Know What Works Blog

At the beginning of RedClick’s relationship with a client, we spend time at the client’s office learning about their existing marketing and operations.  We look at information from customer data that will tell us how well marketing efforts are working.  The most widely used tool to track marketing effectiveness is the Lead Source.  The sad part is that most companies don’t use this tool very effectively.  And, if they do collect the lead sources, no one follows through to review the lead source lists and make necessary changes. 

When I’m the one making marketing decisions with someone else’s money, I need something to back me up.  And, I want to be prepared when a media rep calls to ask me about renewing our advertising. 

We see two types of lead source collection processes.  The first is when the computer has the possible sources and the customer service rep needs to only pick one of the sources in the list.  The second is that the customer service rep writes down whatever the customer answers when asked about the lead source.  Each type depends what the software is set up to do. 

We also see that many companies only write down certain lead sources, and they only ask certain people.  For example, they may only write down if the person mentions major media, yellow pages, Internet, Television, radio, etc…  Or, they may only ask their new customers. 

Another problem that we see is the question that they ask.  “How did you hear about us?” is the most common, and probably the most vague.  The customer may think, hmmm, how did I first hear about this company?  If it was a long time ago, it may be difficult for the customer to remember.   And, don’t you want to find out what brought the call now?  How they originally heard about you may be quite different than this time when they need you.  Better questions would be:

How did you get our number today?

What brought you into the store today?

What made you decide to visit our site today?

How did you get to this page of our site today?

Notice the common word?  TODAY.

And, that brings me to another point.  Why do most companies only ask their new customers about the lead source?  We often find that they use Repeat Customer as the Lead Source.  “Repeat customer” is not a lead source!  Many companies believe that a customer is going to automatically use them again, and they don’t have initiatives in place to bring them back.  So the first step is to create initiatives to continually bring customers back in, then the next step is to track these initiatives that may keep them coming back. 

Let’s say you are a residential plumbing company and you decide to develop a brochure about new services your company offers.  You then mail it to all of your past customers .  Then they see the number, call you, and you never ask them how they got your number.   How would you know that mailing that brochure had any impact?  

Another reason to ask every customer is that the question will become a habit for the people who answer the phone.  And, customers will come to expect it. 

Today is a good day to start collecting the right lead source information.  And, tomorrow is a good day to start looking at it.  You’ll be amazed at how much information you receive that you can use to make media decisions. 

Analyzing the lead source information properly will be the subject of our next article.

Have you ever thought about who your Perfect Customer is?  Have you actually written out the characteristics of your perfect customer?  I was talking to an employee of The Limited, which is a women’s fashion retail store that has many locations, usually in malls.  The employee that I was talking to worked in the Lancaster, PA  store.  She was telling me that The Limited talks about their ideal customer, and she went on to describe their ideal shopper for their stores.  What I found interesting was that one of the characteristics is that this ideal customer is from New York City.  If you’ve ever been to Lancaster, PA, you will quickly realize that it is nothing like New York City, so why wouldn’t the perfect customer for the Lancaster store be from hmmm, tough one here, uhhhh Lancaster????

So while having a Perfect Customer description clarifies, and also attracts, your perfect customer, make sure that it makes sense for each location.  And, make absolute certain that everyone on your team knows what The Perfect Customer looks like, acts like, spends like and is like. 

And, share the Perfect Customer description with your network.  Then, they will also know who to refer to you.

New Year’s Day I sat down to work on my budgets.  I did our household budget, and then I set to work on RedClick Marketing’s budget.  For some reason, the dawning of the New Year inspires me to become organized.  Apparently, others get inspired to be organized as well considering retailers are often offering a zillion organizational products for sale this time of year. 

Back to the budget.  I am amazed when I find out that many businesses run without a budget.  How do they know what’s coming up?  How can they plan for expenses?  And, I guess, most importantly, how do they price their services or products?  If you don’t understand your costs, then you don’t understand your price.  If you are undercharging, you are hurting your company.  If you are overcharging, you could be turning away customers. 

There is also a psychological aspect to developing a budget.  You can plan for any scenario on paper, and therefore you give yourself the positive vibe of success. 

I’ve used two methods to developing a company budget. 

The first:  I print out my Profit and Loss statements for each month of the previous fiscal year, then I estimate what these costs will be during the upcoming year.  I also look at the realistic expectation of revenue for each of those months.  Then, the spreadsheet becomes my sandbox.  I can see what my profit would be if my revenue was a lot higher for each of the months, or if I could lower an expense or two.  Then, I’ll play around with adding more people, and what we could accomplish together.  And, then, maybe I’ll double our client base.  The fun of working with a budget is when you have it in spreadsheet software, you can play out the “what-if” scenarios.  And, yes, it is fun!!!

