10 Steps to Creating an Atmosphere of ROI Accountability

Are You Failing Your Employer by Resisting Measurement?
by Merry Elrick, CBC

A recent Wall Street Journal Europe article claims, “Many marketing managers are failing their employers.” (“Ambidextrous Marketing” by John A. Quelch, October 12, 2005) The reason? According to the author, right-brained marketers lack quantitative skills, show little interest in the bottom line, and resist being held accountable.

This is not the kind of article you want your CEO to read.

Yet many marketers are stretched too thin to develop the type of quantitative rigor that belies these accusations. Creating an atmosphere of accountability requires time and budget many marketers don’t have, yet that is what they are charged with today. And they’d better include ROI metrics, because that’s really the only measure CEOs care about.

So how’s a marketer to foster ROI accountability? Here are ten basic steps:

1. Align marketing’s goals with your organization’s goals

I know this one may seem painfully obvious, but ask yourself if every marketing decision you make supports your organization’s business goals. These goals are almost always related in some way to bringing in revenue, increasing short-term cash flows, maximizing profitability or building long-term value.

Maintaining an alignment with business goals requires constant vigilance. If adding a flash intro to your Web site will not contribute to short-term cash flows or long-term value, then why are you doing it? When you’re disciplined to think of programs in light of the return they generate, you’re more likely to have greater returns.

2. Separate business-building marketing communications from brand-building

Yes, yes, brand building does result in new business, ultimately. At some point. And business-building marketing does build the brand too. But try to distinguish between the two for measurement purposes.

The easiest way to do it is by objective: If a marketing program is designed to generate leads to increase short-term cash flows, then you can categorize it as business-building. If it’s designed to create long-term value, it’s brand-building. When you make this distinction, you can begin to track business-building results. (More about brand-building results later.)

3. Create business-building programs that are designed to generate leads

That means encouraging customer and prospect interaction. Actively seek feedback online and off. Induce responses through good old-fashioned offers like free white papers, guarantees or coupons. In other words, begin a relationship with prospective customers.

Of course this is easier said than done, but if you want to create business-building marketing, it’s important to provoke responses. And then capture and maintain that response information.

4. Follow your marketing communications investment

Begin by building response mechanisms into every tactic in your marketing communications mix. And each one should be coded with a unique 800 number, e-mail or URL. Work with your IT department to track online communications. Save room in your budget for training your call center personnel to ask how the inquiry originated. Everything designed to build business must be trackable.

And it’s critical to know every detail of every response generated by your marketing efforts. Make capturing and recording lead data systemic to your organization.

5. Make the VP of Sales your new best friend

S/he already is, of course, because you’ve been working with him/her to create marketing communications that will generate leads for the sales force. Right? But become even better buddies so you can follow-up on those leads.

You have to tie your marketing tactic to the resulting lead and then follow it through to the sale in order to calculate ROI. So you’ll need feedback from your new best friend to let you know when a sale is made. If you absolutely can’t play nicely together, you’ll have to get sales figures elsewhere, like from accounting.

6. Establish a lead qualification program

Another reason to be pals with sales is to find out how they define a qualified lead. What are the parameters of a hot lead versus a warm lead? How do you nurture the leads that are not quite ripe?

If you are investing in marketing that is designed to generate leads, you must know the quality of those leads. And sales can help you develop criteria for what constitutes a quality lead. When you pass along only the best leads and manage the rest, you make the process more efficient.

7. Develop a relevant database

Your company may have any of a number of systems that include lead-tracking modules. Chances are they won’t link your marketing efforts to the leads generated and then to the resulting sales. If not, work with your IT department to develop a database that is relevant to your needs.

You’ll want to know what part of your marketing mix is pulling the greatest amount of leads, how many leads convert to sales, and how much revenue they bring in. You’ll want to know details about respondents and their companies. You’ll want to compare campaigns, and tactics and media for their efficacy. And keep track of your budget versus costs-to-date. And so much more.

If your current system can’t deliver the metrics you need to determine ROI, then work with your IT department, or outsource to someone who can do it for you.

8. Measure ROI, not “click-throughs”

ROI is a financial term. Period. It is not an increase in awareness, market share, click-throughs on your Web site, or even the revenue generated from marketing communications. It is the profits generated over and above the initial investment and expressed as a percent on the investment.

That said, every company seems to have its own standards for defining terms and making the actual ROI calculation. Find out what your company’s standards are. Make the CFO your other new best friend. It will be one less person you’ll need to convince of the credibility of your metrics.

9. Manage your budget as the investment it really is

Once you know the ROI of all the components in your marketing mix, then you can compare to see which programs yield the greatest ROI. You can see what creative is most effective, and which publications deserve to remain on your media list. You can save money by eliminating what isn’t working, and invest more in what is.

Ultimately, you’ll increase your ROMI-return on marketing investment. That’s how powerful tracking your marketing efforts in a database can be.

