How to Connect Digital Media Spend to Revenue Results

Digital media spend is likely one of the largest pieces of the budget. But is it being well spent? How can you tell? The media team and their agencies use a lot of new buzzwords to describe where it is being spent, but at the end of the day CMOs want to know exactly how much revenue that budget drove.

Besides content and labor, digital media spend is likely one of the largest pieces of the budget. But is it being well spent? How can you tell? The media team and their agencies use a lot of new buzzwords to describe where it is being spent, but at the end of the day CMOs want to know exactly how much revenue that budget drove.

Understanding the Media Spend-Revenue Connection

Before we jump to answer how to ensure you are tracking the spend, let’s review what we spend the budget on at a high level. This chart provides a simplified view of the most common channels in North America:

Major North American Media Channels
Credit: Pedowitz Group by Kevin Joyce

So let’s agree the media spend can be divided between paid search, promoted posts, ads, retargeting on social channels, and display and banner ads hosted on other advertising platforms. We don’t have to blind ourselves here with which particular advertising technology (AdTech) is being used to target ads, we are just looking to understand how we track media spend to revenue.

In the Old Days, It Was Simpler

10 years ago, most of our digital media spend was display ads and paid search.

Digital marketing 10 years ago
Digital marketing 10 years ago. | Credit: Pedowitz Group by Kevin Joyce

Back then, the expectation was that a prospect gave you their identity after just one click.

But once you paid for the click, and the visitor didn’t fill in your form, you had no further ability to interact with that person. So a lot of your spend was for naught.

But tracking the spend was easy. We used UTM parameters that were picked off by the forms on the website and this enabled connecting a lead source directly to the media spend. If our digital team was smart, we had all the UTM parameters and knew what campaign and ad generated the leads. All that was left to do was carry this info over to our contacts and accounts, and onto the opportunities and we had a media spend to revenue connection. Fast forward 10 years.

Channel Complexity From Digital Media on Social Platforms

The addition of extra channels, including the social channels makes tracking media spend back to revenue more difficult because there may be multiple interactions between a prospect and you, many of them paid for by you before they become known to you.

Digital marketing today.
Digital marketing today. | Credit: Pedowitz Group by Kevin Joyce

So now we can expect that a prospect won’t surrender their identity until they click eight or more times on your ads and content. But there is good news here. When they do click on an ad, or a blog post we are paying to promote, they get a cookie placed on their device. This allows us to target only people with that cookie with very specific ads (retargeting). So, it keeps our costs down, and those retargeting ads lead to forms that capture all the UTM parameters we talked about earlier. Also, if we are using a marketing automation platform, and that was the cookie we placed on their device, then all of their anonymous behavior is recorded and associated with the lead when they finally fill in a form.

Two important things happened in that last scenario:

  1. We got the ability to continue to market to individuals who clicked, but didn’t fill in a form by virtue of the social platforms providing the retargeting feature.
  2. We got to associate all the multiple interactions of an anonymous prospect, to our content, drive by media spend, because we were using a marketing automation platform.

Connecting the dots – media spend to revenue

So now the complete picture for showing attribution for media spend looks like this:

  • The top of the funnel focus is on getting people cookied (no form required here)
    • Once cookied we can track their behavior with our digital properties and content
  • The next step is to retarget those cookied people to get them to a form to identify themselves
    • Once we know who they are we connect their past anonymous behavior to the new lead
  • The next step is to start email nurturing to them with very targeted offers
  • Finally, they warm up, become SQLs, we connect them to opportunities.
  • All the UTM information, and the anonymous interactions captured in the marketing automation platform can associate your media spend with the closed won opportunities.

I simplified a few things, but the key point is this. It is possible to connect media spend to closed won opportunities. The proper usage of UTM parameters and your marketing automation platform can make this possible. Make sure your team can tell you how much revenue comes from the media spend and calculate the lag time.

How to Negotiate a Risk-Sharing Marketing Contract

The marketing service company’s smooth and promising presentation assures me that hiring it will certainly grow my business. “Trust us,” they say, “We have a winning strategy and we’ll all celebrate the fantastic results.”

marketing negotiations
“Salary Negotiations,” Creative Commons license. | Credit: Flickr by MIke Kline

The marketing service company’s smooth and promising presentation assures me that hiring it will certainly grow my business. “Trust us,” they say, “We have a winning strategy and we’ll all celebrate the fantastic results.”

I want to believe them, but they come at a high price and we are not rolling in cash during these difficult and fast-changing times. If I were the potential client and they offered to minimize my front-end cost and share the risk of under-performance, I‘d find their proposal very attractive and credible. I’d feel comfortable sharing success with someone who is willing to share failure.

Entrepreneurs know that a strong component of commercial success depends upon getting their businesses noticed and engaging customers to buy their products or service. They also know or should know that this marketing and advertising task can consume substantial resources. If they can get their marketing partners to share this investment, through some form of split of the generated revenue, it can be a definite win-win. That’s why revenue-sharing and other forms of remuneration are becoming the new normal.

