Direct Mail Planning for Your 2020 Marketing Goals

As we start the new year, direct mail planning is essential. The strategies we used in 2019 need updates to be more effective in 2020. According to the DMA, direct mail had an average response rate of 9% for house lists and 4.9% for prospect lists. How do your response rates compare?

As we start the new year, direct mail planning is essential. The strategies we used in 2019 need updates to be more effective in 2020. According to the DMA, direct mail had an average response rate of 9% for house lists and 4.9% for prospect lists. How do your response rates compare?

Looking at more than just response rates, how did your other metrics do this year? Starting with the worst performing ones, devise a different strategy to increase performance in 2020.

About 66% of mail is opened and reviewed. Direct mail not only cuts through the daily marketing clutter, but has been proven to drive digital activity and influence online purchasing decisions. Are your direct mail campaigns as effective as they can be? In the digital marketing arena email fatigue, ad blindness, and the increase in ad blocking, have combined to result in stagnating and sometimes declining performance. Direct mail should be combined with these types of channels in order to boost overall performance. Are you taking a multichannel approach for 2020?

Direct Mail-to-Multichannel Marketing

We live in an interconnected world, your customers expect you to communicate with them through the various channels they use. The companies that do this effectively see the best results. When you use campaigns that include both digital and direct mail, you, on average, receive 39% more attention than a digital-only campaign. Research shows messages delivered via direct mail can be powerfully motivating, with 92% of people driven to digital activity and 87% influenced to make an online purchase. Are you planning how to be more effective at this for 2020?

Personalization

Are you using the true power of direct mail? Personalization through variable printing is powerful. You can alter copy, offers, and even images, based on each person in your list. There are even ways to utilize more information, such as demographics, geographies, psychographics, and behavioristic data to go beyond a regular piece to a truly specialized one. When you are able to do this, you drive response much higher than before. What are you going to try in 2020?

Retargeting

Want to try something new for 2020? What about retargeted direct mail? What do we mean by that? You can retarget online activity by reaching out with direct mail. Some of the most common ways retargeting works are: for abandoned shopping carts; people who visited your website, but did not purchase; contacting lapsed customers; or creating new customers. So how do you get the mail addresses for online contacts? You can take a list of email addresses and append mail ones, or you can take a list of IP addresses that have visited your site and append mail addresses to it, or you can use mobile devise owner information to append mail addresses.

Mail Formats

For 2020, we need to think outside of the box and try new things. If all you have sent are letters or postcards, try a new format to gain more attention. Consider sending larger pieces, because they get higher response rates. If you are selling a high-priced item, consider using dimensional mail in order to drive more sales. These are more costly to send, but the ROI is much better.

Get creative and have some fun planning out your 2020 direct mail strategy! Are you ready to get started?

4 Mistakes Multichannel Marketers Make and Lose Customers

Most businesses today understand the importance of multichannel marketing. They invest in SEO, PPC, social media, and even trade shows and conferences. However, if your hard-fought marketing budget is not able to increase your customer base or pool of prospects consistently, then you can be sure your funnel has developed a few holes in the wrong places.

Most businesses today understand the importance of multichannel marketing. They invest in SEO, PPC, social media, and even trade shows and conferences. However, if your hard-fought marketing budget is not able to increase your customer base or pool of prospects consistently, then you can be sure your funnel has developed a few holes in the wrong places.

Unfortunately, both B2B and B2C businesses are guilty of making sales-killing mistakes again and again; oftentimes, putting off customers without realizing it. These simple blunders could cost your business big-time, hurting growth opportunities and diminishing returns from existing customers.

Here are four pitfalls you should be wary of while implementing an integrated, omnichannel marketing strategy, so that you don’t lose any targeting opportunities. All of these tips apply to the technology, methods, and tactics that are currently used by entrepreneurs, companies, and marketers, cutting across industries and geographies.

Preferring Safe Over Sorry

Taking risks is a big part of running a business, and something that many entrepreneurs are used to. However, once they start experiencing success and growth, many begin to shy away from taking chances.

In the long run, many business owners admit that playing it safe was one of their biggest mistakes. In terms of marketing and sales, going the safe route can actually hurt your brand. Why? Because it is simply boring.

According to a study by Adobe, 54% of marketing experts know that they should be taking more risks, and an alarming 82% of companies believe that they need to reinvent their branding in order to succeed. Remember, your customers’ needs and mindsets are constantly changing. If you rely on the same tactics, the same advertisements, and the same marketing messages, people will eventually get bored and your results will diminish.

multichannel graphic
Credit: Adobe on SlideShare.com

Reassess the methods and tools you use for audience analysis, and take a look at how the demographics have shifted over the years. Compare your past results with your current numbers to see if there are any noticeable differences. It may be time to take some risks, try something new, and see what happens.

