The Symphony Changed Keys

Most B-to-B marketers today are conductors of their multichannel orchestras. But conducting requires more than a baton, as it’s become far more complex with many new “instruments” at our disposal. Most of the money in our marketing budget used to be spent in the mail or on the phone, but in the past five years, online investments and marketing activities have skyrocketed.

Consider the range of activities that we, as B-to-B marketers, may be involved in.

Offline
• direct mail;
• telesales;
• account-based relationship sales;
• public relations;
• sponsorships;
• dealer networks;
• retail stores; and
• DRTV.

Online
• organic search/search engine optimization, landing pages;
• paid search/pay per click;
• e-mail;
• webinars;
• podcasts;
• video;
• blogging;
• “net gnat” second brands; and
• content management.

Every business is different, and your business may be involved in any number of these activities or even some others not mentioned.

In conducting this orchestra, ask the following questions:
• How do we evaluate and balance these activities and investments?
• How do we keep the focus on the comparative return on investment (ROI) between activities and remain able to adapt to changing market conditions along with being able to rebalance our spending?

Given the myriad of activities, these questions can be daunting. In order to answer them, you must understand exactly what you want to accomplish.

1. For each planned marketing activity, be clear on your objectives. What are the key result areas you’re looking for? Acquisition? Conversion? Retention? Buying site penetration? Cost reduction? A combination of these things?

2. Be clear about your performance measurements in each area, and distill your evaluation to performance measurements that allow comparison between areas.

In one program, you may be looking for sales growth. In another, the goal may be customer acquisition or reactivation. Be clear of your goals, and be able to move your assessment of these goals to a common performance measure, such as ROI, for each program.

You need a summary that reflects what your ROI was on the last $10,000, $50,000 or $100,000 invested, and what it’ll be on the next $10,000, $50,000 or $100,000 invested. Use this kind of common yardstick to help allocate your investments between your marketing activities.

Starting Points
Here are some basic starting points in doing your evaluation.

1. Take the business site perspective, and manage your multiple names per site under a site umbrella. At the site level, look at product sales by category, marketing actions/investments, and acquisition sources and costs.

2. Know your cost to acquire a new business site or individual buyer by method of acquisition — namely catalog, direct mail, outbound telesales, organic search, pay per click or others. Be clear about the site’s near-term value (one year to two years) or payback period by acquisition method or investment. Ideally, all your acquisition investments will be balanced to achieve the same dollars invested per dollar near-term value (NTV).

3. The evaluation of any marketing investment should revolve around the number of customers you gain or reactivate and at what projected NTV. They should also be based on the sales and profits generated.

Most likely you’ll find some common measurements similar to all marketing campaigns or investments. These include the following:
• orders;
• net sales;
• credits;
• average order value;
• median order value;
• lines per order;
• units per order;
• gross product margin;
• fixed and variable costs;
• marketing contribution, including your margin after all marketing and product costs;
• order frequency;
• retention; and
• near-term value, including one-year or two-year site or name value.

In your mailing activities, you might have other specific performance measurements, such as dollars per catalog mailed, dollars per page, performance vs. forecast, merge/purge results, matchback results and in-office delivery performance, among others.

Measure by Group or Rep
For your inbound phone activities, you might measure the following by group or by individual sales representative: sales, calls, orders, total talk time, total paid time, payroll, dollars per sales, dollars per payroll, available time and paid time, data collection, upsell, service level, retention, units per order, lines per order, talk time, average talk time per call, customer service, etc.

In your outbound selling activity, you might track the following performance measurements: leads worked, calls, connects, presentations, talk time, sales, rejects, closes, average order value, units per order, lines per order, penetration of call file, returns, payroll/overhead to sales, dollars per sales/rep, and representative performance rank and range.

On your Web marketing activities, you might measure keyword performance/search engine optimization, site ranking, unique visitors, time spent per visit, pages viewed, new and repeat visitors, abandoned carts, clicks to purchase, referrals, affiliates, and sales by search engine.

For each area of marketing activity there will be a variety of performance measurements that can be “boiled down” to a common evaluative measure or two that can be used to compare across all activities.

Assign Values
For each marketing activity you’ll produce a summary of what you invested vs. its return. Where you don’t have hard numbers (i.e., qualitative call measurements), assign a value or allocation so you can arrive at a hard number that will facilitate cross-channel investment comparisons.

Finally, once you have everything measured and distilled to common performance measurements, ask the following questions to help you find areas of opportunity in the balancing process.

1. What's the marginal return in each activity? What's working? What's growing? What would an increase or decrease in investment look like?

2. Are the results of prospecting at buying sites and nonbuying sites separated from each other?

3. How does the risk, payback and payout of offline and online activities compare?

4. Should you segment your prospects and customers based on what marketing activities they respond to? And rebalance your activity and investment in each segment to fit the results accordingly?

5. What new marketing tactics are available to you in the online world, and what might the performance of those be?

6. What opportunities do you have to test the integration of online and offline activities?

Terence Jukes is president of B2B Direct Marketing Intelligence Inc., a strategic consultancy based in Fort Lauderdale, Fla., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at www.b2bdmi.com or (954) 566-4451.