The historic 15 percent “commission” system was the basis for agency remuneration in the days of “Mad Men,” but tougher times have diminished the number of martinis and brought with them far more competitive systems of compensation. Now they are being asked — compelled, in some cases — to put their money where their mouths are: to mutual benefit. Some of the world’s most successful direct response copywriters have done this for years, and the winners have earned enormous sums from grateful clients who tried and tried, but were unable to beat the controls they created years ago.

Some years past, on a conference panel, I asked an advertising sales director of Globo TV (Brazil’s largest media company) what value he put on a 30-second commercial slot that Globo had failed to sell. Looking at me as if I were an escapee from a gringo nut house, he said it was obviously worth nothing. What, I then asked, if a potential advertiser were willing to guarantee to pay? Say, 35 percent of the normal price for any unsold advertising spots, a standard procedure in the U.S.? He emphatically said he would never even consider it. If he still has a job, it is unlikely he would take that view today, when Google is gorging itself on 80 percent of the fall in broadcast and print advertising.

To make revenue share work, the agency, consultancy or service provider needs to carefully do its homework. This “communicator” will first need to be able to assess the real cost of the time of the professionals who will be involved in the project.

Peter Rosenwald's Chart 1

Using a matrix like this, which sets various ranges of monthly compensation, assumes 1,800 (or some more appropriate number) of working hours per year, it’s easy to see the “Actual Cost Per Hour” for each category of professional. But we all know that 100 percent of the hours will not be billable. (Sometimes, there really isn’t much to do but chat on Facebook.) So we make a guesstimate of the percentage (here, 60 percent) of billable hours and increase the “Cost Rate” accordingly.

And of course we want to make a profit. (That’s the name of the game, isn’t it?) So to establish a minimum “Bill Rate,” we gross up the “Cost Rate” accordingly. And finally, we can round it up if we wish.

The professional responsible for pricing this project only has to input the number of professionals in each category and the estimated number of hours each will have to spend on the project and ZAP, the professional costs (including the percentage for hours not billable and the profit-loaded (29.3 percent) quotation amount for the professionals) is ready and waiting.

Collecting the other costs for the project, data, media, etc., (with or without mark-ups depending on policy and competitive pressure) and then adding them to the professional costs provides the essential baseline for a revenue share negotiation. You know your real costs and you know these costs with profit and the amount you would quote as a fixed fee. The old wise adage says; Never gamble more than you can afford to lose. That wisdom should inform what “revenue share” you are prepared to accept.

Peter Rosenwald's Chart 2

But that’s only from the communicator’s side.

What does the “marketer” have to know? And more importantly, what does he need to share with the communicator?

The answer is simply how much he can afford to get an “open,” a clickthrough, a lead or a final sale. Which of these he wants from the communicator depends upon his briefing of the communicator and whether the marketer knows his historic metrics for the journey from advertising through to the final sale. Keeping it simple, let’s assume that the marketer knows his numbers and has an expectation of selling 500 units at $850 each. He can afford it, but is unlikely to want to pay 10 percent of $85 per unit sold.

Peter Rosenwald's Chart 3

Because the communicator knows that to make his profit objective, he needs $26,125 or an alternative revenue share and must have a minimum of $19,592 to break even, he is well prepared to enter into a revenue-share negotiation.

Let’s look at it this way.

The communicator’s leverage for negotiation is the spread between his cost $19,592 and his quotation amount $26,125. To make its quotation amount, the communicator needs just $52.25 per sale. To cover his cost, he only needs $39.18. If the communicator receives $52.25 per sale, he only needs 375 sales to recover his costs. If the actual sales number is above 500, say, 550, the communicator will receive his full quotation amount plus 50 times $52.25, or an additional $2,612.

The question for the communicator is how much to ask for? Sixty percent of the $85 allowable would give $51 per sale — just short of the $52.25 needed to make the quotation amount at 500 sales: 50 percent would be $42.50. Not bad. Looked at from the marketer’s side, with no up-front cost, sharing the $85 allowable on a more or less equal basis should seem fair.

Peter Rosenwald's Chart 4

I’d argue for $50 per sale as a good compromise, but each negotiation is different and each person will have to define his own limits. Hopefully, the use of these tools and this methodology will help.

Peter Rosenwald's Final

Drive Your Buyer’s Lifecycle, Increase Revenue and Retention

The process of acquiring and sifting traffic into engaged, and ultimately buying, prospects is critical to your customer acquisition efforts. Managing your audience is often referred to as the early stage of the “Customer Journey.” In this post, we’ll focus on the core and most pivotal part of your relationship

The process of acquiring and sifting traffic into engaged, and ultimately buying, prospects is critical to your customer acquisition efforts. Managing your audience is often referred to as the early stage of the “Customer Journey.” In this post, we’ll focus on the core and most pivotal part of your relationship with the consumer — purchasing from your brand.

Based on some years of experimentation and measurement, we can share a simplified and highly actionable approach that can make a difference in how you value and grow value among customers. This is the buyer lifecycle.

Mike Ferranti chartProspects: Before They Are Customers
Prospects, of course, come from many places: word of mouth and direct visits to your website and to your retail stores. Advertising and search drives them to on- and off-line points of sale. Prospects can be those who simply signed up on that ever-larger email signup popup on your homepage, or those who put items in a cart and “almost” purchased, but abandoned.

