Marketing Productivity Blog

The following Q & A is from the June 2009 Drilling Down Newsletter.

Got a question about Customer Measurement, Management, Valuation, Retention, Loyalty, Defection?  Just ask your question.  Also, Feel free to leave a comment.  Want to see the answers to previous questions?  Here’s the blog archive; the pre-blog newsletter archives are here.

Q: I received this article (Norms of Reciprocity) via a friend’s Twitter account.  Very interesting.

A:  Glad you enjoyed it!

Q:  It has made open up my ACT! database, and my Outlook databases and add the metric of Growing / Strong / Weakening / Failed to my normal Sales and Business progress metrics.  If I group those categories and correlate to traditional metrics, it’s impressive how they reflect each other.

A:  Yes, most people are surprised.  It’s a very, very simple idea that seems to work across just about any human activity including crime, attendance, and so forth.  

The more Recently someone has done something, the more likely they are to do it again.  Conversely, the longer since an activity last took place, the less likely the person will do it again.  Often called Recency in Psychology and studied quite a bit.

Q:  Now I have to think about how I really use and apply this. : )

A:  Well, if I can guess you are in Sales from your title, typically one of the best applications is in what Strategic Marketing folks might call “allocation of resources”, which probably translates into “lead nurturing” for you.

Most experienced people in Sales have a sort of “sixth sense” when it comes to thinking about the likelihood of a close happening.  They worry about certain prospects more than others, and a sort of “ranking” or “scoring” happens in their mind.  One of the triggers that frequently comes up in this is “how long” it has been since there was any contact activity with the prospect, and the feeling the longer it has been without sales activity, the less likely the sale is to close.  Sales Managers will often allocate resources based on these kinds of “feelings” they or salespeople have.

The problem with all this “gut feel” is, newer sales people don’t have it, and so probably are not as productive as they could be.  The other is since a lot of this is not tracked in any way, there aren’t any firm “guideposts” and it may be that sales are lost that otherwise could have been made due to a lack of urgency or misdirection.

So, given limited resources, a sales force would generally like to focus on the leads most likely to close, and not work on the less likely leads until the most likely leads have been addressed.  This is the idea of scoring, let’s rank all of our prospects by likelihood to close.

Now, as far as what you might do in ACT! or similar (and knowing nothing about your business), here is what I would do.  Just start informally comparing prospects that close and those that don’t close in terms of these timing issues, “how long since contact” or “how long between contacts” for each case.

Typically you will start to see patterns of some kind, for example:

1. “Prospects who have not made it to 2nd sales appointment within 30 days of 1st contact are less likely to close”

2. “Prospects who take longer than 25 days to respond to proposal are less likely to close; prospects who take less than 10 days to respond to proposal are very likely to close”

and so forth.  Look at important events in the sales process and note the “time since” or “time between” and look for such patterns.

Now, as I said, many salespeople, especially experienced ones, have some sense of these ideas, but they have never been quantified. The advantage to quantifying them like this is you can move to a “trigged contact system” based on them, which I think you can do in ACT! if you have the data.  This conserves salesperson resources and helps them always be focused on where they are most likely to close the business.

So, for example, salespeople (sales managers, if more appropriate) receive a communication each day about any prospects who are coming close to any of these triggers above.

In scenario 1 above, a counter starts on 1st contact and if another sales call has not been scheduled within 20 days of 1st sales call, a reminder goes out saying “you have 10 days to get a 2nd appointment or you may lose this sale”.  In scenario 2 above, sending the proposal triggers the counter, and a sales contact is suggested at 7 days later and 15 days after that.

The optimal timing of these contacts is something discovered over time, and of course depends on the business. But having these triggered messages available to guide salespeople towards which contacts they should be most focused on that day or week is a lot better than nothing.

So instead of a salesperson thinking this:

“Gee, it’s ‘been awhile’ since I talked to prospect George. Maybe I should call him”.

you get this thought:

“I sent the proposal to prospect George 7 days ago, and I need to close him in 3 days, or he becomes less likely to close at all.”

