5 Tips for Faster, More Confident, Direct Marketing Budget Decisions

As we enter the critical make-or-break fourth quarter, and you begin your 2014 direct marketing budget plans, you will likely be faced with many marketing decisions. Those decisions are usually needed quickly. But often they’re not made quickly. Whether it’s information overload from so many options, analysis paralysis or managers who are afraid to make a decision, today we explore five ways to

As we enter the critical make-or-break fourth quarter, and you begin your 2014 direct marketing budget plans, you will likely be faced with many marketing decisions. Those decisions are usually needed quickly. But often they’re not made quickly. Whether it’s information overload from so many options, analysis paralysis or managers who are afraid to make a decision, today we explore five ways to make marketing decisions quicker and more confidently.

A mere generation ago, direct marketing decisions were limited to direct mail customer file or rented lists, space ads in magazines, package inserts, direct response broadcast, and a few other media options.

Fast forward to now, and the direct marketing decision landscape has grown exponentially with online and cross-promotional media options. Every season reveals new, unexplored online opportunities. Some are fads. Some turn out to have real value.

So for your direct marketing budget planning, here are five recommendations of how to evaluate opportunities and make decisions more quickly and confidently.

1. Cost per Response
An important metric for most direct marketers is the marketing cost per response (per lead, inquiry, sale—whatever your situation). This core metric may be your most significant contributor to your decisions.

2. Allocation of Unknown Response Sources
If you’re in a situation where you have a significant number of responses for which you can’t pinpoint a specific marketing source, consider a weighted-average allocation of those responses across marketing activities. With some imagination, you should be able to calculate this on your own. (Let me know if you’d like an expansion of this concept, and perhaps we’ll do so in a future blog post.)

3. Summarize Results in a Matrix
Placing your data in a spreadsheet will put the numbers in front of you so you can see all your activity in one place. You may want the data by media type on separate spreadsheet tabs so you can see more granular data.

For example, on one tab you summarize results from direct mail (by list, or summed up by customer vs. rented lists) with cost per response. If you allocated unknown orders, be sure to include those. Another tab might concern email results that summarize opens, clicks, conversions and cost per response. Other tabs could summarize pay-per-click, social media, retargeting or whatever media you are using. Then roll up and summarize all of the media on a tab of its own. If cost per response is most important to you, then sort the data from the lowest cost per response to highest. Perhaps you have “soft data” that will be a factor in your decisions. If so, add columns to enable a written evaluation of each. Maybe your evaluation is as simple as “pluses” and “minuses” for each opportunity.

4. Parameters for Decisions
It happens all the time. With so many choices and options, and potentially several staff members wanting their piece of the budget, decisions can be contentious and slow. When that happens, everyone loses. When you establish the parameters for decision making upfront, it’s easier to slice the pie into the right proportions. More importantly, if the head of the organization or department has established those parameters in writing (avoid verbal direction to avoid future misunderstanding), staff is empowered to make more confident decisions without delay.

5. Don’t Forget Test Budgets
Know, ahead of time, how much money you can gamble in a test. You should view the money spent as having zero return so that when if it works you’re pleasantly surprised. A rule of thumb you might use is to allocate 10 percent of a total marketing budget to tests. Whether it’s a direct mail list test, or new online media, the only way you can learn if those options work for you is to test it. Remember, too, that marketing fads can fizzle quickly. The hot new opportunity of 2012—not even a full year ago—may already be a distant memory.

If you have processes, or recommendations, about how you make faster, more confident marketing decisions, please share them in the comments area below.

3 Ways Rank-and-File Marketers Matter to the C-Suite in a Brave New Marketing World

A couple weeks ago in my post titled “Wanted: Data-Driven, Digital CMOs,” I wrote about the enormous pressure CMOs are finding themselves under as the world digitizes, requiring a new type of leader, one who understands and feels comfortable in the digital space. The result of this changing dynamic has been a dramatic shortening of your average CMO’s tenure. I’m not the first to observe this trend—it’s been covered in many places over the past few months, including this great article from Fast Company. In response to this post, however, many colleagues have asked me “What does this mean for the rank-and-file marketer?” I thought this was an excellent question; one I’ve not seen discussed elsewhere.

A couple weeks ago in my post titled “Wanted: Data-Driven, Digital CMOs,” I wrote about the enormous pressure CMOs are finding themselves under as the world digitizes, requiring a new type of leader, one who understands and feels comfortable in the digital space. The result of this changing dynamic has been a dramatic shortening of your average CMO’s tenure.

I’m not the first to observe this trend—it’s been covered in many places over the past few months, including this great article from Fast Company. In response to this post, however, many colleagues have asked me “What does this mean for the rank-and-file marketer?” I thought this was an excellent question; one I’ve not seen discussed elsewhere.

By any standard, it’s certainly not an easy time to be a marketer. Over the past decade, nearly everything we know has changed, as new technologies have arrived in a dizzying fashion, upending the established order. The result for most firms has ranged from confusion to clarity, from paralysis to paroxysm—very frequently all at the same time! Working in an environment like this is definitely no picnic, as firms flail around like a hurt animal trying to figure out what to do, reducing head count, hiring, outsourcing, in-sourcing, you name it.

It may not be an easy time to be a marketer, but I think it’s a good time. The reason why is that marketing has evolved in four very important ways:

1. Marketing has become data driven—in the digital age, information is power. Contemporary marketing requires learning about who your customers are, what they look like, what attributes and affinities they share, and so on. Success means becoming fluent in the new language of the digital age—understanding what terms like “impressions,” “clicks,” “likes” and “followers” mean. But that’s not all: Success requires a deep understanding of and familiarity with campaign analytics, what they mean and signify, and how to interpret and improve upon them.

2. Marketing is technology-focused—it’s no secret that a large portion of marketers’ budgets are now being allocated to digital. Anyone who’s worked in the digital marketing arena knows that success in the space means understanding the new technology ecosystem. The other major technology trend is the fragmentation of the IT infrastructure as the SaaS/Cloud model gains traction. In this new service model, it’s marketing that’s mostly responsible for buying, using and maintaining these new tools.

3. Marketing is highly operational in nature—unlike the brand strategists of yesteryear, today’s marketing department is almost entirely focused on operations, with a heavy emphasis being placed on creating, testing and launching, tracking and optimizing numerous marketing campaigns across various channels using different tools.

In this new environment, the DNA of the rank-and-file marketer has changed radically, morphing from that of a brand steward into, well, something else entirely. Any way you look at it, today’s marketers are highly trained and qualified specialists, possessing a wide range of skills and knowledge, which can take months, if not years, to master.

Moreover, success in any given marketing role requires a deep understanding of various marketing program details, familiarity with firm’s marketing technology, systems and tools, not to mention the prevailing corporate culture. All in all, it’s a tall order.

Over the years, I’ve consulted with dozens of large firms, and I can tell you firsthand that most marketing leadership stakeholders are not digital people. In other words, the only people in the firm who really “get” what the firm’s marketing department is actually doing are the marketers themselves. Interesting, huh?

So what does this all mean? Well, in coming years I foresee a shift in the balance of power as the old generation of marketers gives way to a new generation of younger digital specialists. Now, of course, one generation passing the mantle to the next is the natural order of things. But, based on what’s going on, I see this trend accelerating dramatically in coming months and years, as those who don’t get it are replaced by those who do.

If you’re a marketer, all if this is undoubtedly good news, meaning you’re not only much more important than you think, but your trip up the proverbial corporate ladder is that much shorter. So go forth, young man (or woman), it’s a brave new world!

Any questions or feedback? As usual, I’d love to hear it.

—Rio