But prospects can also be those who we leverage statistical intelligence to hand-pick. Not just look-alikes but the “buy-alike” prospects with the highest potential value. See my prior column called “The Most Important CRM Metric You Might Be Missing.”

All of these prospects have the same thing in common, they have not purchased, and a level of investment and communications will be required to drive them to the next step. This cannot be overlooked without consequence. Prospects, regardless of the level of engagement or targeting, have a massive, and in some cases, a predictable difference from the buyers you seek to drive incremental sales from — they lack the most powerful signal of all behaviors — actually spending with your brand. Commonsensical enough, perhaps — but the prospect ‘batch and blast’ marketing that pervades retail emailers typically makes the challenge harder. Customer Intelligence is required to target, learn and test your way into viable prospect conversion strategies. We reiterate this point as it is often assumed that prospects, when contacted, will just buy — and they don’t. The bar is higher (see “Bigger is Better: How to Scale Up Customer Acquisition Smarter” for how to target the right customers, and the sophistication your competitors may be leveraging already).

To be sure, an analysis of your prospect base, which in a great many organizations is actually called the “email file” — another issue, in itself ― will help you determine who is likely to buy and who is not. This can be achieved by considering engagement measures, like opening and clicking your emails, visiting the website and micro-conversions. While these behaviors are correlated with the move from prospect to buying, it is not uncommon for the “average” prospect files to contain too many records of individuals who will never buy — they are lookers, not buyers. They may lack the means, intent or occasion to buy — or they may have experienced some change in their lifestage that moved them out of the market for your product. The opportunity is in identifying the highest value prospects and investing more thoughtfully in converting them.

Cats, Cars, and Cuddles: How to Reduce Inventory and Raise Revenue

For this promotion, making a modest financial gift to the Humane Society while Uber delivers kitten’s right to my office seemed like a no-brainer.

When I first opened the email I thought it was a joke.

Uber Kitten Email

Nina, the local manager for Uber in my area, was letting me know that they were partnering with the Humane Society to deliver furry, lovable kittens for cuddle sessions … for a small $30 snuggle fee. Wow … Really? (I thought excitedly.)

The fact is, I love cats (don’t tell my dog)… but my husband is not a big cat fan — especially after our last 12-year-cat-from-hell stint with the Tasmanian devil that I took pity on and rescued from a shelter. That little bundle of evilness barely let me scratch its head before he raked his incredibly long and sharp claws across my hand and arm. But that’s a story for another day.

For this promotion, making a modest financial gift to the Humane Society while Uber delivers kittens right to my office seemed like a no-brainer.

It turns out that other cities across the US were doing the same thing — as well as in Canada and Australia. The Humane Society/ASPCA/Local Shelter, partnered with Uber drivers to try and help raise money and increase adoptions.

West Michigan reported that their shelter raised nearly $1,000 during their four-hour event — and 83 percent of their participating kittens were adopted. In fact the demand was so high they couldn’t even make it to all the businesses!

In 2013, the first year of this cross-promotion, three cities raised $15,000 and found homes for 100 percent of the traveling kitties. So that makes it a definite win-win.

Uber, who has had some challenges in Australia when they were accused of charging $100 for ride fares during a hostage crisis in Sydney, seems to have created some positive press for a change.

Personally, I love cross-promotions like this. The Humane Society wins (with both gift revenue and an increase in adoptions), businesses win (employees who aren’t allergic to cats get some much-needed kitty cuddle time), and Uber wins with increased awareness and a chance to generate some goodwill.

Now, if only I could sneak one of these sweet little kitties past my dog (and my husband), and they’d have a win-win-win-win-win!

How Many Leads Do You Need?

One key to successful B-to-B lead generation programs is to calculate exactly the right number of qualified leads to provide to sales—as part of your campaign planning. If you generate too many leads, you’ll be wasting precious marketing dollars. If you generate too few, your firm may be at risk of missing its revenue targets, with potentially disastrous financial implications. Moreover, you’ll annoy your sales team by not supporting them properly. So, let’s look at a neat way to figure out in advance how many leads your company needs, so you can invest accordingly.

One key to successful B-to-B lead generation programs is to calculate exactly the right number of qualified leads to provide to sales—as part of your campaign planning. If you generate too many leads, you’ll be wasting precious marketing dollars. If you generate too few, your firm may be at risk of missing its revenue targets, with potentially disastrous financial implications. Moreover, you’ll annoy your sales team by not supporting them properly. So, let’s look at a neat way to figure out in advance how many leads your company needs, so you can invest accordingly.

This easy method uses your sales people’s quotas to back your way into the number of leads required, based on sales productivity per lead. You will need four numbers:

  1. The average revenue quota per rep, in the period, whether it’s a year, or a quarter, or a month.
  2. The average revenue per order, or per closed deal.
  3. The percent of their quota that the sales people generate naturally, without the help of leads. This revenue typically flows from repeat sales, from deeper penetration within the accounts, or from referrals.
  4. The conversion rate from qualified lead to sales.

