Inside Strategic Relations; April 15, 2005 Edition
From the Center for Strategic Relations, a twice-monthly supplement to Applying Strategic Relations, mailed at your request
Marketing Results Actions
"Things that can be observed and measured can be improved." -- Justin Hitt.
In today's lesson discover actions to take that help you create measurable returns in your marketing activities, and how these indicators quantify relationship value.
Business relationships aren't always one-to-one connections; this lesson shows you some way to monitor relationships with groups of customers.
What does every executive want? As much as business relationships are abstract concepts, the results of such relationships are measurable in many ways.
By far, executives want to know their efforts are producing measurable results in a way that creates a greater return on investment. Isn't this something you'd like too?
A measure of relationship strength is the customer's response to marketing activities. Why is response so important? Because customers and prospects, only respond to companies they trust.
Trust is a factor of credibility, belief, and the understanding that you can relate to a customers problem. The factors that tell a customer its okay to buy are the same factors necessary for a strong growing customer relationship.
If you want to create measurable returns in marketing, you will:
Directly support the efforts of your sales force. Marketing is useless if it doesn't directly influence the close of new business opportunities. Work with your sales team to understand what is necessary to establish trust so that ideal prospects choose to do business with you.
Represent the interests of customers over the company.Each marketing piece will advocate benefits customers receive from your solution while saying very little about who you are. If marketing talks about your company, you can rest assure your customers aren't going to be listening.
Present solutions in terms of the customer's experience. To do this, your entire organization must invest in understanding your customer's wants and desires. That means sales needs to know about motivations, service needs to know about fulfillment expectations, and marketing must know where to find qualified buyers.
Monitor marketing metrics religiously.By tracking conversion rates, you can identify marketing channels that generate the most profits and lifetime value for your organization. Each campaign should pull its own weight pushing your company towards positive margins.
Segment your database. With your clear understanding of customers and prospects interests, create sub-groups that identify individuals who require special attention. Then analyze trends in standard indicators against these segments to find both groups of profitable customers and those who are underserved.
Track standard indicators of relationship value. Monitor trends in cost per lead, cost per sale, customer lifetime value, and RFM measures. Automate RFM (recency, frequency, and monetary) tracking to save time while improving your ability to review these indicators across segments of your customer base.
Develop satisfaction indicators that tie emotions to customer actions. This is perhaps the hardest action to improve measurable results. Once you determine how a customer feels about certain problems, you'll be able to influence their decisions at to take action
today rather than later.
Response to marketing campaigns is an indicator of relationship value, but in order to know what response you are producing, you must measure. For marketing to understand the dollar value derived from a particular campaign, they will need the support of sales.
When sales and marketing works together, they can measure from first contact to repeat purchase in a way that helps optimize the entire selling process. Take these actions and you'll be able to measure returns in marketing, but also have an effective tool for cultivating business relationships.