The difference in those two thoughts and the action taken can be a lot of sales - especially with newer sales people, who don’t have enough experience to understand the “rhythm of the sale” in this specific business yet.  If you’d like a more detailed example, there’s one here: B2B Software - Latency Tripwire.

Spreadsheets are usually a great tool for this kind of discovery work.

Hope that helps!

Jim

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If you are a consultant, agency, or software developer with clients needing action-oriented customer intelligence or High ROI Customer Marketing program designs, click here
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Social Marketing Doesn’t Rely on Social Media

Do you believe human beings share certain fundamental traits that define “being human”?

If so, do you believe that human beings tend to behave in certain ways under certain circumstances?

If so, do you then believe since human behavior has these tendencies, it can often be predicted?

If so, then do you think perhaps the study of Psychology and Sociology might provide you some clues to creating successful businesses, campaigns, products, and services?  While your friends and competitors are all iterating their way into oblivion?

On the web, time and time again, we see the same themes repeating.  Yet with each introduction of a new technology, these themes tend to be treated like a new discovery, even though the theme has been well established in the past.

Norms of Reciprocity is a constant human theme.  You may know the expression of these norms as ”Sharing”.  Web old timers will probably recognize this idea as “Give, then Take” from the I-Sales discussion list as early as 1995.  In various forms, this theme goes back to the beginning of human history, all the way back to the handshake and other greeting gestures.  This same theme is embedded in countless Religions all over the world: “Do onto others as you would wish them do onto you”.  At least a couple centuries old, this idea.

Norms of Reciprocity simply means this: When you do something nice for a human being, help them in some way, this human tends to feel Gratitude towards ”the doer” and tends to do something nice back.  Gratitude drives the desire to Reciprocate, because it’s just what humans do, it’s normal, a “norm”.

Norms of Reciprocity.

Keep reading this post »

Does this issue affect the Web Analytics Maturity Model?

A conference call with a Potential Client last week jogged my memory on a couple of events that happened during the flurry of Web Analytics conferences this Spring.  Here’s a portion of the call…

PC: “We’ve tried proving the profitability of our Marketing efforts and can’t seem to get the numbers working correctly.  So Jim, what we’d like you to do is take all this data we have, and justify the Marketing decisions we’ve made by proving out the ROI.”

Jim: “I’m sorry, did you say justify?  To me, justify means “find a way to prove it works”.  Is that what you are asking me to do?  Wouldn’t it be more beneficial to analyze the results, and then optimize your Marketing based on these results?”

PC: “Jim, around here we’re pretty clear our Marketing works, and Management knows this.  But Finance is asking for some backup, some numbers to justify the spend, not to analyze it.  We don’t need analysis, we need your ‘expert credibility’ to help us out with this.”

Jim: “I see,” thinking this is not a job I’m going to enjoy.  It’s the old ‘buy an outside expert’ routine, which I detest.

PC: “Jim, the team is united behind this mission, are you on board?”

Jim: “Well, perhaps I could be on board, as long as what you want is an analysis, which may also justify the decisions you have made.  But it might not, so I just want to be clear on what…”

PC: “You  know what Jim?  I don’t feel we’re going to have a fit here, I’m getting you’re not a team player.  Thanks for your time”.  CLICK

Sigh.  I’m actually grateful they hung up, I really dislike explaining to people why I won’t work with them.

Keep reading this post »

The following is from the May 2009 Drilling Down Newsletter.  Got a question about Customer Measurement, Management, Valuation, Retention, Loyalty, Defection?  Just ask your question.  Also, feel free to leave a comment. 

Want to see the answers to previous questions?  Here’s the blog archive; the pre-blog newsletter archives are here.

Q:  First of all thank you for your help.  I have some questions I would be pleased if you answer them for me.

A:  No problem!

Q:  1. RFM analysis - is it possible to use some other ranking technique rather than quintiles? Using quintiles for bigger databases will cause many tied values, isn’t it a problem?

A:  Sure, you can use it any way it works best for you.  There is no “magic” behind quintiles, you can use deciles or whatever works best. It’s the idea of ranking by Recency, Frequency, and Value that is the key concept in the model.