The first three numbers are likely to come from a discussion with sales management and your finance department. The last number you probably have on hand, from sales and marketing experience.

Here’s an example of how to do this calculation, based on a set of hypothetical numbers that might be common in large-enterprise selling environments. We are saying that each rep is on the hook to deliver $3 million in sales in the period. As a first calculation, subtract out the percentage of that revenue that the rep can produce without any leads supplied by marketing. In this example, it’s 40 percent self-generated, leaving 60 percent, or $1.8 million, that the rep needs help with from marketing.

We divide that remaining revenue by the average deal size, which is $60,000 in this example, to get the number of closed deals that each rep, on average, needs to complete to deliver on the revenue quota. In this example, it’s 30 deals.

Finally, we divide the number of deals required by the lead-to-sales conversion rate, which is 20 percent in this example. Voila. Now we know that each reps needs, on average, 150 qualified leads to make quota.

You can also take this to the next step and calculate the campaign inquiries required by dividing the 150 leads by your inquiry-to-lead conversion rate. With that, you can plan your campaigns to generate enough inquiries for your pipeline that will convert to a known number of qualified leads, and thereafter to the needed revenue.

So, with this simple math exercise, you can avoid waste and keep your sales reps as productive as they can be. Do you use another method that you can share?

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

Marketing ROI in B-to-B: Why Is It So Hard, and What Can We Do About It?

The other day, I had the pleasure of discussing the challenges of marketing ROI with Jim Obermayer, CEO and executive director of the Sales Lead Management Association, on his Internet radio show. Our conversation got me thinking: Why is the Holy Grail of marketing ROI so tough to achieve in business markets? And what can we do about it?

The other day, I had the pleasure of discussing the challenges of marketing ROI with Jim Obermayer, CEO and executive director of the Sales Lead Management Association, on his Internet radio show. Our conversation got me thinking: Why is the Holy Grail of marketing ROI so tough to achieve in business markets? And what can we do about it?

The “why” part is pretty clear: Business buying cycles tend to be long, and involve multiple parties at either end. Marketers produce campaigns to generate an inquiry, and then qualify that interest with a series of outbound communications, and finally pass the qualified lead to a sales rep for follow up. From that point, it can take more than a year to close, and involve a slew of people on the customer side, from purchasing agents, to technical specifiers, to decision-makers.

The sales process is also complex, involving not only the face-to-face account rep, but sales engineers, inside sales people, and others who help get all the buyers’ questions answered, negotiate the terms, deliver, install and trouble-shoot the product, and whatever else needs to be done to satisfy the customer’s needs.

So, consider the difficulty of establishing the numbers that go into an ROI calculation in this kind of situation. Just to put a definition behind the concept: ROI, meaning return on investment, subtracts the marketing expense from the revenue generated, and then divides by the expense, resulting in a percentage that shows how much net return was produced by the investment.

But in this lengthy, multi-party, multi-touch selling situation, the “investment” part can be pretty tough to get at. Frankly, it’s a bit of a cost accounting nightmare, assigning an expense number to each sales and marketing touch that resulted in a particular closed deal. This brings up issues of variable versus fixed costs, marketing touch attribution—the list goes on and on.

Worse, the “return” part presents its own challenges. First problem is connecting a particular lead to a particular piece of revenue, which means carefully tracking a lead over its multi-month process toward closure.

Further, if a third-party distributor or agent is working the lead, it’s very likely that revenue results reporting is not part of the deal. With good reason: The distributor considers the relationship with the end-customer as his, and none of the manufacturer’s business. So the marketer who generated the lead often has no visibility into the associated revenue. Even if the deal was closed by a house rep, you’re looking at the endless squabble between sales and marketing about who gets the credit.

You can’t blame B-to-B marketers for throwing up their hands and relying on interim metrics like response rate and cost per lead. Especially when marketing staffers come and go, and may not even be in the job when the lead generated a while ago finally converts to a sale.

This is why I was so pleased at the arrival of the new book by Debbie Qaqish, The Rise of the Revenue Marketer, where she urges marketers to raise consciousness of their role in driving revenue results. “The revenue marketer uses the language of business,” she says. Examples of the metrics she recommends for revenue marketers include funnel velocity, sales conversion rates, pipeline revenue and campaign ROI.

My conclusions from this investigation:

  • Begin with a deep conversation with your finance counterparts to get at the best way for marketing to serve your company’s financial interests, like:
    • The right approach to assigning sales and marketing expense.
    • Whether to calculate returns based on net sales or on gross margin.
    • Decide which expenses are fixed and which are variable.
    • How to attribute the contribution of sales and marketing touches across the sales cycle.
    • Setting the ROI “hurdle rate” needed to support your company’s profitability goals.
  • Figure out where to get the revenue and expense data—not everything will be in your CRM system. Your finance counterparts should be help you source the data you need.
    • If a distribution channel party is a roadblock to revenue visibility, conduct a “did you buy” survey into accounts to which qualified leads were passed.
    • If the account-based revenue is captured internally, try supplementing your CRM system with data match-back to connect campaigns to sales, circumventing the arduous process of following a lead along its complex conversion process.
  • Set clear objectives for each marketing expenditure, so you know how to declare ROI success when you see it.
  • Get inspiration from The Rise of the Revenue Marketer, Debbie Qaqish’s innovative thinking on the role of marketing in B-to-B.
  • Get an education from Jim Lenskold’s 2003 classic, Marketing ROI: The Path to Campaign, Customer and Corporate Profitability.
  • If to many obstacles are in the way, fall back and rely on “activity-based” metrics like cost per inquiry and cost per qualified lead, which tend to be pretty easy to calculate, being mostly within the purview of marketing.

