

Even with the most finicky of customers in an increasingly chaotic and complicated world, lifetime value and brand loyalty can still be achieved. But not how you might think. It’s not the loyalty programs, frequent purchaser points (only 35 percent enrolled redeem these, per Forrester Research), and free gifts that stack up the purchase orders for a given customer. And it’s not the great service that can be matched by your competitors, either. It’s something much deeper. The same something that keeps the church pews warm, tithing coffers full and baptismal fonts busy.

Even with the most finicky of customers in an increasingly chaotic and complicated world, lifetime value and brand loyalty can still be achieved. But not how you might think.

It’s not the loyalty programs, frequent purchaser points (only 35 percent enrolled redeem these, per Forrester Research), and free gifts that stack up the purchase orders for a given customer. And it’s not the great service that can be matched by your competitors, either. It’s something much deeper. The same something that keeps the church pews warm, tithing coffers full and baptismal fonts busy.

The secret to lifetime value and referrals from your customers is really no secret at all. It’s simply the psychology of hope, loss and rewards, and trust that has made religion the biggest industry worldwide. Without question.

Consider:

If loyalty were dead, all of this money could not be generated from the millions of loyal believers who give up, on average, nearly 3 percent of their annual incomes to their religious faiths. If you take just U.S. wage earners with an annual income of $40,000, that comes up to about $93 billion a year in tithing—the equivalent in revenue for the worldwide video game industry in 2013, according to Gartner Research. And you wouldn’t have nearly 44,000 people attending a single group’s service on Sunday where the only product being sold is hope.

While we direct marketers are clearly selling more than hope as we peddle tangible products and services to millions of customers each year, our marketing ROI could truly become divine if we follow even just a few of the tenets from religious psychology. The primary tenets or cornerstones of all successful religions are:

1. Hope or faith in a better life (in this case, an afterlife);

2. Trust in your leaders to guide you with integrity;

3. A sense of community, or like-minded souls who have the same values, ideals and beliefs; and finally,

4. A fervor so strong about your beliefs that you are willing to spend much of your time on this earth spreading your faith’s gospel and bringing others into the fold—all on your own time, at your own expense and without any pay (besides the joy of knowing you brought eternal joy to others).

These are the same four cornerstones that make for successful branding and must be present in any brand’s marketing programs today.

Hope: All products are emotional purchases—your car, life insurance, clothing, furnishings and even food. Each time you swipe that payment card, you are doing so with the unconscious hope of gaining some intangible value associated with that product. Be it status, safety, reliability, an image that will attract romance or job opportunities for you, or a break from the fear of failing your children, spouse or job. What is the hope associated with your products? And yes, this applies to both B-to-B and B-to-C.

Trust: I’m not sure if there has even been a lower level of consumer trust for big brands as there has been in the past decade. Regardless of what industry you are in, trust is fleeting and hard to get, even for a small moment in your customers’ lifetime. Consumers are eager to find brands they can truly trust to stand behind their promises and products, and to actually put consumers’ interests, and those of the community at large, ahead of their own. There a few who do that well. Tom’s shoes is a great example. Even though the company sells a pair of shoes for around $65 which costs it $9 to make—earning it a profit of around $56 a pair—people love and trust Tom’s, because it promises to donate one pair to a needy child for every pair sold. And Tom’s produces evidence that it really fulfills this promise. The leaders of Tom’s shoes are right up there with the rich pastors of the world for selling hope that the world can be a better place, providing people with a means to make it that way, operating with integrity and cashing in on millions at the same time.

Community: Also known as “congregations,” we flock toward people with like values to feel safe, validated and empowered. Many people lose their faith at some point in their lives and question the religion of their childhood, and a large number of these fallen-from-faith adults stay true to their religion at the cost of losing a community of support, friends and a trusted network to be there when they are in need. Leaving is too high a price. The same applies to brand communities. Brands that bring consumers together for events or group discounts like “Family and Friends” create unbreakable equity as consumers pay a price to switch that is far higher than money, in many cases.