Relying on Imperfect Bots

Saving on customer support by passing on the majority of your customer service workload to an automated chatbot system sounds like a dream come true. If used correctly, these bots answer customer inquiries, resolve issues, and even make sales. This is why the AI-powered chatbot has exploded in recent years, with 15% of consumers reporting that they have used one to communicate with businesses over the past year, according to Drift’s 2018 “State of Chatbots” report. (Opens as a PDF)

However, just because this customer service channel may be working for some businesses, it does not mean that it is a one-size-fits-all solution. When creating a chatbot, the overarching goal is to solve the cognitive puzzle that fills in the gaps between a bot conversation and a human conversation. When a conversation is initiated, in any capacity, there is an exchange of data that sheds light on emotional engagement between the two parties. Take away the emotional exchange, and empathy is unachievable.

Programming an online bot to handle all sorts of customer queries and interpret exactly what someone is looking for does require a bit of technical knowledge and understanding, despite what off-the-shelf chatbot sellers will have you believe. A poorly programmed chatbot could easily result in lost revenue.

Just one bad or frustrating experience with a chatbot will likely push away 73% of customers forever. If a bot is simply not answering their question or simply offering irrelevant information, then it is doing your business far more harm than good.

multichannel chatbot
Credit: SherpaDesk.com

In order to determine whether or not your chatbots could use some help, take a look at some important metrics. Has your sales cycle lengthened? Are fewer leads moving down the buyer’s funnel? Are you facing an increase in helpdesk escalations, despite an improvement in response times? An effective sales bot should be boosting conversions — or at least micro-conversions — so if numbers are shrinking, that’s a definite red flag.

You can also try adding a short satisfaction survey at the end of each chatbot conversation to gather some customer feedback and help identify any weak points that are killing the customer experience.

Ignoring the Micro-Influencer

It seems like everyone and their grandmother is “leveraging” influencer marketing these days, trying to reach the promised (read, purported) 11-times ROI of other digital marketing methods. It is easy to get blinded by the numbers; especially in terms of “reach” and “engagement.” Just because an influencer has a huge following doesn’t necessarily mean that their promotion will help your business.

Micro-influencers (accounts with 100,000 followers or fewer) actually perform better, in terms of audience engagement and actual “influence” — purchase rates. In fact, these smaller accounts generate over six times more engagement than influencers with massive followings. Customers are also more likely to buy a product that is recommended by a micro-influencer than they are to purchase something recommended by a person they know. Additionally, the cost per lead and cost per acquisition is lower than paid ads and regular influencer marketing.

multichannel chart
Credit: Mavrck.com

If your brand has dabbled with big-name influencers in the past, it may be time to consider a partnership with a micro-influencer to reach more relevant audiences. Because these accounts have smaller followings, they tend to be niche-focused, meaning that their content is highly pertinent to their audience’s needs and interests.

Obsessing Over Any One Stage of the Sales Funnel

Marketers love to talk about the importance of the sales funnel and creating marketing plans designed to “nudge” customers through it. While the sales funnel is definitely a great blueprint to guide your strategies, getting caught up in any one phase could spell disaster for conversions.

Remember, every visitor, prospect, lead, or target must go through several steps, go back, forward, and run around in circles before they become a full-fledged customer. They must be introduced to your brand during the awareness stage, learn more about your business and products during the interaction phase, get interested and place their trust in you, and ultimately make and stick to a decision to buy from you.

However, many marketing teams tend to forget this trajectory and get caught up in either building brand awareness so potential customers grow bored, or spend too much time promoting sales jargon that people totally disengage, due to advertising fatigue. If your customers are unfamiliar with your business (thanks to a lack of top-of-the-funnel marketing), the pressure to “Buy Now” will be ineffective.

Keep in mind, it might take up to 13 interactions with a brand before a lead can even be classified as a sales-qualified lead (SQL). Focusing on any one section of the sales journey can narrow the funnel significantly, meaning that fewer people flow through.

Focus a good chunk of your efforts on educating and raising brand awareness. Once people start tuning in, give them more specific information about your content and everything you offer. As you gain serious interest, then it’s time to start talking about price points, deals, and how potential customers can take proper action.

Most importantly, you need to place emphasis on the transitions between stages. They need to be smooth and organic if you want your sales funnel to function properly.

Fix Your Strategy, Fix Your Sales

Selling is an art form that no one has truly perfected. There are so many ins and outs, little details, and psychological factors that play into it — making it a deeply complex and ever-evolving practice. Online sales add another layer of complication by removing that up-close and personal factor. However, once you’ve plugged the leaks in your sales funnel, you’ll see a larger number of customers coming in and coming back. Good luck!

