Marketing Productivity Blog

A good top-level article on how Marketers can build a strong relationship with Finance; check it out here.  Pretty simple really, but once again, you have to stretch a bit, and learn to speak the language (as you should be doing with IT).

If you’re struggling to find a reason to begin this relationship with Finance, I can provide you with a conversation starter.  I think you will find it opens the door to a wide ranging discussion with Financial people about how marketing should be measured and what the contribution of Marketing is to the Company.  The basic idea is to take the periodic accounting approach that Finance uses and twist it around to a customer accounting view.  Check it out!

Some interesting studies from The Wharton School on the negative correlation between “Competitor-oriented objectives” such as market share goals and ROI.  I can’t tell you how many times I have had this conversation with people, including those that base online advertising spend on some theory of “share”.  “We have to be in the top paid search position to accomplish our brand objectives” etc.  Even though being in the top position can result in negative ROMI.  “But that’s just the cost of being #1, advertising costs money”.  And that’s where I lose them, because even if you are a big fan of brand-oriented  / share-oriented marketing strategy, do you walk into those ad buys knowing you are going to “lose money” on them?  I don’t think so; there has to be a least some perceived positive benefit.

According to the article, lab experiments with MBA students indicated they tended to choose strategies that maximized competitor-oriented objectives rather than profitability.  Is there really a whole generation of folks out there that think marketing is basically a “sunk cost” so it doesn’t matter if it is profitable?  That’s insane.

So let me get this straight.  We’re starting to turn the corner on the marketing accountability issue; we now try to measure the profitability of marketing.  But when faced with an unprofitable campaign, there’s still a giant ”fear of failure“ safety hatch called “market share”?  Please tell me how you explain that to the CFO.  No wonder customer retention and LifeCycle Marketing ideas can’t get any traction if this is how people think.

If you’re more interested in profits than market share with PPC marketing, see these excellent guidelines.

It can’t be very easy to sell $5,000 electric generators on the web, but it sure is a lot easier if you’re a clever marketer.  You see, weather is local, so is radio, and guess which media source most people pay attention to when the power goes out?  Right.  Check out this very slick idea brought to us by Internet Retailer.  That’s one productive marketer.

Internet Retailer Magazine provides this article based on interviews with 2,472 online shoppers.  Shoppers ranked the “helpfulness” of a list of functions on retail websites; merchants ranked the “value” of these same functions. 

Areas where the consumer gave high rankings but merchants gave low rankings:

Product Comparison
Customer Reviews
Order History
Loyalty Program

Areas where the consumer gave low rankings but merchants gave high rankings:

What’s New
Upsell / Cross-sell
Top Sellers
Gift Suggestions

The author of the article does a good job of laying out what this all means about customer behavior and I concur so I won’t get into it.  It’s pretty clearly an example of Marketing Non-Productivity though.  How could this happen?

Well, probably because there were no marketing people involved with the design of the basic shopping cart, or if there were, they didn’t know anything about customer behavior.  The myth of cross-sell and upsell continues today.  You don’t cross-sell or upsell anything to somebody they didn’t already want.  Trust me.  So to waste all this time on cross-selling and upselling instead of producing better marketing, design, and systems is ridiculous.  Offering someone a related product that they would have bought anyway if they had only been able to find it is highly unproductive.

However, the above situation does sound like a very good setup for my friends at Bazaarvoice and Kobie Marketing…

Chief Marketer newsletter provides us with a list of 10 non-obvious benefits of loyalty programs.  Funny thing, these 10 could be applied to almost any customer-data-based marketing programs.  Loyalty programs are among the most difficult of these programs to execute properly, but they can drive a huge return on the investment when designed and executed correctly.  Unfortunately, Loyalty Programs have a bad “ROI rap” because many are designed poorly and have to be killed.

I beg to differ on this statement in # 10 though: “There is always selection bias in any voluntary program, and loyalty programs are no different.”  That’s a design issue.  The recruitment design doesn’t have to be “voluntary”.  You can usually find a way to selectively and specifically invite different types of customers, at least in the beginning, so that you can look at profitability versus a control group.  That is what was done in the cellular case study linked to above.

Not sure Crayons are the best compare, but Calculators work for me.  In this article from CRM Magazine we hear about how the accountability movement is affecting marketers, and about the need for closer alignment with other silo functions to increase Productivity.  That’s pretty much what my blog is about; what do you think?

The “alignment with IT” thing is the really sticky part; it’s interesting that more IT people seem willing to learn marketing concepts than the other way around (see web analytics).  But I have to tell ya, every place I have worked it has paid off big time on the marketing side to get with the engineering or IT folks and try to understand the basics of what they do and how things work in the company.

When I was in cable TV, I went out with the installers and engineers on a regular basis just to figure out what they cared about and what they did.  This interaction led to a string of marketing programs based around engineering issues that not only improved productivity on the technical side of the business but also generated good returns on the marketing side.

The classic was running contests on the system that only cable subs could see, targeting areas where we suspected there was a high theft of service level.  People hooked into the system illegally would call up to claim their prize and we would politely ask them if they would like to subscribe… “Mr. Smith, the contest is for cable customers only and we have no record of service with you.  If you’d like, I can sign you up and then you will be eligible for the prize…”

Yes, engineering, marketing, and customer service had to work together to pull it off.  Is that really such a weird idea?

“Doing something” with the data seems to be the place everybody gets stuck.  They can run reports, create segments and so forth, but then get bogged down with what to do next.  This article talks about how the behavior you see in the database can be converted to creative execution for both B2B and B2C.  Five stars for talking about the difficult interface between marketing and technology people and providing concrete suggestions on how to deal with it.

Article Link: CRM Magazine, Dec 2006

Article speaks to all the CRM activity focused on “improving the customer experience” in 2006.  This is a fine (if not obvious) goal but I hope people are going to drop the silos and get cross-functional attitudes and analytics.  The gnarliest customer experience problems are often cross-functional in nature because they don’t have an identifiable champion, so are allowed to fester and grow.  This means solving these problems often generates the highest ROI of any customer-centric project being considered.