I’ve seen dozens and perhaps hundreds of variations on the core RFM model, depending on how you classify a “variation”.  One change that’s common is changing the scaling, as you mention above, to accommodate the size of the database.  Smaller databases use quartiles or even tertiles.  Larger databases, choose the ordered distribution that meets the need.

Keep reading this post »

I was in Vancouver for a presentation to CAUCE [kay-yoose, thanks Raquel] and was able to grab a quick dinner with fellow WAA BaseCamp stakeholders Andrea Hadley, Raquel Collins, and Braden Hoeppner.  We’re rolling out a new 2-day format for BaseCamp and got to talking about web analytics education in general. 

We started talking audience segmentation and content at the eMetrics Summit, and specifically the “shootout” format from the old days.  You know, 10 vendors on the stage at the same time taking questions from the audience.  Those sessions were both educational and hilarious at the same time, as the vendors side-swiped each other on topics like accuracy, how visitors are counted, cookie structures, and so forth.

But that was back when the technology was in flux, and now that issue has settled down a lot.  Braden brought up the concept of returning the “shootout format”, but more on the business side.  You know, get some practitioners, vendors, and consultants up on stage and have them thrash out stuff like:

1.  Attribution - does it really make sense to even bother with attribution at the impression / click level when there is often not a strong correlation to profit?  I mean, just because someone sees or clicks on an ad does not mean the ad had a positive effect; in fact, it may have had a negative effect.  Why not go straight to action or profit attribution, instead of using creative accounting?

Keep reading this post »

Discount Proneness is what happens when you “teach” customers to expect discounts.  Over time, they won’t buy unless you send them a discount.  They wait for it, expect it.  Unraveling this behavior is a very painful process you do not want to experience.

The latest shiny object where Coupon Proneness comes into play is the “shopping cart recapture” program.  Mark my words, if it is not happening already, these programs are teaching customers to “Add to Cart” and then abandon it, waiting for an e-mail with a discount to “recapture” this sale - a sale that for many receiving the e-mail, would have taken place anyway. 

The best way to measure this effect is to use a Control Group.

When I hear people talking about programs like this (for example, in the Yahoo analytics group) what I hear is “the faster you send the e-mail, the higher the response rate you get”.

That, my friends, is pretty much a guarantee that a majority of the people receiving that e-mail would have bought anyway.  Hold out a random sample of the population and prove it to yourself.  There is a best, most profitable time to send such an e-mail, and that time will be revealed to you using a controlled test.  The correct timing is almost certainly not within 24 or even 48 hours.

That is, if you care about Profits over Sales, and trust me, somebody at your company does.  They just have not told you yet!

When you give away margin you do not have to give away on a sale, that is a cost.  Unless you are including that cost in your campaign analysis, you are not reflecting the true financial nature of the campaigns you are doing.  If you are an analyst, that’s a problem.

If you are using cart recapture campaigns, please do a controlled test sooner rather than later.  Because once your customers have Discount Proneness, it will be very painful to fix.

Keep reading this post »

The following is from the April 2009 Drilling Down Newsletter.  Got a question about Customer Measurement, Management, Valuation, Retention, Loyalty, Defection?  Just ask your question.  Also, feel free to leave a comment. 

Want to see the answers to previous questions?  Here’s the blog archive; the pre-blog newsletter archives are here.

Q:  I’m a social media consultant, facing the interesting challenges of measuring success, and wondered, what are your thoughts on social media measurement and life time value? The two seem to go together, but if anyone has thought about it, you would have.  Would love to know your thoughts.

A:  Just to be clear, the following is specifically about social for use as a Marketing platform, not as a utility or a way to keep in touch with people.  Interacting with other people can create a lot of value - emotional value for the participants.  There are obviously lots of great uses for social platforms and I’m sure there is more to come in that area.  The question is: does any of this make sense as “media”?