3 Martech Tools to Optimize Direct Mail Campaigns

The powerful targeting of direct mail can help you punch through all the marketing noise people are exposed to each day. Martech tools provide ways to make an even greater impact with your campaigns by cross-pollinating between channels.

The powerful targeting of direct mail can help you punch through all the marketing noise people are exposed to each day. Martech tools provide ways to make an even greater impact with your campaigns by cross-pollinating between channels.

Many marketers find this to be cumbersome and expensive, but what if there is a better way? Check out these statistics:

  • Companies that use multichannel marketing experience three-times higher effectiveness rates than those that use non-integrated campaigns (source).
  • 23X higher rates of customer satisfaction are experienced by companies with omni-channel strategies (Aberdeen Group)
  • 89% of customers are retained by companies with omnichannel engagement strategies (Invesp)
  • 45% of marketers feel they lack the necessary talent, technology, and processes to master omnichannel brand marketing (CMO Council)

So how can you harness these stats to improve your direct mail response rates? You know that on average it takes eight to 10 touches with a prospect to convince them to buy from you. So when you create campaigns using multiple channels, you make a bigger impact and provide more opportunities to convert them. You want your marketing to create engagement that leads to sales. Direct mail is a key component in your marketing strategy, but it is not the only one. So how can you easily pull together a multichannel campaign? Here are some options.

3 Platforms to Enhance Your Direct Mail

  • DirectMail.io: They offer an integrated omnichannel marketing program. Their services include data management, direct mail, email, live call center, SMS solutions, social media, and Amazon and Google voice assistant integration. This platform has flexible software that combines data, marketing, communications, and analytics, all in one place. DirectMail.io provides a simple solution that seamlessly integrates over 12 inbound and outbound marketing channels, allowing advertisers to launch, manage, and track all of their marketing efforts in one place.
  • SnailWorks: SnailWorks tracks mail using Informed Visibility from the Postal Service, which allows them to track each individual piece of mail to delivery, and then uses that delivery to trigger other marketing efforts, such as email, telemarketing, web advertising, and more. They take all of these disparate channels and tie them into a single campaign along with a web-based dashboard that shows real-time results and distributes leads for the campaign. Recently, SnailWorks added Direct2Digital ID to its service offerings. Direct2Digital ID provides mailers with an easy way to participate in the new Postal Service Informed Delivery program.
  • DirectMail2.0DirectMail2.0 suite uses seven different technologies, timed in such a way as to result in the best possible lift in a direct mail campaign. These seven technologies seamlessly track, enhance, and prove attribution on any direct mail campaign. It does this through incorporating Mail Tracking, Informed Delivery, Call Tracking, Online Follow-up, Social Media Follow-up, Social Match, and LeadMatch technologies. No need to be an expert in multiple types of digital technology. Just upload a processed mailing list with an ad or two and the platform does the rest.

As you can see, there are great platforms to choose from to enhance the effectiveness of your direct mail campaigns. In 2019, your customers and prospects expect to engage with you on multiple channels. Create more powerful direct mail campaigns by integrating them into a multichannel experience. Become one of the statistics above. Marketing experiences really matter and can make the difference between an okay campaign and a fabulous one. Are you ready to be fabulous? Get started on integrating your direct mail with other channels.

How to Consider the Buyer’s Journey, Not Just the Channel

We are obviously living in a multichannel marketing environment, whether we are marketers or consumers. Every conceivable channel is being optimized for marketing, and in a capitalistic society, that is only natural.

channel
Credit: Getty Images by Photo-Dave

We are obviously living in a multichannel marketing environment, whether we are marketers or consumers. Every conceivable channel is being optimized for marketing, and in a capitalistic society, that is only natural.

Someone has to pay for the maintenance of media channels, and marketers want to reach their target audiences through them. Voila! Demand meets supply, and the whole ecosystem is in perpetual motion.

So much so that many marketing organizations are organized by key media channels. The No. 1 reason many datasets are in silos? It is because data collected through different channels are hogged by the managers of those channels.

So the biggest hurdle towards a true 360-degree customer view is not the technology or lack of data, but the fact that interests of different channel managers do not meet in a common place, without heavy nudging from CEOs or CMOs. That is why I’ve been repeatedly saying that the first step towards proper data-readiness for advanced 1:1 marketing is the commitment from the top.

That being the reality, service providers — whether be data compilers, database designers, CRM experts, analytics experts or campaign specialists — must comply with the channel-centric environment, which is unfortunately the source of inadequate 1:1 targeting and personalization.