Evangelism: We love telling friends about a great purchase and then getting great satisfaction (really, decision validation) when they buy the same thing. It is our innate need to know we are making wise choices that others believe are wise, as well. This is particularly strong when it comes to our faith. The Mormons are famous, partially due to the recent Broadway musical, “Book of Mormon,” for their aggressive missionary program—whereby they have 80,000 missionaries evangelizing all over the world paying their own expenses, and working for free to build the church’s membership base. Why do they do it? Because they truly believe they have found the secret to a happy life and an even better afterlife, and they are compelled to bring others into their joy. This same need to share sources of personal joy with others applies to customers. Like religions, brands just need to create the tools to make it easy to do. Religions like Mormonism and Rick Warren’s Saddleback Church have a book that members share with others. Religious-like brands have discounts and free trials for loyal customers to share freely.

When you find the right tools and provide the right incentives to your loyal customers, you can engage free marketers for your brand who will work on their own time, at their own expense and for the reward of knowing someone else loves your products, too! Seriously, what more can a brand want? (Other than a tax exempt status!)

As you start a crafting a new marketing plan, throw out the four Ps and starting focusing on the above “Four Cs”—the cornerstones of your brand’s religion—and see how quickly you reap the rewards in this lifetime (and the next!).

Don’t Get Lost in a Maze of Metrics

There’s a lot of data out there. More than any one marketer needs at any one time. The new frontier in using big data in multichannel marketing is learning what data you need. And that starts with clearly defined marketing objectives. The proliferation of data has caused many marketers to get caught up in minutiae that are not relevant to their objectives. With all the data that’s available, it takes discipline to focus only on the metrics that are relevant. Too often the most important metrics like cost per acquisition and customer lifetime value are overlooked while we’re looking at things like email bounce rates and time on site, which certainly have their place, but should be viewed in the context of how they can be leveraged to improve lifetime value.

There’s a lot of data out there. More than any one marketer needs at any one time.

The new frontier in using big data in multichannel marketing is learning what data you need. And that starts with clearly defined marketing objectives.

The proliferation of data has caused many marketers to get caught up in minutiae that are not relevant to their objectives. With all the data that’s available, it takes discipline to focus only on the metrics that are relevant. Too often the most important metrics, like cost per acquisition and customer lifetime value, are overlooked while we’re looking at things like email bounce rates and time on site. Those are metrics which certainly have their place, but should be viewed in the context of how they can be leveraged to improve lifetime value.

How Many Metrics Do You Need?
Every semester, more than one student in my “Advertising Research” class asks:

How many questions do we need to have in our quantitative questionnaire?

My answer is always the same, and always initially perplexing to them:

As many as you need.

The ensuing discussion is a lesson in the importance of setting clear objectives:

What are you trying to find out? Write down what you need to learn from your survey, and develop questions that will get you that information. Once you’ve done that, count the number of questions you have. That’s how many you need.

That lesson applies to marketing measurement, as well. With all the metrics that our marketing analytics platforms can provide, it’s easy to get buried in a landslide of statistics that don’t really relate to your business objectives. If your objective is lead generation at a landing page, why measure time on site? (Of course if you find that the abandonment rate on the data capture page is high, then look at time on site. You may be asking for too much information.)

Define What You Need to Know
If you’re looking to optimize your cost per lead or maximize lead volume, you’ll need to track cost per lead by individual tactic. You’ll find an interesting approach to maximizing lead volume in a previous “Here’s What Counts” post. But if you’re looking to enroll people in a CRM program and every one of your touchpoints is essential, then you may be able to skip that level of analysis. (If that idea seems foreign to you, check out this “Here’s What Counts” post that talks about a real world scenario where it wasn’t necessary to track cost per enrollment by vehicle.)

Every end has a beginning. Measurement always starts with the objectives you set at the start of a campaign. If they are clearly defined and you focus only on those metrics that are related to the objectives, you won’t find yourself buried in data that’s not relevant to measuring your success.

How Much Is Your Email List Worth?

Every good direct marketer knows the top company asset is the customer database. Almost anyone with marketing experience can turn that data into revenue. I say “almost” because there is still a social media movement trying to prove that direct mail and email marketing is dying. It’s doubtful that anyone in that group could create and execute an effective plan that delivers sales and profitability. But, for the rest of us, the people who understand that customer relationships are about the quality of service, a solid list is money in the bank

Every good direct marketer knows the top company asset is the customer database. Almost anyone with marketing experience can turn that data into revenue. I say “almost” because there is still a social media movement trying to prove that direct mail and email marketing is dying. It’s doubtful that anyone in that group could create and execute an effective plan that delivers sales and profitability. But, for the rest of us, the people who understand that customer relationships are about the quality of service, a solid list is money in the bank.

