Blogs seem to be all the rage these days.  Tens of thousands of new ones launch daily and the latest count from Technorati was at somewhere close to 70 Million blogs.  The bigger story, however, is the increasing influence blogs are starting to have on consumer behavior.  According to a recent study  while TV, e-mail, and radio continue to be major drivers of consumer buying behavior, blogging actually had an influence on 6.1% of purchasers (of electronics).

A conclusion from the researcher was as follows:

Marketers need to better understand the changing dynamics of the consumer media market and develop new marketing plans that integrate new media to replace the erosion of traditional media for influence to purchase. Marketers who can’t tap new media options for their influence to purchase will suffer a decline in advertising ROI.

So most marketers of course will read this information…and go start a blog!  DirecTv has recently released a set of ads featuring fictitious cable company executives in the board room discussing strategies to grow sales. If you haven’t caught them you can find the full series of ads here (all of which are funny) but my all time favorite pertains to this particular topic:

The sad part of the whole thing is that I bet there are a LOT of presentations very similar to this ad based on some executive reading the above quote and telling his team that they need to”go viral.”  I have actually sat through one or two of them.  But on the other end of the spectrum from the marketers who are trying to “blog it out” there does sit a good, effective, and time tested way of connecting with your customers via the web.  If you look back at the study I reference earlier you’ll notice that the single highest influence on consumer purchasing behavior was not TV, coupons, web ads, or retail promotion - it was word of mouth (with 42% saying it influenced their purchase). What does this mean for marketers?  Make a good product, communicate with your customers, build a relationship with your customers, and over time you can harness the most powerful marketing tool out there -your customers.

The web provides an incredible set of tools for connecting with and influencing potential buyers but as this ad points out, it must be part of an overall strategy to build long-term relationships with your customers.  Over the next few months we’ll be sharing what some of those strategies look like (including a discussion of paid blogging services and the power of youtube) but it will all be viewed in the context of an overall brand building strategy.  In the meantime, start to plot your next move for reaching the “suburban tweens”

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Forrester is projecting that internet sales will reach $204 Billion this year.  That’s a big number and growing in large part because the web has taken accountable, direct-to-consumer advertising to a new level.  While we previously used TV, radio, and print advertising to target general demographics (say 25-45 year old females) we are now able to use the web to target extremely specific demographics (someone doing a key word search for “weight loss supplement”).  Practically that means you may pay more money per impression BUT due to the fact that the advertising is specific and targeted (and efficient), you theoretically have the potential for higher ROI on your marketing dollars.

Sounds like the holy grail of advertising right?  Well, not exactly.  Just as we struggle to accurately measure and account for TV response calls (and consider unique callers, CS calls, junk calls, etc.) the web has also had its own difficulties.  You’d think that the powerful internet would at least be able to tell us how many people visited a site but as reported in the New York Times that is not always the case:

How many people visited Style.com, the online home of Vogue and W magazines, last month? Was it 421,000, or, more optimistically, 497,000? Or was the real number more than three times higher, perhaps 1.8 million?
The answer — which may be any, or none, of the above — is a critical one for Condé Nast, which owns the site, and for companies like Ralph Lauren, which pay to advertise there. Condé Nast’s internal count (1.8 million) was much higher than the tally by ComScore (421,000) or Nielsen/NetRatings (497,000), whose numbers are used to help set advertising rates, and the discrepancies have created a good deal of friction.

As a marketer, this may leave you befuddled but take heart.  As we’ve discussed on this blog before, the key to metrics based management is to define the metrics and then consistently track and manage to those metrics.  Here’s what that means for the web:

Get consistent and get accountable. As highlighted by the NYT you could run metrics reports for a website from three different platforms and get three different numbers for unique visitors.  How do you deal with this?  Get consistent by having a single tracking platform and get accountable by requiring your web providers to operate on your standards.  There are some excellent free options for this (Google Analytics, Index Tools) and even better paid alternatives (Omniture).  Figure out what meets your needs and then deploy it across your websites.  The beauty of these metrics platforms is that they can be deployed on both INTERNAL and EXTERNAL sites.  This is the only way to create a consistent, level, and accountable playing field so you really know what’s occurring on your websites.