With all the technologies available today, why do you think that consumers keep getting similar or conflicting offers from the same organization? It’s because each channel manager acts like she “owns” the names of buyers who touched “her” channel. Let’s just say that is the exact opposite of customer-centric marketing.

Further, it gets even more complicated, as each channel exists not only on different plains, but on different spots on the timeline of customer journey.

What is customer journey? If I make a typical B2C engagement an example (because there are so many versions of this concept out there), it may follow these high-level steps:

  1. Awareness
  2. Interest
  3. Trial
  4. Repeat
  5. Loyalty

If this were for B2B, we may consider “Decision” and “Action” as separate steps, but the general idea of a customer journey is not all that different.

Now, the important point here is that these phases may or may not converge nicely with the “marketer’s journey,” which may look like:

  1. Acquisition
  2. Relationship Development
  3. Retention
  4. Win-back

Clearly, awareness and interest stages are closely related to acquisition; but after the purchase, we are moving into the CRM area from the marketer’s point of view, where cross-sell/up-sell, value-based targeting, various retention and anti-churn prevention measures, and win-back efforts come into play. Some actions go way past repeat and loyalty stages from the buyer’s side.

Now, add all the channels on top of this combination. No wonder there are lots of conflicts among channel managers. Who owns what stage of the game? Maybe that is just a wrong way to approach all of this.

Homework for Marketers

I’d say marketers should start with the customer’s journey first. Not just in the name of customer-centric marketing, but for practical reasons, too. So, list five customer journey phases on the left-hand side on a piece of paper.

Then, let’s write down proper marketer’s effort categories, from acquisition to win-back.

Next to it, put down data assets and technologies that you have available for each stage. You will find that distinctly different types of data and technologies should be applied to each.

For instance, third-party data are important for acquisition and win-back stages, due to lack of behavioral and transaction data. Conversely, to build proper cross-sell/up-sell, customer value or churn prevention models, you will need to use rich transaction and interaction history with your customers. Then of course, technology that you need to employ would be different for each stage.

Then, only then, write down proper media channels that would be best utilized for each stage of your marketing efforts.

For example, in the acquisition stage, where only third-party data and non-transactional data are available, what would be the best acquisition channel for you to employ? Catalog? Postcard? Email? Social media? General media?

For relationship-building and retention efforts, yes, email is the dominant one; but should it be the only one? Let’s not just settle on one channel, just because it is readily available and less costly. If you have all of the rich transaction and response data, why not use direct marketing, with rather fancy catalogs or First Class mail? Surely, with such powerful data, we can build proper targeting models to make those more expensive channels worthwhile.

Turning Marketing on Its Head

The key message here is to reverse the way we think about our channels, and shake the whole marketing ecosystem up.

I got into a heated debate with one of my colleagues the other day about this. Many digital marketers think that the journey begins at the moment a visitor lands on a website or types in a search word (refer to “Customer Journeys Don’t Start on Your Website”).

Before someone magically shows up on some site, there had to be other efforts to raise awareness and pique interest for that visitor. It could have been a banner, billboard, TV, radio, magazine, paper or more targeted media, such as direct mail, catalogs or email. All of those channels play different roles in different stages of both customer’s journey and the marketer’s journey.

Multichannel or Omnichannel concepts have been around for a long time; but to rise above the channel-centric mindset that hampers effective customer communication, markers must be aware of the timeline view, as well.

In fact, as I described in the body of this article, you may have to reverse the whole process, and see it from the timeline view first, and then assign proper channels to each stage. Otherwise, how would you ever escape from channel silos?

Your Prospects Are Multichannel. Are You?

in order to engage, we must go to the watering holes where our customers and prospects hang out. We have to be in the channels they frequent, in addition to having relevant content for them to consume and share.

Last month on our Revenue Marketing journey, we discussed content marketing strategy and the steps to developing the best content editorial calendar. This month, let’s talk about channels for multichannel distribution of your content.

If you have a “field of dreams” wherein, if you create great content and put it on your website, somehow, “they will come …” well, good luck with that. The reality is that, in order to engage, we must go to the watering holes where our customers and prospects hang out. We have to be in the channels they frequent in addition to having relevant content for them to consume and share.

Ask Your Customers What Channels They Use

We have many clients who simply don’t believe their customers are on Facebook. So, we upload 5000 of their business email addresses to Facebook and show them the result: Usually a 65 percent match rate for business email addresses. Business people are on Facebook and they “hang out there” every day:

  • 63 percent of Facebook users are age 30 and older
  • Facebook has more than 1 billion visitors per day
  • Facebook has many more video views than YouTube

I only bring this up to highlight that our assumptions about which channels are best for reaching our customers may be wrong. The best thing you can do is ask your customers. The next best thing to do is to experiment with multiple channels and see which ones currently work best for your firm.

