How Performance Marketing Accelerates B-to-B Prospecting

Every time you turn around, a new “performance marketing” opportunity turns up for B-to-B marketers. What a treasure trove! And on the face of it, a real boon, because you only pay when your prospect takes the action you’re looking for—the click, the download, the purchase, whatever. But there are some potholes to consider. Let’s look at how marketers get value out of this approach to finding new customers.

Every time you turn around, a new “performance marketing” opportunity turns up for B-to-B marketers. What a treasure trove! And on the face of it, a real boon, because you only pay when your prospect takes the action you’re looking for—the click, the download, the purchase, whatever. But there are some potholes to consider. Let’s look at how marketers get value out of this approach to finding new customers.

To back up, what is this performance marketing thing, anyway? It generally means that the media channel owner conducts a campaign and charges the marketer an agreed price for every respondent, according to predetermined criteria. There are scads of ways performance marketing is being applied across the B-to-B go-to-market spectrum. So far, this is what I know:

  • Pay per click. The grand-daddy of performance marketing, the system that sent Google’s fortunes into the stratosphere. You only pay when a prospect clicks on your selected keyword(s). The secret to success here is choosing the right keywords and sending the clicker to a brilliantly written landing page, where you have a prayer of converting them from a mere clicker to something else, like a prospect with whom you can continue a conversation. Some banner advertising and email rental lists are sold this way, as well.
  • Pay per lead. This highly popular technique was pioneered by trade publishers looking for ways to extend the value of their customer access. Ziff Davis and TechTarget are leaders in the tech industry world, using “content syndication,” distributing marketers’ white papers and research reports, and charging by response. MadisonLogic offers pay per lead programs via banner ads to a network of 300 publishers, with particular strength in the HR and technology sectors. Another player is True Influence, which uses email to its own compiled database of business buyers.
  • Pay per appointment. Hiring a telemarketing shop to conduct appointment-setting programs for sales reps is a long-time staple of the B-to-B marketing toolkit, and often priced by the appointment. Myriad call centers offer this kind of pricing.
  • Pay per PR placement. Several PR agencies have taken the big step of pricing their services on a pay-for-placement basis. Amid much hand-wringing among PR professionals, the model’s strong appeal to marketers is likely to mean continued experimentation.

Is the next logical step some kind of pay-for-performance results guarantee from creative agencies? I doubt it. I posed that question recently to Warren Hunter, Chairman of DMW Direct, who said firmly, “No way.” Since they are a direct marketing agency and thus used to delivering highly measurable results, I thought there might be a shot. But here’s how Warren explained his position. “If you give me control of the creative and the media, sure. Without that, there are too many variables that impact the results.”

The newest entrant in performance marketing is the daily deal business, pioneered by Groupon and Living Social. You might call this “pay per new customer.” In the B-to-B space, some experiments are underway like BizyDeal and RapidBuyr, but they don’t appear to have really taken off yet. Except for very small business, this is not how businesses buy.

My net takeaway on this subject is the old adage that you get what you pay for. When you think about it, the performance model has an inherent bias against quality, so marketers need to do the math. Avoid this model unless you have good data on conversion rates—conversion to qualified lead, and then conversion to a sale. With that data in hand, you can determine a profitable price and buy leads and appointments till the cows come home.

Based on my experience using PI (Per Inquiry) deals with cable TV operators years ago, I know that the “pay per” model works best if both sides have a track record with that offer in that medium. The media owner knows what kind of response it’s going to get, and the marketer knows the lifetime value of the new customer. So one way to increase the likelihood of success is to run a campaign using traditional pricing and then convert to performance-based pricing after generating some experience.

Where is performance marketing in B-to-B headed? Erik Matlick, founder of MadisonLogic, shared a few observations with me recently:

  • Marketers will get savvier about recognizing the importance of nurturing these contacts and converting them to eventual revenue. The new trend is assigning separate budgets, one devoted to generating “net new” leads and another to nurturing them to the right level of qualification.
  • Suppliers of leads should begin to offer account-level services. Most marketers need to reach multiple contacts in a target account to influence the various buying roles.