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

5 Reasons for ‘Why Now?’

With the lingering, precarious feelings about the state of the economy, along with plenty of concerns about the business climate in general, I find that there is always a great deal of hesitation around beginning any kind of large- or even medium-complexity project focused on data. In many instances, the general consensus from senior management and even ancillary groups outside of the marketing and data management groups is the company has been doing fine with everything just the way it is, with plenty of “If it ain’t broken we don’t need to fix it” or “Let’s focus on increasing revenue this quarter first” pushback to proposed projects.

With the lingering, precarious feelings about the state of the economy, along with plenty of concerns about the business climate in general, I find that there is always a great deal of hesitation around beginning any kind of large- or even medium-complexity project focused on data. In many instances, the general consensus from senior management and even ancillary groups outside of the marketing and data management groups is the company has been doing fine with everything just the way it is, with plenty of “If it ain’t broken we don’t need to fix it” or “Let’s focus on increasing revenue this quarter first” pushback to proposed projects.

The problem with the first is, quite simply, if corporate data has been ignored, or even just on the back burner for any length of time, it is most assuredly broken. Perhaps it is not critically broken yet, but losing clarity, focus and relevancy in keeping up with the evolving goals of the organization. Bloated with obsolete or irrelevant information and systems fragmented; lagging behind on improvements and upgrades, databases become slow, unreliable and frustrating for both the front-line users and for their management teams who are looking for answers that are surely there but, unfortunately, cannot be mined with the speed and efficiency expected. Of course, when this occurs the frustrations grow and we begin to see various business groups take what pieces of data fit their responsibilities and start building and updating the silos which eventually hamper, rather than contribute to, enterprise-wide success. There is no feedback of newer and more relevant information to the main repository; there is no coordination of contact strategy or organized tempo or voice to communication. What evolves is chaos in overlapping or possibly opposing communication from different areas of the same company. It is a sure way to spur the erosion of customer respect for your products and services, along with a vision of incompetence from prospective customers confused by who you are and where you are trying to lead them.

The problem with this is most organizations will not recognize it as a problem. The groups creating the silos and working from there are perfectly happy to have their own source of whatever data they need. No hassles with requests or production queues. They are able to report the results of their efforts in isolation so management only has to see the rosiest picture. Unfortunately—and exactly because of the isolation factor—little if any sales, lead generation, updates or contact changes ever make it back to the primary data warehouse and the remainder of the organization is not able to share in the refreshed information that will help their efforts, as well.

The cure for that, and the answer to the “Let’s wait” feedback, is for the marketing and IT leaders to jointly be prepared with a roadmap of “Why now” proposals for the value of organizational refresh and consolidation that can resonate across the enterprise.

1. Cost containment: With a single platform view of customers and prospects, with vigorous updates and enhancements from every touchpoint, campaigns are able to be streamlined, based on full knowledge of RFM. Consolidation of duplicated software and vendor charges that are being utilized across multiple silos will allow every department to free up much-needed budget space.

2. Increased Productivity: With budget room made available, allocations can be shifted to incorporate the speed and upgrade solutions within the existing resources. Increasing both throughput and volume while optimizing manpower performance and efficiency.

3. Reducing Risk: Utilizing a centralized team to oversee data operations ultimately reduces the risk and exposure caused by violations of corporate policies, governmental regulations and industry best practices. Contact preferences are able to be maintained and shared across all corporate business units on every channel.

4. Customer Journey: No responsible marketer deliberately sets out to overwhelm, annoy or even spam existing customers and prospects. Without centralized deployment and tracking, however, you will be doing exactly that, oblivious to the damage you are doing to your reputation.

5. Increased Revenue: Removing all of the risks, poor decisions and duplication of effort alone will create a much more streamlined approach to providing all of the proper and most effective strategies for finding, developing, nurturing and hopefully establishing long-lasting client relationships. Consumers, regardless if in a B-to-C or B-to-B environment, buy from companies they respect and trust. Revenue grows and is sustained just as steadily by the quality of your relationship with customers as it is by the quality of your products and services.

Healthy, professional relationships and contact strategy are the value-added-benefits you can quantify and demonstrate to even the most ardent rebels across the company. Use the data you have readily available in your system to show every business unit leader the facts. Prove to them the upside potential that a solid, professional and, most of all, highly reliable marketing automation or CRM solution can provide in boosting revenue year over year. Stealthily, but honestly turn the naysayers into advocates with clean and simple facts.

Do that, and the conversation shifts from “Why Now?” to “How Soon?”