Direct mailers are very good at creating detailed plans that project sales and profitability down to the penny. When shifts in external factors like weather and politics affect sales, adjustments are made to keep the company operating in the black. Executing a direct marketing campaign requires a significant investment, making careful management necessary to corporate success. Customers and prospects are segmented, monitored and measured every possible way in an effort to increase lifespan and lifetime value.

Email Marketing Is Different
The investment required for email marketing is minimal when compared to direct mail. Returning a profit is so easy that marketers are lulled into complacency. When the revenue to cost ratio is that good, why invest additional resources in making it better? After all, there are always other areas that need more attention.

Email marketing can do so much more than generate revenue and profits. In the right hands, it increases customer loyalty and reduces operating costs. Emails offer the opportunity to create a personal connection that is unavailable in any other marketing channel. They can be used to economically provide high quality service on an individual level. Capitalizing on this requires in-depth analysis that begins with the value of email subscribers.

How Valuable Are Your Email Subscribers?
There is a direct relationship between the quality of your email marketing program and the value of your subscribers. Programs that build relationships using personalized promotions, education and service create substantially higher value subscribers than pure-play promotional campaigns. This really shouldn’t come as a surprise to anyone because better investments always yield stronger returns.

The first step in creating high value subscribers is analysis. How do the customers and prospects that participate in your email program differ from the ones who don’t?

Compare purchase history, time from first entry to purchase, times between purchases, average order, lifetime value, lifespan, number of orders in specific time frames and any other valuation information available. Segment customers and prospects as needed so you will be able to consistently evaluate the results. Seasonal, discount, and hit-and-run shoppers significantly skew the results. The information accumulated here is the benchmark that will be used to gauge the effectiveness of new campaigns.

Next, catalog all of the emails sent to each segment over the last two years. Include all available results so new emails can be compared to historical data. If you haven’t been segmenting subscribers, or segmented them a different way, capture the information that is available and move on. Don’t waste resources trying to analyze something that doesn’t have enough data to provide clear results. When finished, you’ll have a good idea of the current value of your email subscribers.

Creating a New Email Marketing Program
The analysis you’ve done tells you what has happened in the past. If you are happy with the results, keep on doing the same things. But, if you want more:

  • Look for gaps in your email marketing campaigns. Do they include personalized emails? Are the transactional emails optimized? Are you sending educational emails that teach subscribers how to use products and services?
  • Are you emailing often enough? Test sending emails more often to a sample of your subscriber list. If response increases without a significant jump in opt outs and spam reports, roll it out. Well targeted emails that provide value to recipients are rarely rejected.
  • Use your email marketing to improve customer relationships. Invest time in understanding your customers’ problems and creating solutions. The more problems you solve, the less likely they will leave. Email is an excellent tool for creating unbreakable bonds because it is effective, efficient and economical.
  • Measure everything on a regular basis. The better your data, the easier it is to improve results. Consistently digging through the data provides insight into how your subscribers behave. The more you know about their tendencies, the easier it becomes to create campaigns that motivate them.

Wanted: Data-Driven, Digital CMOs

There was a time, not so long ago, that the firm’s CMO basically acted as the chief brand steward, running a marketing department that focused on maintaining brand equity and making sure the company was sending out the right message to the masses. Data and analytics? They were usually scoffed at … That was the purview of the down-and-dirty world of the direct marketer, right? Direct marketers were the ones who obsessed over response rates, cost per order, lifetime value and so on.

There was a time, not so long ago, that the firm’s CMO basically acted as the chief brand steward, running a marketing department that focused on maintaining brand equity and making sure the company was sending out the right message to the masses. Data and analytics? They were usually scoffed at … That was the purview of the down-and-dirty world of the direct marketer, right? Direct marketers were the ones who obsessed over response rates, cost per order, lifetime value and so on.

Well, suffice it to say that those days are over—marketing in today’s multichannel environment is about much more than just cute creatives and killer copy. Today’s marketing is increasingly digital and data-centric. A recent article appearing in Ad Age explained that “real-time data-driven decisions, enabled by technology, have made the marketer’s job much more measureable and accountable.” Interestingly, the same article also points out that the average tenure of a CMO is a meager 28 months. No coincidence.