I would add my own prediction: The sky’s the limit for creative ways vendors can craft new performance-based marketing programs. Marketers have plenty to look forward to.

A version of this post appeared in Biznology, the digital marketing blog.

Introducing ‘The Integrated Email’ Blog by Debra Ellis

Why is email marketing so effective? Is it the one-to-one communication, ability to connect with customers and prospects on the go, or the provision of instant gratification with one-click shopping? The answer depends on the company and the customer relationship, but there is one universal truth: The combination of interactive communication with self-service solutions makes email the most versatile tool in a marketing workshop.

Why is email marketing so effective? Is it the one-to-one communication, ability to connect with customers and prospects on the go, or the provision of instant gratification with one-click shopping? The answer depends on the company and the customer relationship, but there is one universal truth: The combination of interactive communication with self-service solutions makes email the most versatile tool in a marketing workshop.

My experience with email marketing began shortly after Hotmail launched the first Web-based email service in 1996. A client had compiled approximately 11,000 customer email addresses and wondered what we could do with them. Our first test was a 25 percent discount on any order placed that day. A text-only message was sent using the mail merge functionality in Excel and Outlook. It took over two hours to send all the emails.

Those two hours were quite exciting. We had two computers in close proximity so we could watch the progress of the outgoing emails and monitor sales on the website. Within minutes of starting the email transmissions, orders started flowing in. By the end of the day, more than 1900 orders were received. A handful of people asked to be excluded from future mailings. Over 200 people responded with personal notes. Some were grateful for the discount. Others apologized for not placing an order and asked to receive more emails.

Things are much different today. The novelty of receiving a personalized message from a company is long gone. Spam filters make getting emails delivered a near impossible mission. And the competition for recipients’ attention is at an all-time high. Even so, email marketing remains one of most effective marketing and service vehicles available.

The emails that deliver the best return on investment are the ones that are integrated with the other marketing channels to provide information and service to the recipients. They create a connection between company and customer that motivates people to respond. A successful email marketing strategy builds loyalty while increasing sales.

Many email campaigns today are little more than a systematic generation of one promotional email after another. Discount emails are relatively easy to create and deliver sales with each send, making them a quick way to inject some life into lagging sales. The simplicity of sale marketing combined with solid response rates creates an environment where marketers are reluctant to move beyond the easy, low-hanging fruit.

In addition to generating sales, discount marketing also trains people to always look for the best price before buying the company’s products and services. It is not a sustainable strategy because there will always be another company that can offer lower prices and lure customers away. A better plan is to develop an integrated email marketing strategy that educates and encourages people to develop a relationship with the company. This requires more effort, but it delivers loyalty and long-term results.

Every email that a customer or prospect receives is an opportunity for the company to establish itself as the best service provider and solidify the relationship. Best practices include:

  • Using a valid return email address so the recipient can respond with one click.
  • Sending branded emails that identify your company at first glance.
  • Mixing educational emails that provide “how to” information for products and services with new product launches and promotional messages.
  • Transactional emails that communicate shipping information and challenges so customers aren’t left wondering, “Where is my order?”
  • Highly targeted and personalized emails designed to engage customers and prospects at every point in their lifespan.

Finding the right combination of educational, event and promotional emails requires testing and measuring results for incremental improvements. The resources invested improve relationships, increase sales and create a sustainable marketing strategy.

Note: Over the next few months, we’ll feature winning and losing email marketing strategies and campaigns on this blog. If you would like to share your company’s killer emails, send them to Debra at dellis@wilsonellisconsulting.com.

Best Online Marketing Practices For A ‘Bionic’ Business: Part III

My last two posts, part one and part two, focused on real-life questions I’ve gotten from business owners, as well as my responses. Topics that were covered included free online press release distribution best practices and social marketing secrets for stronger visibility.

My last two posts, part one and part two, focused on real-life questions I’ve gotten from business owners, as well as my responses. Topics that were covered included free online press release distribution best practices and social marketing secrets for stronger visibility.

This final post in the series will share some powerful, yet easy, ideas to help build your list and boost website performance.

Enjoy!