Know what to track.  The first time you log into a platform like Google Analytics you might feel overwhelmed.  Visits, sources, keywords, adwords, pageviews…the list goes on.  Now if the goal for your site is to simply build brand awareness, then you’ll be looking at an entirely different set of criteria.  If your goal is commerce (which we assume it is) then figure out both your core metrics and supporting metrics.  One example of a good core metric is Revenue/Visit.  This takes both conversion (orders/visits) and AOV (average order value) into account and allows you to quickly see your overall trend for the web.

Tracking by media acquisition channel.  In the early days of the web there was a lot of easy money for DR Marketers.  Paid search and banner advertising were the hot new mediums and TV driven campaigns enjoyed exceptional performance as they already had great brand awareness.  Many marketers (including myself), didn’t know or didn’t care to really understand the full intricacies of their web business, so they’d rely on a service provider who would charge very low, or free, setup fees (DR marketers, often times to their demise, are really attracted to FREE),  in exchange for a percentage (sometimes as high as 30-50%) of every order.  This model works great if you have insanely high margins but it fundamentally doesn’t consider the internet as both an order taking medium and a customer acquisition channel.  The customer who comes to your website (or finds it via google) because they saw your product on TV should be completely separated from the customer who found your product advertised on a weight loss forum and clicked through to your site.  While paying 30% for the customer coming from the weight loss forum, it does NOT make sense to pay 30% for the customer who came to your site because they saw your TV ad which you already spent a lot of money on.  This may seem like a trivial point but it is absolutely critical that you distinguish your customers by media acquisition channel and not only by ordering channel. Pay close attention to your metrics but be sure to do so in a way that allows you to make this important distinction.

Test, Test, and then Test Again.  The internet provides quite possibly one of the inexpensive and accurate ways to conduct true A/B tests. When you test an A/B script at a call center you’re confronted with many potential variables (agent mix, training, compliance) but on the web you have the opportunity to normalize many of these variables and use consistent metrics to make comparisons.  Take advantage of it!  Don’t be afraid to test new offers, new creative, A/B site splits or e-mail splits and in the end roll those learning into your overall marketing strategy.

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A reality check

Call centers, IVR platforms, blended live agent/IVR solutions, and dynamic call routing platforms are expensive. With the high cost of media and persistent downward pressure on profit margins, picking the “right” telemarketing solution can be the difference between having a direct marketing hit and a case study miss.

In the realm of direct to consumer marketing, telemarketing costs can be higher than the cost of the product being sold, and are typically the 2^nd or 3^rd biggest expense behind the cost of media. Sales commissions, talk time fees, set up fees, script development, custom reporting and programming charges all conspire to drive up the cost of doing business “direct” for marketers.

Some good news

We can expect more and get more from our investment.

With some informed selection, a collaborative and accountable work style and an uncompromising focus on results (vs. activity), direct marketers can expect (and achieve) truly great results from their telemarketing partner(s).

So, looking to change call centers? Test a new one or link two or more together? Want to test that automated attendant, intuitive speech recognition / IVR solution? Think a blended approach makes sense? Here are some considerations for choosing the “right” type of solution and getting the most out of your investment:

1. Offer type - soft offer or hard offer? If price is not mentioned in the ad (i.e. “soft offer”) for a “risk free trial” or “call now to find out how…” or “call now for your free…” offer, live agent call centers are the best. So-called soft offer call centers are in essence your commissioned sales force, and they are skilled at the art of selling – they’ll inform and persuade the curious callers to take your offer. When price is mentioned in the ad (i.e. “hard offer”), callers are typically more ready to “buy” (they already know what they’re going to get and how much it should cost them), and therefore do not require as much “selling” (when compared with soft offer callers)…the key for this type of offer (and caller type) is efficient order taking, which means less art and more science is required at the point of sale. Live agents can get the job done, but consider the automated attendant options – test both and compare results. The benefits of automated attendant platforms (i.e. 0% abandonment, 100% script adherence) can be compelling, and can be a nice complement to the live agent strategy.

2. Medium (and media plan), messaging - TV short form (“spots”), TV long form (infomercials or “shows”), print, radio or direct mail? Broadcast or cable? Local newspaper or national magazine? First class mail or bulk rate? You get the jist – the point is: the combination of messaging and medium drives various caller (and potential “buyer”) profiles as well as the “call curve” for a specific ad impression.