Email Marketing Redefined: Driving Sales

Increasing sales is the primary objective for most email campaigns. Email marketing works so well for driving revenue that people forget it is a multifaceted tool. There is a tendency to create a template and then delegate its population to a lower level team member. Doing this provides consistent revenue generation without requiring allocating additional resources. Since it works so well, why invest in making it better. The argument against the status quo in email marketing is simple. Redefining your strategy increases sales, improves loyalty and reduces costs.

Increasing sales is the primary objective for most email campaigns. Email marketing works so well for driving revenue that people forget it is a multifaceted tool. There is a tendency to create a template and then delegate its population to a lower level team member. Doing this provides consistent revenue generation without requiring allocating additional resources. Since it works so well, why invest in making it better

The argument against the status quo in email marketing is simple. Redefining your strategy increases sales, improves loyalty and reduces costs. It is an investment that delivers a strong return. The best thing about changing your strategy is that it can be done without having a negative effect on revenue. There is no down time or culture shock if you implement the execution gradually. To do this, plan your new approach complete with expected responses from your customers and then start adding your new messages to the mix.

If you are uncomfortable about making changes because your email campaigns are working so well, select a segment of customers to test your new strategy. Comparing the results with your control will help you determine the best way to go forward. In addition to guiding you down the right path, the results provide analytical proof that making the changes benefits your company.

There are four types of emails that contribute to short-term sales and long-term growth—Promotional, Highlight, Trigger and Informational. There may be some crossover between the types, but each email should have one primary objective. Limiting the focus improves response and makes it easier to measure results. A singular message is less confusing to recipients. People respond better when they know exactly what you want them to do.

  • Promotional emails include special offers, discounts and events. They are time sensitive and predictable. With a little history, marketers can project the number of orders and amount of revenue generated from each planned email with a high level of accuracy. People respond well to promotional emails because of the time sensitivity and the opportunity to save money or participate in an event. This is the staple of your email strategy because of the effectiveness in delivering short-term revenue.
  • Highlight emails showcase products and services. They may be used to introduce new items or share additional information on established ones. These emails are most effective when sent to segmented lists of people who have shown an interest in the items by inquiry or purchase. They deliver a higher return on investment than promotional emails because the items are offered at full price.
  • Trigger emails put your marketing on autopilot. They are designed to automatically transmit when people perform specific actions. They can be used to welcome new subscribers, provide transactional information and convert abandoned carts. Best practices begin with the creation of the emails and follow with consistent review of the results to provide continuous improvement.
  • Informational emails educate your customers and prospects. They may include promotional information in the form of links, but their primary objective is to teach people how to use your products and services. It’s very easy to presume that the people that shop with your company know what they need and what you provide. This presumption costs you money because it is rarely true. Educated customers and prospects are more loyal and buy more often. Teaching people what they need to know provides long-term value.

To get started redefining your sales strategy:

  1. Review your existing campaigns. Make a list of what works, what doesn’t and what’s missing. Do you have an abandoned cart strategy? Are informational emails sent on a regular basis? When was the last time you changed your welcome email? Are products being introduced and highlighted?
  2. Outline your new strategy. Define and prioritize your corporate objectives for your email marketing. Using the review, identify opportunities to increase sales, reduce costs, improve loyalty and accomplish any other objectives. Rank the opportunities by how well they match corporate priorities. Document the results so you will have a path to follow.
  3. Test everything. Create an email or series of emails designed to fulfill a high priority objective. Select a segment of customers or prospects most likely to respond to your campaign. Define specific goals to be achieved before sending the first email. Send the emails, review the results and revise as needed. Repeat.

Expanding your email arsenal to include trigger, highlight and informational emails changes your strategy from one-off offers to integrated campaigns. It engages customers and prospects and makes them more responsive to all of your emails. Isn’t it time to do this for your business?

USPS ‘Green Teams’ Net $58 Million – If Only Government Postal Policymakers Were So Innovative

Amid the doom and gloom of overall postal finances—where members of Congress and the White House probably have more to do with the current woes of the U.S. Postal Service than all the email in the world—came a timely press announcement from the USPS’s sustainability officer. Posted Feb. 24, I include the full text of the press release here, followed by some commentary: Green Teams Help Postal Service Save Millions

The Postal Service recycled 215,000 tons of material, which saved $14 million in landfill fees and yielded $24 million in new revenue. Employee lean green teams were key to helping the Postal Service achieve the savings and revenue, part of which included more than a $20 million decrease in supplies spending from the previous year.
—USPS Press Release (February 24, 2012)

Amid the doom and gloom of overall postal finances—where members of Congress and the White House probably have more to do with the current woes of the U.S. Postal Service than all the email in the world—came a timely press announcement from the USPS’s sustainability officer.

Posted Feb. 24, I include the full text of the press release here, followed by some commentary:


Green Teams Help Postal Service Save Millions

WASHINGTON, Feb. 24, 2012 /PRNewswire-USNewswire/ — The U.S. Postal Service saved more than $34 million and generated $24 million in 2011 by reducing energy, water, consumables, petroleum fuel use and solid waste to landfills, conservation efforts encouraged by the Go Green Forever stamps. The Postal Service recycled 215,000 tons of material, which saved $14 million in landfill fees and yielded $24 million in new revenue. Employee lean green teams were key to helping the Postal Service achieve the savings and revenue, part of which included more than a $20 million decrease in supplies spending from the previous year.