Question: What can I do to start building a list of qualified leads?
Answer: Creating free content is a great way to give something and get something in return. You’re offering free, powerful editorial content. And, in return, you’re asking for an email address from the reader. Creating this type of content isn’t just good for acquisition efforts, it’s also good for branding and establishing you as an expert within your niche. You can then leverage your free content to build your list (prospect database). Your list is your key to future sales. Growing and cultivating your list through editorial is a proven business model from top online publishers. It’s a great way to bond with … and cross-sell to … your readers. And this helps create a loyal following. And, from there, the sky is the limit!

Question: What are some tips to boost sales and eCommerce performance?
Answer: No matter what you’re selling, whether it’s products or a service (i.e. copywriting, freelancing, consulting) you should always have a variety of price points for customers at every level. Offering front-end products and back-end products gives you room to bring in a customer at a low level and up-sell them. As far as eComm ideas:

  • Make Sure Your SSL Seal is Prominent. This is a sign that the site is encrypted … that the information consumers enter, such as personal and credit card information, is protected. Most eCommerce sites must file for an SSL certificate from vendors such as VeriSign, GoDaddy, eTrust, TRUSTe, etc.. It’s a good practice to display the vendors’ logo on your order page, as well as make sure in the browser window the “https” or image of a lock is present. This is a clear and comforting sign to consumers that they can order online with confidence.
  • Encourage Online Sales vs. Other Order Mechanisms. Offer special “Internet Only Pricing” to customers. It could be a discount of 5 percent to 10 percent. This reduces any potential overhead costs for staffing fees such as telesales or order entry personnel.
  • Offer Free Shipping. Many eTailers already factor shipping into their published price, so when there’s a big, flashing banner next to the item saying “free shipping” it gives consumers that extra little push to move forward with the transaction. It boils down to basic psychology. Everyone likes to feel like they’re getting something for free.
  • Use Buyer Feedback To Your Advantage. Have an area on your website or next to select items that says “Customer Favorite” or “Hot Item.” Also, have some glowing customer testimonials next to the product. Consumers like to feel good about the item they are about to purchase. To see a great testimonial and knowing that others purchased the product is a validation and comforting feeling. In addition to helping the conversion, this tactic also helps reduce buyer’s remorse and product returns.
  • Make Sure Your Product Pages are Optimized for Search Engines. After doing some keyword research on actual search behavior for your product, refine your meta description, meta keywords and title tag of your product pages. This will help consumers find your product in the organic listing of search engine results.
  • Have a Special Coupon Code Banner on Your Home Page. Something like, “Summer Blow Out Sale, Use Coupon Code 1234.” This makes consumers feel good about the purchase. In addition, encourage viral activity by having a “forward to friend” text link that opens an Outlook email window with the coupon or coupon code. Make sure to have some great promotional copy mentioning how customers should “pass on the great savings to friends, family, and colleagues.”
  • Consider Payment Plans. For your higher ticket items, consider setting up extended payment plans that allow customers to pay for an item over a few payments. If an item is $200, you might want to offer a flex pay of “6 easy payments of $33.33” that is conveniently auto-billed to their credit card. Just be diligent when calculating your payment prices, as well as creating your return/refund policy for these items. The general rule is that your actual production costs/hard costs should be covered in the first one to three payments.

Holiday Paid Search Analytics Reveal Insights Into Today’s Cross-Channel Shopper

When analyzing early holiday paid search data, it’s readily apparent that shopping is truly a cross-channel endeavor. For instance, the majority of this year’s Black Friday shopping occurred in-store, but consumers used search engines in droves before setting foot in a store. Search helped shoppers map out their in-store Black Friday strategies, informing them exactly where and when they could find the best deals on the products they wanted.

When analyzing early holiday paid search data, it’s readily apparent that shopping is truly a cross-channel endeavor. For instance, the majority of this year’s Black Friday shopping occurred in-store, but consumers used search engines in droves before setting foot in a store. Search helped shoppers map out their in-store Black Friday strategies, informing them exactly where and when they could find the best deals on the products they wanted.