No doubt you noticed I didn’t even mention email yet. Yes, it is a channel, perhaps the one you are most accustomed to using. And it is easy and inexpensive. But it should not be the only channel you use. Increasingly there are issues with:

  • Information overload in inboxes so your communication gets lost
  • Automatic “junk” designation and filtering
  • Spam traps (so you decide to do an ABM campaign to 250 contacts at your biggest customer and you email all of them at once…guess what is going to happen.)

My point is that your attempts to engage your audience will be better if you use multiple channels to nurture them. Upload the email addresses in Facebook, LinkedIn and other channels, establish a connection to your contacts through these channels, and start sharing content over them.

Syndicate Your Content

Syndicate and promote are becoming synonymous today because organic social is pretty much defunct. You have to boost or promote your content to your audiences or targeted marketing groups.

For video, it’s simple; YouTube is owned by Google. They have 77 percent of the search market. Since videos are quickly becoming the hottest form of content, it makes sense to place it where it will be found. If you have a podcast, use a podcasting hosting site such as Libsyn to set up your audio RSS feed. This feed can then be used on podcast distribution platforms such as iTunes, Google Play and Stitcher to ensure your audience can access your show regardless of which mobile device they use. Set up a podcast promotion plan for your social media sites as well to drive new listeners to your episodes.

Look for Multichannel and Cross-Device Remarketing Opportunities

Multi-channel and cross-device remarketing are really hot right now. I would suggest adding in some reference or weaving in some of that in this section. The following is an example of a multi-channel campaign.

Let’s say you are going to run a webinar next month. What should that campaign design include in terms of channels:

  • One to three emailed invitations and a few variations of follow up emails
  • Up to three impressions per person promotion in Facebook image ads
  • Blog post promoting the webinar on your blog
  • Promoted blog post on LinkedIn, Facebook and a promoted tweet
  • Facebook media ad — video promoting webinar
  • Retargeting campaign to known contacts in Facebook and Twitter
  • Lookalike campaign in Facebook
What a campaign design document could look like.
What a campaign design document could look like.

Hopefully this example makes it clear that your campaign design document has to be very clear on all the channels for a promotion. The graphic and copy (assets) needs vary by channel, and the logistics for lining up all these assets at the same time are much more complex than when you are simply using a single channel such as email. But the results for going multi-channel will be much better of course.

Track Everything

If you have content on your website and you point to it from other online digital content you control, your blog for instance, you can and should be tracking all those clicks by content type and channel. But when creating links to your content from digital properties you cannot fully control, or with embedded links in documents you share, ensure you use UTM codes with the links.

UTM codes were formulated to track channel and content performance. Make sure you use them religiously on all links on ads and promotions and in embedded links in documents. Set up a shared Google doc or spreadsheet to automatically generate UTM codes for your team with an approved picklist of values for Medium and Source. Minify the links to ensure their integrity before using them. Here is an example, a link to a white paper on strategic planning and budgeting for marketing. It goes without saying that you use your Marketing Automation Platform (MAP) form capabilities to grab the UTMs and save them in the contact record.

Use a tag manager, and make sure you “pixel” visitors to your content no matter where they found the link. That way to can add them to your “pixeled” database of unknown but interested parties and do promotions to them through Facebook, Twitter and Instagram.

By tracking everything you will gradually start to learn which channels and content work best for you to attract visitors to your website and drive revenue.

Next month, we will continue the Revenue Marketing journey conversation, and focus on the marketing technology stack.

Please feel free to share your experiences with content marketing strategy and other insights on the above topics in the comments section below or email me at kevin@pedowitzgroup.com.

What You Need to Know About USPS Informed Delivery

You probably don’t like spoilers for movies, but what about your direct mail?

The U.S. Postal Service has rolled out a new tracking feature called Informed Delivery in the last few months. And it has implications for how the customer, the mail service vendor, and marketing agencies operate in the mailstream.

You probably don’t like spoilers for movies, but how about for your direct mail?

The reason I’m asking is because the U.S. Postal Service has rolled out a new tracking feature called Informed Delivery in the last few months. And it has implications for how the customer, the mail service vendor, and marketers operate in the mailstream.

USPS LogoThe first time I heard of it was in September 2015, when I spoke at the National PCC Day event in New York.

In his remarks, USPS Chief Marketing Officer Jim Cochrane mentioned a service undergoing trials that would let people see their mail before it gets delivered.

I was intrigued, and still am, as Informed Delivery is being implemented this year.