10. Recognize that not every marketing program lends itself to ROI measurement

Now we get to brand-building marketing, which is more difficult for B2B marketers to measure than business-building. Measuring components of brand equity-brand awareness, customer loyalty, perceived quality-can certainly be accomplished. But if you want to demonstrate ROI of your brand-building marketing, then you have a more difficult task.

Emerging technologies and complex modeling offer some hope. Econometrics, which uses statistical analysis to measure the relationship between different sets of events, is beginning to take hold in the B2C world. But these complex solutions are likely to cost more than an entire B2B budget.

Does this mean we should abandon brand-building marketing? Perish the thought! It just means we may have to convince CEOs of the power of brand in other ways-increased awareness, for example.

We should show ROI when we can. When it isn’t feasible, we must make whatever meaningful measures we can-and embrace the idea of being held accountable.


Merry Elrick is president of DataDriven MarCom, Inc., which provides B2B marketers with full-service ROI metric management.

Defining ‘Moments of Truth’ in a Business Customer’s Lifecycle

marketing ideas romancing the customer

by Joseph Fiochetta

There are several critical times during a customer’s relationship where a decision is made–by the customer–to continue or discontinue interacting with a company. This may be the first bill, a customer service call, a retail experience, a Web site…any event that helps clarify the relationship with a particular brand, product, or service.

We call these “moments of truth” and how a marketer interacts with the customers can significantly increase (or decrease) the long-term viability of that relationship. Identifying and anticipating those points of clarify is critical to maintain and grow a profitable customer relationship.

Staying Connected with Customers
For one telecommunications leader, economic and competitive pressures were making it increasingly difficult to attract and keep new customers in a highly competitive space.

New small-to-medium-sized business customers represent a substantial economic gain to this communications services provider because these customers generate a higher percentage of cross-sell opportunities and are one of the faster growth segments in business today. But new customers typically tend to be more vulnerable to competitors and generally churn at a higher rate during the first weeks and months of the business relationship.

Within the company, customer communications were siloed–in the same way that products often are siloed–and “touch points”–points of interaction–with small business customers were driven by regulatory and budget constraints. They were not based on each customer’s actual need. For example, within the company’s old business model, small business customers received multiple contacts from various channels (direct mail, e-mail, teleservices) across various products with no integration.

A customer’s first contact included an informational and legal document to confirm an order–traditionally a generic, off-brand direct mail piece with no offer.

This was followed by a number of different welcome kits from each product category that were sent up to three months after a new customer’s service activation. In addition, customer service was not integrated into the marketing mix so contact with the customer was conducted independent of other channels.

Senior management recognized that the more services a customer purchases from a telecom provider, the less likely customers will take their business elsewhere, but the move from a product focus to a customer focus was not an easy one and required a commitment from multiple stakeholders within the organization. The shift away from how the company was organized versus how customers engaged with the brand created an impact on the organization at strategic, tactical, and operational levels.

Developing a Plan to ‘Onboard’ New Customers
Critical to success was key stakeholder buy-in throughout the process. To combat the problem of new customer turnover, the telecom performed a number of qualitative and quantitative measures necessary to realign the new customer experience.

First, three guiding principles were established to focus the plan:

  1. All communications should generate a measurable response so that management may tell–at an individual level, as well as at the intervention level–what worked and what did not.
  2. Customer-centric communications must be frequent and consistent, targeted, timed, and delivered in a manner that is most appropriate for the individual customer. Tracking preferences and behavior is essential.
  3. Communications should be focused on increasing “stickiness”–which is the ability to keep a consumer coming back for more. Thus, each customer’s value over the time of the relationship is tracked.

The first step was to understand business priorities and analyze and document the telecom’s current state. Through customer focus groups, data analysis, contact mapping, impact analysis, and an environmental scan across multiple industries, a “best-practices approach” to prevent customer churn was developed.

As the company set out to develop best practices in developing new customer communications, it learned that:

  • The first 90 days are critical – there can be as much as a 15% to 20% “take rate” of additional products and services during this initial period.
  • The sooner one can engage a customer, the better.
  • Messages developed early in the relationship should be designed to set and validate customer expectations.
  • Personalization works!
  • Using multiple touch points across a variety of media are preferred by customers – because channel preference is situational.
  • Multiple response channels are essential.
  • Surveying and data gathering are critical components for gaining customer insight. Programs that are data gathering stimulate: customer interaction, transactions (revenue), stickiness (retention), and usage.
  • The velocity of customer communications and engagement should increase during “moments of truth.” Trigger-based programs, ones where offers and dialogue are built upon data-based business rules, can enhance an already effective new customer strategy.
  • Consultative selling is a key part of any customer program and can help avoid negative “moments of truth.” Right-sizing and proactive account management can effectively stem high attrition during choke points in the customer relationship.
  • A product-centric focus is not the key driver in new customer retention. Customer-centric programs that address the lifecycle of the customer through vulnerable periods are more profitable.