Search played a major role in driving in-store traffic this Black Friday. Performics tracked a huge spike in Google paid search clicks for its clients on both Thanksgiving and Black Friday. Paid search clicks increased 87 percent year-over-year on Thanksgiving and 65 percent year-over-year on Black Friday. Additionally, this year saw the most mobile paid search clicks and impressions ever seen on Black Friday — 400 percent more than 2010.

#INLINE-CHART#

For the second consecutive year, Black Friday clicks surpassed Cyber Monday clicks. The adjacent graph shows three primary spikes in 2010 and 2011 fourth quarter paid search clicks. Black Friday represents the biggest spike, with Thanksgiving and Cyber Monday (which were close to each other) following behind.

Cyber Monday has historically been the biggest online sales day of the year, not Black Friday. In terms of online sales, Black Friday historically ranks behind Cyber Monday, Green Monday (the second Monday in December) and Free Shipping Day. Black Friday drives the most clicks, but the fourth most online sales.

This indicates that consumers use search engines heavily on Black Friday to discover the best in-store deals. Post-recession shoppers are researching on their computers and mobile devices more than ever to find the right combination of quality and price. The rise of mobile, highlighted by the 400 percent year-over-year increase in Black Friday mobile clicks, is the biggest indicator of true cross-channel shopping.

Not only are on-the-go consumers searching for your store locations, but they’re also conducting competitive price searches and looking for product information on their phones/tablets while in your store. According to Performics’ 2011 Social Shopping Study, 62 percent of consumers perform competitive price searches on their mobile devices while in a retailer’s store and 41 percent look for product information.

To capitalize on this cross-channel shopping behavior during the holiday season and beyond, marketers should do the following:

  • integrate online and offline promotional planning;
  • create strong mobile websites;
  • use paid search extensions (e.g., addresses, phone numbers, click-to-call) to aid searchers looking for your store;
  • let searchers know that products are in stock in your stores;
  • ensure visibility in mobile search for keywords likely to be used by shoppers searching for your store while on the go or in-store; and
  • create comprehensive local paid and organic search campaigns.

Marketers should invest in analytics to understand exactly how search marketing affects offline sales. Uncovering insights through data will help you best allocate budgets and create marketing strategies to maximize cross-channel performance.

Showdown of the Holiday Gadget Wish List: Man vs. Marketer

The holiday shopping season is in full swing, and it’s make-or-break time for the hottest category this time of year — consumer electronics. As always, there will be no shortage of choices. Store aisles will be jam-packed with bright, shiny contenders, all competing for a place in your shopping cart.

The holiday shopping season is in full swing, and it’s make-or-break time for the hottest category this time of year — consumer electronics. As always, there will be no shortage of choices. Store aisles will be jam-packed with bright, shiny contenders, all competing for a place in your shopping cart.

I decided to field a survey to find out which gadgets will earn a much-coveted spot in all those stockings hung by the chimney with care. To put a twist on things, I wanted to compare the responses of average consumers versus marketing professionals. Survey respondents included 100 consumers randomly selected from a survey panel and 100 traditional and digital marketing peers.

Most coveted gadgets: the winners
Want to know what to get your favorite marketer this year? The iPad was the hands-down winner among marketers, chosen by one in five respondents. But the iPad isn’t getting the same amount of consumer love — it ranked seventh in a list of 10 items we asked about, with only 8 percent of consumers including it on their wish lists.

What’s on top of consumers’ lists? Flat-screen TVs rule. Maybe those savvy consumers smell a deal? Last year wasn’t a banner year for TV sales, and the inventory glut is leading to heavy price reductions. According to CNN, the average price for a 32-inch LCD TV is just $374. Quite the bargain when compared inch-for-inch against the 9.7-inch iPad screen.

Life beyond Android and iPhone: the surprises
With all the talk about convergence devices that do it all, I didn’t expect to see a decidedly old-school, not-so-one-stop-shop entry in the top three of both the consumer and marketer list — digital cameras. It’s a reminder that there’s still a lot of demand for specialized, single-use devices.