“Across the country, postal employees are participating in more than 400 lean green teams. Motivated by our sustainability call to action, ‘leaner, greener, faster, smarter,’ they are producing significant results in energy reduction and resource conservation,” said Thomas G. Day, Chief Sustainability Officer.

Lean green teams are another way the Postal Service fosters a culture of conservation, and builds on the agency’s long history of environmental and socially responsible leadership. The teams help identify and implement low- and no-cost sustainable practices to help the Postal Service meet the following goals by 2015:

— Reduce facility energy use by 30 percent,

— Reduce water use by 10 percent,

— Reduce petroleum fuel use by 20 percent, and

— Reduce solid waste by 50 percent.

According to Day, the Postal Service plans to deploy lean green teams nationwide in 2012 to help achieve these goals.

“With more than 32,000 facilities, a presence in every community, and the largest civilian fleet in the nation, we know how important our efforts are to make a positive impact on the environment,” Day added. “Our lean green teams are an important part of our conservation culture, and the effort to reduce our carbon footprint.”

The Postal Service buys sustainable materials and works to reduce the amount of supplies it purchases. The agency first developed a “buy green” policy more than 13 years ago, and has a goal to reduce spending on consumables 30 percent by 2020. Additionally, the Postal Service is working to increase the percentage of environmentally preferable products it buys by 50 percent by 2015. Environmentally preferable products are bio-based, contain recycled material, are eco-labeled and are energy and water efficient.

In its shipping supplies, the Postal Service uses post-consumer recycled content materials, which are diverted from the waste stream, benefiting the environment and helping customers go green.

The Postal Service has won numerous environmental honors, including the U.S. Environmental Protection Agency’s (EPA) WasteWise Partner of the Year award in 2010 and 2011, the EPA’s National Partnership for Environmental Priorities award in 2011 and the Climate Registry Gold award in 2011.

USPS is the first federal agency to publicly report its greenhouse gas (GHG) emissions and receive third-party verification of the results. For more information about the Postal Service’s sustainability initiatives and the Go Green Forever stamps, visit usps.com/green and the usps green newsroom.

USPS participates in the International Post Corporation’s Environmental Measurement and Monitoring System, the global postal industry’s program to reduce its carbon footprint 20 percent by 2020 based on an FY 2008 baseline.

The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.

A self-supporting government enterprise, the U.S. Postal Service is the only delivery service that reaches every address in the nation, 151 million residences, businesses and Post Office Boxes. The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations. With 32,000 retail locations and the most frequently visited website in the federal government, usps.com, the Postal Service has annual revenue of more than $65 billion and delivers nearly 40 percent of the world’s mail. If it were a private sector company, the U.S. Postal Service would rank 35th in the 2011 Fortune 500. In 2011, the U.S. Postal Service was ranked number one in overall service performance, out of the top 20 wealthiest nations in the world, Oxford Strategic Consulting. Black Enterprise and Hispanic Business magazines ranked the Postal Service as a leader in workforce diversity. The Postal Service has been named the Most Trusted Government Agency for six years and the sixth Most Trusted Business in the nation by the Ponemon Institute.

SOURCE U.S. Postal Service

Thank you very much Thomas Day and thank you to each member of the 400 lean green teams at USPS.

Further, the $58 million in bottom-line gains were an improvement over the $27 million in such benefits reported by USPS a year ago. That’s more than double the financial improvement.

As a blueprint for other businesses, many with “green teams” of their own, this USPS announcement offers item-by-item suggested areas of operation companies might focus on to accrue bottom-line gains: facility energy use, water use, fuel use and solid waste generation and diversion.

Perhaps too many business leaders and marketing practitioners still equate sustainability initiatives with “do-good, feel-good” activities that are nonetheless costly or associated with premiums. They best start thinking otherwise. The more quickly brands can leverage green teams for operational gain, and incorporate sustainability as the next great wave of business cost-savings and innovation, the better off their bottom lines will be.

USPS is proving to all of us that there is a “lean” in “green,” and that waste and inefficiencies are cost centers that must be managed. The environmental gains that are driven by such successful management are numerous, and very well may engender good will among employees and customers. Nothing wrong—and everything right—with that, particularly when the financial bottom line benefits are so demonstrable.

Some skeptics might still say, with billions in deficits, USPS cost-savings announcements tied to sustainability are akin to rearranging deck chairs on the Titanic. I believe, however, that USPS management does have a business-like approach to fixing its finances in a digital age, has put forth a credible path to do so, and Congress and The White House need to be facilitating these decisions instead of standing in the way.

Unfortunately, Congress and The White House happen to be two U.S. institutions that are very challenged by balancing budgets.