I agree with Tom Glassman, Director of Data Services and Postal Affairs at Wilen Direct. He calls it “a great integration of digital and physical mail.”

So last week, I signed up for the program and waited to see what happened.

How It Works

Consumers can enroll online for a free, password-protected account that creates a digital mailbox for the direct mail they receive at their house. Before it’s even physically delivered, they can log in and see a grayscale image of the front of a common-sized mail piece, like a #10 envelope or folded self-mailer.

It’s not available yet for P.O. Box customers. And jumbo mailers, catalogs, and packages aren’t included in the mix at this time.

What Marketers Should Think About

So if you’re a marketer, you’re probably asking, “What’s in it for me?” What’s the ‘why’?” There are complex answers to these questions.

If this service were only about giving consumers a sneak preview of their mail, one more impression of an offer, well that’s not too bad.

But Informed Delivery is more than that.

Marketers can build campaigns using the Intelligent Mail barcode (IMb) to reach target audiences in the digital and physical worlds simultaneously. Under the program, marketers can enhance a physical mail piece when it’s scanned into the mailstream with a representative full color image, interactive content, and a click-through URL, with individual URLs coming this fall.

I’m not going to get into all of the technical details about campaign management and how to set up Informed Delivery. That discussion needs a much deeper dive, so it can wait for another time and place.

And I fully expect USPS to change features based on feedback from industry users and the public.

But I do have some recommendations.

First, consider how your direct mail – or at least some of it – can stand out in a grayscale image. This means paying special attention to your images, teaser copy, etc., and testing all of them

Second, think about all how your mail or your client’s mail can be enhanced with an Informed Delivery campaign. So off the top of my head, I can see uses for retailers, transpromo, insurance, utilities, and financial services.

Finally, there are some great resources to consult for more information about why and how to implement Informed Delivery.

One other thing. Remember the words of the late Mal Decker: “Rule No. 1, test everything; Rule No. 2, see Rule No. 1.”

‘Who Moved My’ Multichannel Measurement on a Budget?

There are several great enterprise data platforms that can put you on your way to algorithmic attribution, but many marketers don’t have the budgets to support that investment. So how do you determine which channels are performing best for you without relying on simple but unsatisfactory attribution methods like first exposure, last click or arbitrary weighting?

Who moved my multichannel attribution?[Editor’s note: Chuck McLeester is speaking during a Target Marketing webinar on Oct. 20 titled “Who Moved the Sales? Why marketing attribution is so crucial to track, yet so hard to do.” As a preview, he’s re-running his April blog post, “3 Steps to Multichannel Measurement on a Budget.”]

There are several great enterprise data platforms that can put you on your way to algorithmic attribution, but many marketers don’t have the budgets to support that investment. So how do you determine which channels are performing best for you without relying on simple but unsatisfactory attribution methods like first exposure, last click or arbitrary weighting?

Here’s a relatively easy way to measure the incremental value of each marketing channel to determine which channels are performing best so you can optimize your marketing mix.

First, pick a set of geographically similar markets — one for each channel that you’re using plus one to act as a control cell. Make them as closely matched as you can in terms of size and demography — so don’t mix big markets like Chicago with smaller markets like Waco. You also want to stay away from markets that have competing media — for example, Princeton, N.J., is exposed to both New York and Philadelphia media. Data from the Statistical Abstract of the United States and Census.gov can help you select markets that work for you.

Second, create a test matrix where one of your markets serves as a control, and the balance of your markets eliminate one of the channels you’re evaluating. For example, in the matrix below all channels are used in the control cell, and one channel is eliminated from each of the test cells.

Chuck McLeester chartConduct your test long enough to get a statistically reliable number of responses. With 250 to 300 in each column and each row, you can be 90 percent confident that your results won’t vary by more than 10 percent in a rollout scenario.

Third, examine your cost per response by market in a matrix like the one below. (These numbers are for illustration only and are not meant to reflect actual costs or responses from these channels.)

Cells that have a higher cost per response from the control indicate that the channel you eliminated from that geo area is valuable to you because it was lowering the average cost per response in that cell. In the example below, the geo areas where email, search and social were eliminated had a higher cost per response overall, indicating that these channels were important parts of your media mix. Cells with a lower cost per response from the control indicate that the channels eliminated from those geo areas were increasing your overall cost per response. In the example below, direct mail, display and mobile all had higher costs per response than the control cell which included all the channels.

Chuck McLeester measurement chartYou can do the same analysis on revenue and profit if you are engaged in catalog or e-commerce. The difference in profit between the control profit and the profit in each equally matched geo cell provides the incremental value, whether positive or negative, of the channel that was omitted in that cell.