When it comes to mobile, the iPhone was the most mentioned smartphone for both marketers and consumers, fueled by its heavily anticipated arrival at Verizon. Android phones were rock bottom on the list among nonmarketers, with a mere 2 percent hoping for one this holiday. Smartphones (non-Android or iPhone) made a surprisingly strong showing among consumers, tying for third place with the iPhone. In the iPhone- and Android-obsessed world of marketers, it’s easy to forget that there’s a lot of other options out there.

We’re not our target customers: the not so surprising
Over 90 percent of the marketers surveyed labeled one or more of the items they were asked about as a must-have for their holiday wish lists. One in 10 even included additional candidates, including GoogleTV, Xbox with Kinect, Roku and the latest iPod. But the average consumer is definitely less smitten by gizmos and gadgets — over 50 percent said none of the items we asked about will make it onto their holiday wish lists.

The reluctance among consumers to indulge in pricey electronic goodies is consistent with the grim predictions of 2010 holiday spending, such as the recent finding from the NPD Group that “consumers who were considering just cutting back on [consumer electronics] purchases are now not planning to buy anything at all.”

Holiday 2010: the takeaways
While 2011 is shaping up to be the year the iPhone hits mass adoption, there are a lot of other smartphone choices out there. This doesn’t make things any easier for app-slinging marketers, who will have to prioritize the platforms they want to serve.

iPad envy aside, there’s a lot in common between marketers and consumers. For now, most of us are favoring the familiar over the newer-to-market indulgences. Emerging technologies such as 3-D TVs, tablets and e-readers may dominate headlines, but it’s the established devices such as digital cameras and flat-screen TVs that will continue to capture wallet share this holiday season.

As for my list, I’m hoping to get something (or someone) to help carry around all the gadgets I already own. What’s on your wish list?

What Do We Really Know About Consumers?

Turns out American’s didn’t splurge on trivial junk during this recession, and that means many experts don’t know today’s consumer as well as they thought they did.

Turns out Americans didn’t splurge on trivial junk during this recession, and that means many experts don’t know today’s consumer as well as they thought they did. At least that’s the takeaway from this article by Mina Kimes of CNN Money.

The prevailing assumptions about recessionary spending were based on studies of consumer spending during past recessions that showed Americans spending more on cheap indulgences during hard times. But as Kimes points out, that hasn’t held true during this recession. iPhone sales spiked while lipstick, liquor and candy dropped.

Some of those trends saw ups and downs (a previous report by Kimes indicated general cosmetics doing well last year), but overall, 2009’s cash-strapped consumers seemed to make purchase decisions more thoughtfully than in recessions past. Instead of cutting expensive items and indulging on the cheap, they made more complex calculations. They often saved money to buy expensive items, for example, sometimes by cutting out the very indulgences consumers might have wallowed in during “simpler” times. It appears that many took control of their finances instead of living hand-to-mouth, with some surprising retail results.

I wonder how much of that reflects a psychological shift in consumers, and how much reflects shifts in the retail market. Many goods are available at relatively low prices these days thanks to several decades of the biggest retailers competing on price (i.e. Wal-Mart). I’m not sure indulgent lipstick’s that much less expensive than a pair of bargain shoes. On the other hand, consumer electronics is not simply an entertainment purchase. People spend their careers using their personal laptops and smartphones as tools; so spending more can mean more money or better opportunities. Consumers are well versed in the investment calculation of these items: If you have to buy a phone and phone service anyway, why not choose the one you can carry with you and load with apps that make you more productive, or at least more entertained?

Consumers have changed, but the retail landscape may have changed even more. What can you assume about a nation of potential customers who constantly consider that?

That’s probably not surprising to those of you who read Target Marketing or All About ROI, which often talk about the importance of testing and verifying assumptions about your audience. At heart, direct marketing is a numbers game, and those successful at it know what my football line coach used to sum up: to “assume” makes an “ass” out of “u” and “me.”

But even extensive testing doesn’t really take assumptions out of the equation. Who spends resources testing something they don’t expect to work? When you try something new, where did the idea come from? Usually an assumption. So even with testing, there’s a bias to test toward what we believe to be true. Adaptability is learning to recognize and react quickly when things we thought we knew turn out to be wrong.

So have consumers changed during this recession? Has that been the case for your customers? Are they acting against type, buying or not buying in ways that defied your expectations?