The second:  When, I’m feeling extremely left brained, I may look at my current month’s expenses, and compare them to my budget.  I’ll make a list of what I need to pay this month, next month, and the following month.  I’ll look at what I expect to collect in revenue, and factor in how I plan to pay for some unexpected items, that weren’t in the original budget. 

If you have someone who handles your bookkeeping, you may want to make the second method a task for that person. 

As far as marketing budgets, I create these completely differently.  Marketing budgets are created after the plan.  I’ll factor in the methods and the media costs to achieve the objectives as set forth in the plan.  Then, I will list all of the existing signed contracts by month in the budget.  By the way, I don’t agree with getting a yearly number and dividing by 12.  I will look at the marketing mechanisms that have worked in the past, and add those into the budget.  Then, I will collect media kits from any new endeavor we plan to embark on.  Then, I will add any miscellaneous items that should legitimately be added into the marketing budget. 

The key after a marketing plan is developed is to ensure that the expected amount of revenue is brought in each month.  An amount for off-the-shelf marketing should be placed into expected slow months.  If you don’t need to use it, then great, but at least you planned for it.

Again, I welcome your comments.

When you decide to renew your advertising, what do you use to make the decision?  Numbers? Gut feeling? Recommendations from others? Cost?  Peer Pressure?  Comfort in that you’ve always done it?  Any thought at all? 

Many marketing and advertising decision makers don’t use any thought at all.  They rely on the information that the sales rep gives them.  And, obviously the sales rep isn’t going to say something negative or against the possible sale. 

Using numbers to verify success from an advertising purchase is the logical way to decide if you should renew.  However, sometimes the numbers don’t tell the truth.  If humans are responsible for entering in the data, and it isn’t cross checked somehow, the numbers won’t be accurate.  That’s when you have to think. 

Here’s the story:

A few years ago, a new client of RedClick’s gave us a report that listed all of the source codes of thousands of calls.  One of the largest codes pulling the most calls was Previous Customer.  Do you see what’s wrong with this picture?  Right!  Previous Customer is not a source code.  It was what the Customer Representative used because the caller was a Previous Customer and it was easier than asking “Where did you get our number today?”  We had it changed in the tracking system, and then we had to change it in the minds of the client’s co-workers.  Now that was the tough part.  It took months of watching and coaching.  Now they understand why it is so important.   

Okay, now suppose it is evaluation time, and I need to renew $100,000 worth of advertising?  I check the reports and see that the ads didn’t get that many calls.  If I didn’t think about it, I would have dropped the advertising.  But when I see that too many calls are going to incorrect codes, I get suspicious.  I need to make the assumption that the call count and revenue totals are understated.  But how do I make the decision to renew the advertising?  All of my tracking efforts are wasted. 

Not all of them.  Figure out the total revenue that was attributed to the advertising, and divide the cost into that.  (Cost/Revenue)  This will give you your cost percentage.  If your goal is 15%, and the percentage is 15% or lower, then you should renew the ad.  If not, negotiate to reduce the renewal cost so that if everything continues as it is, your cost percentage will go down.  If this isn’t possible, look at other data such as where people are coming from, ask the people who talk to the customers, spot check by randomly calling a few customers and asking them.  You can call it a Quality Care Check and ask some follow up questions about their experience while you’re asking about how they got your number.  A mathematical method would be to take the percentage of calls that the renewing ad has.  For example, let’s say that it is 12% of the total.  You could take 12% of the incorrect ad codes and attribute them to calls for the renewing ad. 

Please post your ideas for gaining accurate tracking data.

Yesterday, my staff and I held a meeting with a potential client at our RedClick Marketing office.  The client was looking for someone to help him with a deadline that was coming up in a few weeks, and he was in a pinch.  In the course of the conversation, he mentioned that he was up for a new look as well.  So, we went through our normal discovery questions, one of which was - “Tell me about your location’s interior.”  This clearly surprised the client, but he answered it in a guarded sort of way, describing a casual atmosphere in which there was a play area for children.  I found this rather unusual for an accountant’s office, so I asked him to elaborate.  I was “mindmapping” his brand. 

There are often many snippets you can get from a conversation that is a reflection of how a brand should be developed.  The fact that this accountant caters to young families and treats their children with respect and care is a huge element for differentiating his brand from someone else’s.  If I would have asked “So, tell me what sets you apart from your competition?”, he would have responded by telling me about a feature of his services or his people. 

Your comments are requested and appreciated.

After leaving a brief stint at a regionally recognized ad agency, I realized that you can’t understand what happens within the client’s company while simply designing and placing ads, no matter how many meetings and conversations you have.  There is too much to be learned by being a part of the company’s culture, even if only for a short time.  For the past eight years, I have worked within the offices of a client company at least one day a week and here are the top ten things that I have learned:

10.  Very few co-workers understand marketing and its purpose.  They also don’t always realize that they are part of the marketing endeavors of the company. 