Chuck McLeester money chartThis experiment has its limitations. Your markets will not be perfectly matched and external factors can affect your results. However, it will provide valuable insight about the interplay among the different elements of your media mix.

Finally, remember that eliminating different channels from your media mix will also have an effect on your response or sales volume. To understand how to best manage volume within your allowable cost per response or cost per order, check out this former Here’s What Counts post.

Facing the Future

Recently, I participated in a panel discussion at a major e-commerce conference. The topic was about the “Future of Marketing,” and naturally, the discussion went towards the Internet of Things and other futuristic technologies. The key question was, “How should marketers adapt to these rapidly evolving technologies?”

wwwRecently, I participated in a panel discussion at a major e-commerce conference. The topic was about the “Future of Marketing,” and naturally, the discussion went toward the Internet of Things and other futuristic technologies. The key question was, “How should marketers adapt to these rapidly evolving technologies?”

In a panel discussion, where panelists are supposed to share the stage with others, there generally is no time to build up a story. Nor does the modern-day audience have patience for a long intro. We’ve got to get to the point fast. The bottom line? Technologies change, but people don’t.

Well, they actually do change over time, if you want to be technical about it, but the whole premise of predictive analytics (and the reason why it works) is that people are predictable. Hence the phrase, “Past behavior is the best predictor of future behavior.” Even the manufacturers of products aren’t sure what is going to be invented in the near future. People, on the other hand, unless there are life-altering events such as getting married or having a baby, change “relatively” slowly.

Yes, new cool things come and go, but the early adopters of technologies will remain in search of cool new things and adopt them earlier than others and at a higher price point, movie collectors will collect movies in new super-duper-ultra-high-definition formats (ask them how many times they bought the “Godfather” trilogy), conservative investors will invest more conservatively, fashionistas will care more about the latest fashion than others, and outdoors enthusiasts won’t be flipping channels on TV on weekends unless they get injured doing outdoor activities. Here, I am also describing the reasons why product-to-product type personalization (as in “Oh, you bought an outdoor item, so you must be in interested in all other outdoorsy stuff!”) is mostly annoying and impersonal to consumers.

So, if (more like “when”) some smart person – or a company – invents a new way to communicate among people, marketers should NOT create a new division for it (like a social media division, email division, etc.). If wearable devices, such as watches or eyeglasses, become really smart and ubiquitous, I am certain some marketers will simply see the new invention as a piece of real estate where they will put their so-called “personalized” ads. From a consumer’s point of view, that would be the last thing that they would want to see on their new toy. You think that a banner is annoying on a computer screen? Try a 3D image projected out of your glasses, promoting some random things.

The first thing that a marketer must face is that all of these new devices will be connected to a network for “two-way” communications, not one-way blasting. It doesn’t matter if it is a watch, eyeglasses, set-top-box or even a refrigerator. IoT is essentially about data collection, not about marketers’ new sets of billboards. And the price of spamming through such personal devices – especially ones that people will wear on their bodies – will be quite stiff. My advice? Don’t do it just because you can (refer to my earlier article “Don’t Do It Just Because You Can”).

The second bit of advice is that marketers should not forget that they are NOT in control of communication. Consumers will cut out any conversation if “they” think that the message is irrelevant, intrusive, rude or simply uncool. Millennials are in fact less likely to be resistant to sharing their information on the Net, if “they” think such action will yield some benefits for “them.” The second that they decide it is a waste of their time or not worthwhile for that small space on the phone, they will mercilessly opt out and delete the app.

So, if a marketer thinks that all of these new devices will serve “them” as part of their multichannel arsenals, well, I am sorry to inform them they are just wrong. Call it any name you want, whether it is personalization, customization, customer experience or whatever, the key is staying relevant at all times. The goal should be keeping engaged without being fired by the new generation of impatient and tech-savvy customers. In fact, marketers have lost control over this matter already; the sooner they realize that, the better off they will be.

Then there is this data part. All of these new technologies will yield more data for sure, as the very concept of “connection” is about knowing the who, when, what and where of every event, maybe with an exception for the “why” part (remember the age-old argument that correlation doesn’t automatically mean causation?). That means this Big Data thing will get even bigger. Many companies don’t even know how to deal with transactional data or digital data properly, and they barely consume basic reports out of them. Most don’t have any clue about how to convert such data assets into real profit. A few have some idea that personalization is the way of the future, but may not know how to get there.

Now multiply all of those data challenges by a million to gauge the size of the data-related issues when everything that consumes electricity will start spitting out some form data at us. Bless those electrons and charged particles; now they will soon know to how to talk to us.