An understanding of caller profiles (i.e. their demographic, psychographic, geographic info) is important input to selecting (and optimizing) a telemarketing solution.

As an example, if you’ve got a mature (i.e. baby boomer and older) and evenly skewed male/female caller profile responding to a soft offer, long form radio show for a relatively high ticket (i.e. north of $150) dietary supplement, it is likely that a purely automated attendant telemarketing solution would yield unacceptably low conversion rates; in contrast, the same caller profile directed to a boutique (i.e. small, few clients, highly trained and well-compensated agents) soft offer call center is likely to be converted at least twice as frequently.

An understanding of the “call curve” (i.e. call volume and timing relative to ad impression – low to high, impulse or delayed; call density – number of calls over a time interval, say, per half hour) is also important when considering telemarketing solutions. As a for instance, direct mail and print advertisements typically generate a fairly smooth and predictable call curve, with a large percentage of those calls generated during the daylight hours of Monday to Friday – good to know if you’re the call center manager in charge of scheduling and staffing, and great to know if you’re a call center owner because you know that overnights and weekends are (generally) more difficult and more expensive to service.

In terms of handling high call volume as well as high call density (or “spiky”) call curves, the larger call center companies (with more “in house” capacity, typically across multiple physical centers, and even continents/time zones, but sharing the same “in house” telecom and technology backbone) and automated platforms are typically best at (consistently) delivering the service levels marketers require (and that media buyers love). That said, call management technologies that provide call routing options (whether third party, stand alone like Intellimedia’s www.intellimedia.com or those offered by a combination of call center and their telecom carrier) can be employed to daisy-chain (or hub-and-spoke) multiple small call centers together to create a larger ‘virtual’ call center and thus absorb more calls.

3. Initial media budget, spending growth plans – both affect call forecasting (read: demand for your telemarketing partner’s capacity, including live agent scheduling) and call service levels (read: your telemarketing partner’s capacity, including live agent scheduling). Over communicate the growth plans (and changes in plans) with your telemarketing partners – consider developing a collaborative planning model where media buyers and telemarketing work together and interact directly. Track forecast accuracy, call service levels (read: call answer rate, or one minus the abandonment rate) and make updates to call projections and staffing models regularly.

4. Outcomes and results – define success with your telemarketing partners. Calculate, articulate and then communicate the “success metrics” and “service level” expectations you have for the marketing campaign as well as for the telemarketing partner. Develop a scorecard with specific KPI’s – metrics along with their calculations – and their targets (i.e. revenue per unique call in; minimum performance as measured weekly needs to be $45 excluding third party cross sells). Consider tying compensation to performance. Expect call centers to record all calls, provide compliance reporting – monitor and spot check the process to your satisfaction. Ensure 100% call dispositioning – know where every call that hit the switch ended up…have programs in place for recovering all of the “leakages” (i.e. every call that hit the switch that didn’t result in an order is a leakage). Lastly, expect full transparency and accountability of the call reporting, order management, payment processing and data movement (i.e. data file transmission of media results to media buyers) processes.

5. Recommendations - good sources for referral of leading telemarketing solution providers include trusted business partners and other marketers, colleagues in your industry peer group and “ecosystem”, as well as trade associations such as the Electronic Retail Association (www.retailing.org), Direct Marketing Association (www.the-dma.org). In particular, we’ve found that media buyers and production companies (whether for print, TV or radio) are typically in the know about “what’s hot and what’s working”; “telemarketing consultants” and “campaign management companies” generally have fact-based and empirically supported recommendations as well.

In general, my suggestion to those shopping around for telemarketing solutions is to do three things: first, do your homework – be ready to articulate your business objectives and then translate these into measurable success metrics / service level expectations for your prospective telemarketing partner. Second, when considering recommendations for telemarketing solutions, perform your own due diligence or work with someone who’s independent and objective – be critical of unconditional and unqualified recommendations and be clear about the motivation (financial, personal, other) for the referral. Lastly, test and learn – set up a controlled test (or set of tests) and learn firsthand what works with your combination of marketing variables and the chosen telemarketing solution.