What it boils down to is that today’s CMO is expected, de rigueur, to be a pro when it comes to all things digital. We have two important trends to thank for this fact. The first one of these trends is the general transition to digital. Look, it’s no secret that over the past few years there’s been an incredible shift of marketing spend from traditional over to digital media. It’s the scale and speed of this transition that’s so breathtaking.

According to a June 2012 survey by RSW/U.S., 44 percent of marketers report that they are now spending at least half of their budgets on social and digital media. This represents a 42 percent increase from 2009 alone! And this is not the end of the process. I think it’s safe to say now that the proverbial tipping point has been reached—this trend will only accelerate in coming years.

Anyone who’s worked in the digital marketing arena knows that success in the space all really boils down to data: Impressions, clicks, conversions, opens—this is the vocabulary of the digital world. Well, guess what? Today’s CMO needs to have a deep understanding of these terms, what they mean and how the underlying technologies work—at least on a high level—and be generally comfortable playing in the digital space. Think about it: without a significant digital background, how on Earth can a CMO possibly be expected to run a marketing machine where at least half of the marketing dollars are being spent in the digital space? Not happening.

The other major trend is the inexorable fragmentation of the IT infrastructure within enterprise firms. Basically, what’s happening is that because technology has evolved radically over the past 10 years, it’s giving different stakeholders at companies the ability to purchase and use technology outside of their organization’s firewall, and often without IT’s involvement. Very often, in fact, IT is even without IT’s knowledge!

This is huge shift. Just a few short years ago, mind you, software was what you ran on your computer or on the company mainframe, and it was pretty much always purchased and managed by IT. Well, those days are most definitely over. What’s happened is that the emergence of the SaaS/Cloud model of software delivery has turned that world on its head.

Today, any marketer with a credit card can sign up for, say, a CRM tool or a marketing automation tool and be off to the races in seconds flat. Ask any marketer and they’ll explain how this has been a huge boon to their departments, liberating them forever from the clutches of IT.

Now, of course, a big reason for this excitement is the oftentimes frosty relationship between marketing and IT. Personality types side, in its essence this rocky relationship actually has a lot to do with conflicting mandates. It’s the IT department’s mandate to act as the stewards of the firm’s information and technology infrastructure. Essentially, it’s their job to keep internal systems running and make sure they’re secure. That’s about it. No, it’s not their job to build you a new landing page, or set up a new email campaign for this fall’s reactivation campaign.

Today’s marketing department, on the other hand, is much more focused on operations than anything else. Today marketing is about creating, testing and launching numerous marketing campaigns across various channels using different tools, and evaluating their performance using real-time analytics. And running an operationally focused marketing team requires the ability to build, dispatch and analyze lots of campaigns in rapid succession. Until recently, this heaped loads of pressure on the IT folks, who groaned under the strain. So you can see why marketers have cheered and embraced the emergence of Web-based SaaS marketing tools.

Okay, I got a little sidetracked there, so I’ll get back to the central point, which is that because marketing is rapidly becoming the de facto owners of their own IT infrastructure, this mean that they now control the technology itself and the data contained therein. It’s a big responsibility, requiring marketers to manage and safeguard this vital corporate infrastructure and information, taking on the dual roles of chief marketing technologist and data steward. But with this responsibility comes great power—to use these awesome tools and information to really, truly understand who customers and prospects are, and send out highly personalized and effective marketing campaigns with demonstrable ROI.

But evaluating performance in this environment means not only using new marketing tools and digging through mountains of data. Just as importantly, it also means understanding what it all means. In other words, just because you’re a CMO does not mean you don’t need to know how many opt-ins you have in your company database, or how many fans on Facebook.

And guess what? It’s hard to be comfortable with digital if you’ve never played in the space. But how many CMOs are also digital pros? Not too many. So not surprisingly, firms are finding that it’s incredibly difficult to find leaders with the hard-to-find combination of senior management leadership and digital marketing experience. Given this reality, it’s not too surprising to discover that many companies are running through CMOs in a conveyor belt-like fashion.

Do you know any data-driven digital pros with senior marketing leadership experience?? If so, bet your bottom dollar these executives will be cashing in big time in coming years.

—Rio