From this insight, the company set out to identify the critical milestones for each business customer through time-driven occurrences and data-driven activity. The customer’s “relationship” with the company was marked by five key lifestages: courting, honeymoon, newlywed, settling-in, and getting-the-itch. Within each lifestage, expectations were established and the metrics for success were developed to support the business case for this new change.

Implementing the New Approach
At the core of the company’s new strategy is a precise contact strategy that optimizes each customer interaction. Channel alignment, combined with predictive modeling and analytics as well as customer-centric messaging and creative, is the foundation of this evolving new customer onboarding process.

At each lifestage, the focus and intent of the communications change as a customer progresses from one stage to another. As a result, the telecom is able to identify each stage and allocate the right offer, message, and budget to that customer’s situation. This enables the telecom to communicate with customers when they are prone to churn.

Small business customers are contacted several times within the crucial first six-month period, not including billing and account information. Number of contacts, channel mix, message, and offer are determined by in which lifestage a customer resides. Further, each contact is treated as part of a continuity curriculum, where the conversation with the customer extends over a period of time versus the traditional single message approach.

For example, during the “honeymoon” period, a single welcome kit is sent within five to ten days from service activation (versus 12 weeks). This package establishes the one-to-one dialog with the new customer and thanks the customer for choosing the telecom, delivers product information, sets expectations for the customer experience, and validates the decision to interact with the brand.

While entering the “newlywed” stage, new customers receive messaging that acknowledges the products/services the customer currently has and offers additional solutions or offers based on how they migrate through the telecom’s solutions. The goal of this effort is to provide the customer with evolutionary products or services rather than the telecom’s focus product during that time period.

In the “settling in” period, customers can expect to receive loyalty-based packages with savings designed just for them–so the more detailed the information about the customer, the more dynamic the communication stream, and the more successful (and profitable) the customer interaction.

This right-message, right-time approach extends to other channels throughout the process. The sales and direct marketing channels work closely together to present a consistent and cohesive face to the customer.

Throughout the onboarding period–from service activation through month six, the telecom company is able to “right-size” a customer’s product and service mix through: account reviews, consultative-selling via inbound and outbound telemarketing, and rules-based triggers that can help identify and stem a potential churn event.

Of course, this new approach requires changes to infrastructure, budgets, and available resources that will be deployed over several phases. Although still in the first phase, early indicators point to the success of the new program. The telecom company was able to reduce customer churn, increase sales and revenue, and experience higher overall response rates as a result of the innovation.

By implementing customer-focused communication “best practices,” a marketer in the business-to-business space can optimize the profitability of new small business customers for the long term.

marketing ideas leadership

Joseph Fiochetta is director of strategy for Harte-Hanks, a worldwide, direct and targeted marketing company that provides direct marketing services and shopper advertising opportunities to a wide range of local, regional, national and international consumer and business-to-business marketers. He can be reached at (215)750-6600 or at joe_fiochetta@harte-hanks.com.

Marketing Idea #73: The Casual Survey

Marketing Ideas Casual Survey

If you aren’t doing so already, casually survey all clients before they cash out. Kindly request their permission to ask them basic questions about their occupation, their use of time, the reason why they’re in front of you, what they like (and would improve) about their experience, and so on. This will give you a better idea of who comes to your store and why. Train your staff to do the same. Ask the same questions of everyone.

Tip: You don’t have to ask a flurry of questions from every customer that walks through your doors. Ask a single question of every customer one week, another question the next, and so on, and you will begin to shape a picture about the people who shop from you.

Marketing Idea #74: Exit Interviews Are a Must

Marketing Ideas Exit Interviews Are a Must

Conduct exit interviews anytime you have an employee submit his resignation. In conducting this survey, you begin to determine where you’re falling short in keeping your people. Often, you’ll find that money isn’t the top issue. What you’re looking for is how you are able to improve your internal marketing. How do you craft a culture that keeps and nurtures the best employees? How do you build fierce loyalty and pride among your employees? Among your customers? Your vendors? Begin asking the tough questions. The sooner you get the answers, the sooner you’ll be able to emerge as a company people aspire to work for and with.

Marketing Idea #75: Mystery Shoppers

Marketing Ideas Mystery Shopper

Mystery shop your competition. Mystery shopping is shopping with your competition, under the cover of anonymity, with the intent of seeing how they perform. Consider this marketplace espionage. While much less direct than simply introducing yourself and swapping stories about successes and follies, this still gives you vital information about what they’re doing, how they’re doing it, and how you may better leverage your own efforts.

Better: Pay someone to mystery shop you. Look for the good, the bad, and the ugly. Act on what you discover.

Variation: While there are professional mystery-shopping organizations widely available, there is another way. Seek out strategic partners within your network, and arrange to have them shop you. Tutor them on the facets of the customer experience you would like to know most about. This may even be a reciprocal effort, where you shop them in return.

Tip: You must remain open to criticism if you’re going to have yourself shopped. Being closed-minded to the results may render them useless and leave you in the dark.