Keep reading this post »

As I said in the Heavy Lifting post, I think the Web Analytics community is becoming increasingly insular and should be paying more attention to what is going on outside the echo chamber in Marketing Measurement.  I also think the next major leaps forward in #wa are likely to come from examining best practices in other areas of Marketing Measurement and figuring out how they apply to the web.

For example, did you even know there is a peer-reviewed journal called Marketing Science, which calls itself “the premier journal focusing on empirical and theoretical quantitative research in marketing”?

Whoa, say what?

This journal is published by the Institute for Operations Research and the Management Sciences, and articles are the work of premiere researchers in visitor and customer behavior from the best known institutions around the world.  In case you didn’t know, “peer-reviewed” means a bunch of these researchers (not including the authors, of course) have to agree that what you say in your article is logical based on the data, and that any testing you carried out adhered to the most stringent protocols - sampling, stats, test construction, all of it.

And, most mind-blowing of all, they show you the actual math right in the article - the data, variables, formulas, graphs - that lead to the conclusions they formulate in the studies.  You know, like this:

Keep reading this post »

Open your mind for a minute.

What if what the media / agency complex has been telling you all along about online advertising is not really true.  What if Advertising  - from the end user (visitor) perspective - performs a fundamentally different job online than it does offline?  What if the entire game is different than you think it is?  Might that explain why it’s so difficult to get any agreement on the value of online advertising?

Please bear with me; see if this makes any sense to you.

Offline, it’s important that you remember an ad.  That’s because you are rarely in a position to take advantage of or act on the ad when you are exposed to it - unless you are sitting in front of a computer.  Awareness, Recall, all those nice measurements the offliners do are important for offline Advertising, because the job of offline Advertising is get you to remember it so you can Act on the Advertising when you are in a position to do so.

Online, you can immediately investigate the products or services advertised, get 3rd party opinions, and so forth.  You can convert Awareness to Intent and Desire in a matter of moments, if not take Action as well -  if you are interested in what is being Advertised.

The fundamental answer to every question you have about online advertising might be really simple, if you think this way:

Online Ads are Navigation

They are not Advertising, in the traditional sense of offline Advertising.

Content sources serve the role of traditional Advertising online.

Not the ad itself.

Online, the Web Site is the Ad.

Keep reading this post »

Marketing Accountability.

Brand is what you do, not what you say. 

Marketing Alignment.

Here are 3 free webinars you might want to take advantage of.  You might not agree with these opinions, but hey, it’s a good idea to get out of the echo chamber once and awhile, don’t you think?  Try these online sessions for a little brain stretching:

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Moving Marketing From “The Money Spenders” to The Money MAKERS
April 15, 2009  noon ET    Jonathan Salem Baskin, Jim Sterne, Jim Novo

With 10% of marketing executives being perceived as strategic and influential by the C-suite there’s clearly a crisis of confidence.  I’ve mentioned Jonathan’s blog and book before and here’s a chance to hear a bit of the inside story.  You’ll learn how to exceed expectations of both C-suite executives and customers, neutralize political feuds by organizing cross-departmentally, and how to stop thinking like a reporter and start acting like an advisor

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Everything They’ve Told You About Marketing Is Wrong
April 21, 2009   1pm ET  Ron Shevlin

Are you sick and tired of reading the same old blah, blah, blah, from the so- called marketing experts who just tell you stuff you already know? Then you need to attend this session as the grumpy old man cuts through the morass of bad advice and introduces you to the must-dos in the new world of marketing.  I know Ron personally (as in offline) and even if you disagree, you will be entertained.

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What Online Marketers Can Teach Offline Colleagues (and vice versa)
May 19, 2009  noon ET     Kevin Hillstrom, Akin Arikan, and Jim Novo

A WAA event, open to both members and non-members.  Web analysts are not the first to grapple with multiple channels.  Traditional marketers have always had to illuminate customer behavior across stores, call center, direct mail, etc.  So, rather than reinventing the wheel in each camp, what proven methods can you teach each other?  Three different but aligned approaches on solving the multichannel puzzle, should be something for everyone here.

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Take your brain out for some exercise, will ya?