Measuring Marketing Success
By: Tim Riesterer
|Tim Riesterer is president & CEO of The Brady Company, an integrated marketing communications firm specializing in programs that improve sales channel productivity for industrial and medical business-to-business clients worldwide.|
When it comes to measuring the impact of marketing campaigns, almost all evaluations are still based on some type of attitudinal analysis. This approach assumes that attitudes and opinions lead directly to desired behaviors.
There’s only one problem: No one has ever proven that “changing attitudes” actually contributes to a bottom line impact. According to Don E. Schultz, professor of Integrated Marketing Communications at Northwestern University, “after some 35 years of effort, we seem to have made little progress in connecting customer attitudes to marketplace behaviors.”
In fact, The Brady Company has seen examples where improvements in customer attitudes actually correspond to a simultaneous loss in market share. In these situations, prospective customers say, “yes, I think positively about your brand,” but they continue to buy the competitor’s products and services.
How can this be? In his book, Measuring Brand Communications ROI, Professor Schultz says, “measurement models based on attitudinal change appear to measure the process, but they don’t measure meaningful results or returns to the organization.”
In our jobs as marketers, one thing is clear. At the end of the day, it is results that top management is concerned with; not the process. They want to know what return they got back from their promotional investment.
If that’s what they’re looking for, shouldn’t that be what you give them. If so, how will you do it?
Migrating from attitudes to behavior measurement
To determine the impact of marketing campaigns, we need to identify a much stronger indication of interest (other than attitudes) on the part of customers. The answer: we need to measure behaviors.
Professor Schultz declares, “the time has come to measure what the customer or prospect actually does or did in the marketplace -- based on some sort of action or transaction -- versus measuring how they feel or felt leading up to that behavior.”
Therefore, short of actually closing a direct order from a customer, marketing campaigns need to be able to quantify visible, measurable actions by the customer or prospect. These actions must be a related to the intent to make a purchase.
Behavioral indicators of marketing success
Let’s look at some possible behavioral indicators of marketing communications program success:
Inquiries. Customer and prospect inquiries provide a good baseline for behavior measurement. Did your marketing campaign generate measurable responses? Were you able to influence a prospect or customer to take an action that created opportunities for dialog with your company?
Published industry reports indicate that within a year, between 25-45% of inquirers buy the type of product promoted via advertising, direct mail, telephone, trade shows, postcards, publicity coverage, directories, catalogs and other response-oriented communications.
However, despite the billions of dollars spent annually to promote and harvest inquiries from buyers, only about 10% of all business and industrial leads receive personal follow-up. According to Business Marketing magazine, the sad facts are:Obviously, there is plenty of room for success for those companies that do capture the full potential of inquiries. These are the savvy companies that consider inquiries the front end of a long-term relationship.
- Up to 90% of all leads are never followed up
- 80% of companies do not follow-up on trade show leads
- 59% of inquirers receive the wrong information
- 43% receive the information too late
- 18% don’t receive any information
Qualification. You can take the next step in creating measurable behaviors -- and maximizing your inquiries -- by instituting a proper “inquiry qualification” program. Use the phone to follow up all inquirers to learn about their needs, purchasing authority, budget and timing.
Prospects that give you this information have provided an even stronger measurement of purchase intention. And, you’ve established a deeper level of dialog between them and your company.
The Brady Company’s research has shown that on average, 30-40%+ of inquirers are not legitimate prospects. That is why your sales force, which does not have time for failed sales calls, has not made inquiry follow-up a priority. They’ve simply been burned by too many bad leads.
But, of the 60% who are legitimate inquirers, Brady has found that 34% of them have near-term purchase intentions. Of those, 25% are “hot” prospects who have purchase intentions within 0-6 months. The other 75% will buy within the next two years.
This can represent millions of dollars of incremental sales opportunities documented and attributed to your marketing communications programs. But, only if you qualify your inquiries.
Ongoing prospect dialog (commonly referred to as database marketing in the industry vernacular). Once someone has “raised his hand” and requested more information, you have permission to begin building sales-winning relationships with known prospects and customers.
The prospects that don’t qualify for immediate (“hot”) sales attention are perfect opportunities for database marketing. You should employ ongoing direct mail, e-mail, faxes and outbound telephone calls to keep in touch with these longer-term prospects. Every one of these contacts must include an offer and response mechanism inviting the recipient to continue and advance the dialog with your company.
This effort will put you a step ahead of your competition, because research shows that most companies do not use their inquiry lists as a direct marketing tool. They turn all the data over to field sales, and hope they make the effort to nurture the longer-term opportunities. Unfortunately, the immediate urgency created by sales quotas mitigates against that ever happening.
The goal of ongoing prospect contact (database marketing) is to keep your company and its solutions “top-of-mind” as these prospects go about their decision-making process. Also, you will be building a case for your company -- over the competition -- with each and every contact.
Customer behavior data capture. Your ability to create actions that lead to purchase intentions will be greatly enhanced if you know what best stimulates the desired action. There’s no better way to capture and understand customer behaviors than to ask them directly at point of sale and as part of customer satisfaction follow-up programs.
One Brady client initiates customer satisfaction calls at the time of delivery and then systematically follows up with calls throughout the first 3 years after purchase. The goal is two-fold: First, to identify, proactively, any issues the company (and distributor) can address to ensure a total and complete satisfactory experience.
Secondly, the company attempts to understand which issues most impacted the customers’ buying decision, if they’d be willing to purchase again, and which issues customers most want the company to address from a product or service standpoint.
Customer relationship marketing. Knowing this much about your customers provides a perfect foundation for marketing programs designed to create customer actions and behaviors that lead to re-purchase and referral (word-of-mouth) promotion.
Actual experience with your company provides additional meaning to the customer, who then modifies behavior, which can be turned into deeply felt loyalties. But, only if you purposefully reach out to customers with a communications program oriented toward improving their “brand experience.”
You can use a variety of tools to create an interactive relationship that bonds buyer and seller after the sale is made. These can include frequency programs, such as the airlines, that provide special inducements for loyalty. Affinity programs that link your company to broader customer needs and interests. “Communities of practice” where customers share applications and experiences with each other to complement and supplement company-sponsored applications support. Along with many others.
BUDGETS: You don’t have to spend more to get more
These behavior-driven programs don’t have to be budget busters. It’s more a change in mindset -- a refocusing of energies and moneys.
It seems that most companies who sell products or services to other businesses spend the majority of their marketing and communications budgets (90%+) on affecting market “attitudes” versus creating measurable behaviors related to the intent to purchase.
By changing your spending ratio, your company may be able to significantly increase the measurability of marketing communication’s impact on sales activity -- without spending a penny more than you do today. A good place to start is by reallocating your communications budgets to campaigns geared toward creating measurable actions.
For example, consider redistributing your budget this way:
- 50-60% for image, awareness, and lead generation
- 20-25% for handling, qualifying and nurturing
- 20-25% for keeping and growing existing customers
© Copyright 1999, Tim Riesterer, The Brady Company
|Other Articles by Tim Riesterer|
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