The Congressional cry of “not in my backyard” over post office closures is part of that symptom, particularly when the USPS has proposed many retail outlet alternatives that are more convenient to citizens, and far less costly to postal ratepayers. The recent Congressional moratorium until May 15 toward consolidation of mail processing facilities is another cog in the cost-savings wheel. Meanwhile, the White House just can’t seem to let go of forcing through a 2010 “exigency” postal rate increase (in its current, proposed federal budget) that, in effect, undermines the entire rationale and integrity of indexed rate caps built into the 2006 postal reform law.

Perhaps there needs to be “lean green teams” at work inside the policymaking offices of Congress and the White House, too. Certainly, sustainability concepts—environmental, social and financial—could work to extraordinary effect inside government, just as it’s doing in forward-thinking businesses everywhere, and trying to do with great success inside the U.S. Postal Service.

Helpful Links:
USPS Press Release covering Green Teams in 2011

USPS Press Release covering Green Teams in 2010

What’s On the Minds of Email Marketers

I lead a chat session with attendees of eM+C’s Retail Marketing Virtual Conference & Expo late last month and enjoyed the dialog and all the questions raised. It’s clear that even though email marketing is a pretty well-established channel, it’s still not fully understood – or utilized – by the people tasked with generating higher response and revenue from it.
 

I lead a chat session with attendees of eM+C’s Retail Marketing Virtual Conference & Expo late last month and enjoyed the dialog and all the questions raised. It’s clear that even though email marketing is a pretty well-established channel, it’s still not fully understood — or utilized — by the people tasked with generating higher response and revenue from it.

Two questions came up repeatedly (perhaps you struggle with these issues, too, and will share what you’ve learned or offer other questions that challenge your program’s success):

1. What can email practitioners do to keep up with their brethren on the social marketing side, who seem to get all the attention and new resources these days?

Just because social marketing hasn’t killed email (all the dire predictions are well dismissed by now), it doesn’t mean that email marketers can rest on their laurels. You have to continue to innovate and improve the experience for subscribers. Email marketers must prove that the channel can grow revenue in order to get more funding and resources.

First, the solution is in smart segmentation, intelligent content strategy and the discipline to match message cadence to the needs of different subscribers. Automation and triggering technology is readily accessible from most email broadcast vendors. Be careful, however, because just sending more and more messages won’t build long-term revenue opportunities. (It might generate revenue in the short term, which is why too many marketers fall into that trap.)

Email marketers must send more of the kinds of messages that subscribers value — e.g., post-purchase offers or reminders; information that helps to make renewal decisions; or tips on how to improve productivity, lose weight this summer or look good in front of your boss (or kids). Try the following three ideas for improved results, higher customer satisfaction and more executive attention:

* Segment and customize content that’s regularly consumed on mobile devices.
If you don’t know what this might be, ask your subscribers! Optimize your mobile rendering by trimming out images and unnecessary links. Streamline your content by sending shorter bits of info more frequently than one longer message.

* Treat customers and prospects differently. They have different relationships with your brand. Even simple segmentation can make a huge difference in relevancy and response — and lowering spam complaints.

* Send fewer generic messages and product announcements in favor of custom content based on customer status, product ownership and recent activity. For B-to-B marketers, acknowledge products customers already own, and celebrate things like anniversaries and renewals. For B-to-C marketers, sitewide sales can be effective, but only if they’re perceived as being somewhat unusual and unique. Customize sales for key segments of your audience, even if that means just changing the subject line or which content is at the top.

You can’t earn a response if you don’t reach the inbox — something that’s becoming increasingly harder to do. Mailbox providers like Yahoo, Gmail and corporate system administrators are using reputation data pulled from the actual practices of individual senders to identify what’s welcome, good and should reach the inbox versus what’s “spammy,” unwelcome, and should go to the junk folder or be blocked altogether.

This creates both friction as well as opportunity. Email marketers must keep their files very clean, mailing only to those subscribers who are active and engaged. And to be welcome, they must create better subscriber experiences. Sender reputation is based on marketers’ practices and is the score of your ability to reach the inbox consistently and earn a response.

2. How do I break through the clutter of the inbox?

The inbox isn’t just more crowded, it’s fragmenting, becoming more device-driven and crowded. Only the best subscriber experiences will break through. The number one mistake email marketers make is forgetting about subscribers’ interests. It’s not about sending out “just one more blast” this week in order to make this month’s number. Do that too often and you’ll soon find your file churning and possibly all of your messages blocked due to high spam complaints (i.e., clicks on the Report Spam button).

Focus on building long-term relationships with your subscribers. Change your metrics to measure engagement and subscriber value, not list size or how many people bother to unsubscribe. What drives the business is response, sharing and continued activity.

Defy internal pressure to abuse the channel by sending only what’s relevant. Work hard to customize content and contact strategies to meet the life stages and needs of each key segment. Ensure that your email program contains content that’s right for the channel. Don’t duplicate with Twitter, Facebook or LinkedIn. Make each channel sing with some unique and powerful value proposition. If you can’t think of one for each channel, then you probably don’t need to be in that channel after all. Tie your business goals to subscribers’ happiness and success. They’ll reward you with response, revenue and long-term subscription.

Thanks to all who participated in the virtual event and my chat session! For everyone, let me know what you think and please share any ideas or comments below.