How do marketers get ready for such a world? I think the way our brain works may provide a clue, though I am not getting into a new discussion regarding machine learning at this point. Our brains, basically, are programmed to know what to ignore; they simply do not process everything that we see, hear, taste or feel. Many women complain about their male partners’ selective hearing, but in the age of abundant data, analysts must learn from those seemingly simple-minded men.

Big Data are big because we don’t throw away anything. Data that are useful for one purpose could be dismissed as worthless noise for others. Basically, Big Data must get smaller to make sense for decision-makers (refer to my earlier article “Big Data Must Get Smaller”).

There are movements in Silicon Valley to build a machine that would just provide answers out of mounds of data, much like the one in a satire movie called “The Hitchhiker’s Guide to the Galaxy.” I dare you to say that even such a machine must go through some serious data selection/reduction processes first in order to provide any useful and consumable answers. Anyhow, even with such an omnipotent computer, the humans are the ones who need to ask the question wisely. If not, we will get answers like “42” for “The Question of Life, the Universe and Everything,” after 7.5 million years of calculation. That computer named Deep Thought in that movie actually pointed out that “The answer seems meaningless, because the beings who instructed it never actually knew what the question was.”

So, how are we supposed to ask questions in the age of abundant data and ubiquitous connections? Let’s remember that ultimately, marketing communication is about pleasing other human beings and treating them right. If that is too much, let’s start with not annoying them through every device and screen ever invented.

Then, how do we become more selective? Invest in analytics, and start cutting through the data before it is out of control. Why? Because consumers are in control of all these devices, and they will cut out any marketer who doesn’t conform to their standards.

We may never really know why people do what they do, but let’s start with talking to them only when necessary with a clear purpose, and offering benefits to them when we do get to talk to them. Modern-day analytics can already provide answers to such questions with available technologies. It is a matter of commitment, not technical challenges.

I really don’t think the future will be brighter just because we will have better technologies. Imagine spams through every device that you possess as a consumer. I, for one, would give up a talking refrigerator and all the benefits that come with it, if it becomes even remotely annoying to “me.”

3 Steps to Multichannel Measurement on a Budget

There are several great enterprise data platforms that can put you on your way to algorithmic attribution, but many marketers don’t have the budgets to support that investment. So how do you determine which channels are performing best for you without relying on simple but unsatisfactory attribution methods like first exposure, last click or arbitrary weighting?

There are several great enterprise data platforms that can put you on your way to algorithmic attribution, but many marketers don’t have the budgets to support that investment. So how do you determine which channels are performing best for you without relying on simple but unsatisfactory attribution methods like first exposure, last click or arbitrary weighting?

Here’s a relatively easy way to measure the incremental value of each marketing channel to determine which channels are performing best so you can optimize your marketing mix.

First, pick a set of geographically similar markets — one for each channel that you’re using plus one to act as a control cell. Make them as closely matched as you can in terms of size and demography — so don’t mix big markets like Chicago with smaller markets like Waco. You also want to stay away from markets that have competing media — for example, Princeton, N.J., is exposed to both New York and Philadelphia media. Data from the Statistical Abstract of the United States and Census.gov can help you select markets that work for you.

Second, create a test matrix where one of your markets serves as a control, and the balance of your markets eliminate one of the channels you’re evaluating. For example, in the matrix below all channels are used in the control cell, and one channel is eliminated from each of the test cells.

Chuck McLeester chartConduct your test long enough to get a statistically reliable number of responses. With 250 to 300 in each column and each row, you can be 90 percent confident that your results won’t vary by more than 10 percent in a rollout scenario.

Third, examine your cost per response by market in a matrix like the one below. (These numbers are for illustration only and are not meant to reflect actual costs or responses from these channels.)

Cells that have a higher cost per response from the control indicate that the channel you eliminated from that geo area is valuable to you because it was lowering the average cost per response in that cell. In the example below, the geo areas where email, search and social were eliminated had a higher cost per response overall, indicating that these channels were important parts of your media mix. Cells with a lower cost per response from the control indicate that the channels eliminated from those geo areas were increasing your overall cost per response. In the example below, direct mail, display and mobile all had higher costs per response than the control cell which included all the channels.

Chuck McLeester measurement chartYou can do the same analysis on revenue and profit if you are engaged in catalog or e-commerce. The difference in profit between the control profit and the profit in each equally matched geo cell provides the incremental value, whether positive or negative, of the channel that was omitted in that cell.

Chuck McLeester money chartThis experiment has its limitations. Your markets will not be perfectly matched and external factors can affect your results. However, it will provide valuable insight about the interplay among the different elements of your media mix.

Finally, remember that eliminating different channels from your media mix will also have an effect on your response or sales volume. To understand how to best manage volume within your allowable cost per response or cost per order, check out this former Here’s What Counts post.