9.  Very few co-workers understand the costs associated with marketing, and why it is important to collect information to determine if it works or doesn’t.

8.  The customer touch points are all marketing vehicles

7.  The company culture needs to be aligned with the brand or brands to facilitate marketing communication.

6.  All operational functions can be helped with general marketing principles.  An example,  individual meetings can be branded, communicated, and the effectiveness evaluated. 

5.  Marketing endeavors need to be communicated to all front line personnel.

4. All managers need to understand the customer, not just the marketing department. 

3.  All managers need to understand marketing principles.  The company needs to be support the brand internally as well as externally.

2.  Everyone’s ideas are important when it comes to marketing, and the not-so-reasonable contributors need to be let down gently so that they don’t stop coming up with ideas.

1.  The number one thing that I’ve learned, is that the owner’s vision, personality, and character can aid the marketing momentum just as much as it can hinder it.

Yesterday, I was doing some Christmas Shopping for my daughter at Forever 21 and after I had selected the items that I wanted to purchase I walked to the end of the line.  I waited at least 20 minutes to check out, and I thought to myself ‘there is no way that I am doing this again’.   If I would have seen the line prior to walking in the store, I would have gone somewhere else. 

There are too many choices for consumers to spend money, and it is amazing that when it comes to collecting it, many companies don’t know when they are destroying the goodwill that the shopping experience may have created. 

A month or so ago, my husband, daughter, and I were shopping at Apple, and again, it took forever to pay because we were getting a computer for our company, and businesses get a discount.  When we mentioned this, the staff seemed caught off guard.  We had to fill out a form, managers had to approve it.  We were very close to walking out without a computer because it took about an hour to check out. Interestingly enough, we were very excited that the Apple store had opened locally, so our enthusiasm definitely dimmed when we realized that it wasn’t going to be easy. 

Many companies don’t give much thought to the experience of paying for merchandise.  They assume that if the customer got so far as the payment line, that they are going to complete the transaction.  And, most likely they will.  But, they may think twice about returning any time soon.  They may mention to a friend:  “I really liked that store, but you have to wait forever to check out”. 

Why make it difficult for someone to give you their money?

On the flip side, a long payment line gives the impression to potential customers, that the store is popular, and that they may be missing something.  So, if there is a long payment line, make it fun for the people who are waiting or create ways to make it go as fast as possible.  Learn the busy times, and increase staff during those times.  The more customers who you are able to accomodate will pay for the extra staff personnel. 

Barnes and Nobel is very good about handling long lines.  When the check out line gets to a certain point, they often call for assistance.  This makes me feel that they have everything under control.

How do customers like your process for accepting payment?  You’ll have to ask.  They probably won’t tell you.

I welcome your comments.

RED equals power.  When used together, the objectives: Reputation, Excite, and Drive equal major marketing power.  Think about every marketing effort that you spend time or money on.  These could range from creating business cards, to multi-million dollar television campaigns.  They could be writing thank you notes, or making a follow up call.  Let’s explore these four marketing efforts that I just mentioned to explain how powerful RED can be. 

Reputation - the objective to build and enhance the sender’s reputation

Excite - Provide an incentive, either direct or implied for a receiver to act.

Drive - Provide the means for the recipient to contact the sender, or to take action.

Assume that our objective is have more people contact us. 

Business Cards are primarily used to provide contact information, which enables the recipient to call or email the name on the card.  So this means that the business card is driving the result.  If the card is an extension of the company’s branding, it will communicate the company’s reputation.  Most business cards don’t excite the recipient, unless there is a compelling reason for the recipient to act quicker with a phone call or contact. 

A television campaign can provide all three, but some don’t always provide the Drive.  Meaning, they don’t always provide the means for the viewer to act.  The design and the content work together to communicate the reputation of the advertiser whether it is intentional or not.  Most television campaigns want to Excite their audience about their brand.  

Writing thank you notes is a great way to build a reputation that is thoughtful, caring, and appreciative.  Thank you notes aren’t usually meant to excite a prospect although they can remind the recipient to call or contact the sender, so they can certainly drive the recipient to act.

Making a follow up call is another great way to build a reputation that is thoughtful, as well as organized, and thorough.  These can be used to excite a prospect, and are primarily used to drive the recipient to act.

It is important to know which objectives are attached to which marketing efforts so you know how to track each one.  Hint:  they aren’t all tracked the same way.

Next post:  Tracking the Drive Marketing.

Learn to know what works.  Ask questions, get answers.  This blog will be updated weekly.  ~Jill Reed