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We’ve all heard the scoop on our competition from some other industry source.  Supposedly their campaign is generating millions in sales, has a 3.0+ MER,  40% web conversion, has an average of 5 turns of continuity…AND only a 2% return rate.  You start to beat yourself up over the harsh reality that you are nowhere near any of these numbers, and it can be a bit discouraging.  Well, two months later their show goes off the air and you hear the company has gone belly-up.  What are we missing here?  Well, my initial guess is that the supposed “scoop” was probably a combination of white lie, some exaggeration, and about five different definitions of each metric being referenced. One of the key reasons we have metrics is so that we can compare ourselves to others, however, one of the main reasons we resort to faulty comparison is because we are not comparing apples to apples. The correct comparison of metrics is often called benchmarking.  Our dear friend Wikipedia defines this as:

The process where you compare your process with that of a better process and try to improve the standard of the process you follow to improve quality of the system, product, services etc.

How to benchmark

Okay, so you are interested in benchmarking.   Where do you start?

Before you can compare yourself to others you need to compare to yourself.  It may be intuitively obvious but nonetheless necessary that you know your KPIs (Key Performance Indicators), know how you’re trending, and know what you’re trying to achieve.  If you have not done so yet then define all of the metrics for your business and begin methodically tracking each one.  Learn what affects them, learn how to improve them.

Seek out real data, not hearsay.  I could tell you that my campaign converted at 60%, 47%, or 36% last week.  All numbers could be true but are meaningless unless I tell you exactly how I measure conversion.  My suggestion is that unless you have a reliable means to get real, rich, data you should focus on the simple things that could be useful in your decision making process.  Example: you have a weight loss product and you know your media agency has a similar product and are running a large TV campaign.  If you are able to reliably determine from your agency that their creative runs at 50 CPK (Calls per thousand in media spent) and you test a show that runs at 20 CPK you can save yourself a lot of time by immediately focusing on better creative.  The reason I would choose a metric like CPK is first, that it’s a good indicator of your front end creative success, and secondly, it’s a measure that your media agency should reliably know.

Dig in to the minutiae and test. So, what if you’ve figured out your metric and also figured out you’re lagging behind your competitors.  What can you do about it?  My suggestion is that you dig into every little detail of both your campaign and your competitors.  There is no silver bullet out there but we at KPI believe that systematic diligence and testing will pay off in the long run.  Look at other websites, call other call centers, sign up for other continuity programs.  Be careful not to assume whatever they’re doing is better than what you’re doing, but also be sure to never stop testing.  It’s the only way to improve.

The future of benchmarking

Several weeks ago Google announced something pretty revolutionary: the addition of benchmarking tools to their Google Analytics platform.  Basically what this boils down to is that anybody who chooses to share their data will be able to see how they stack up against other competitors in their industry vertical space.  What makes it so powerful is the fact that it is real data coming from real sites and that it is a common standard (no fudging of the definition of MER is allowed!).  Personally I think this will be the future of benchmarking in the DR space.  We will no longer have to distill the hearsay from truth; instead technology providers will serve as data aggregators.  Companies that so choose will be able to objectively and confidentially know how they stack up against the competition and in the end we’ll all be better because of it.  And isn’t that the point?

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There’s a decent amount of discussion around what Seth Godin and others have termed interruption media.  For those new to the term:

Interruption media advertising is advertising based on the idea that a consumer is given entertainment, information, etc. and that is then interrupted to serve an ad to the audience, whether it’s a print ad in the middle of your Cat Fancy magazine article, a banner ad along the top of a CNN.com story or a TV spot during Grey’s Anatomy.

I’ve been thinking about this in the context of direct response TV advertising. Part of the beauty behind the half hour TV infomercial is that it is NOT interruption advertising in my opinion.  Yes you could argue that the “interruption” occurs as you’re flipping from one thing you’re watching to another but by and large if you watch a half hour infomercial you are very clearly choosing to do so.  So why do people choose to watch these often ridiculous selling pitches?  Entertainment and Education.  Who doesn’t get a kick out of the shows like the Magic Bullet or watching Billy Mays hawking another cleaning product or appliance?

So can long-form infomercials continue to be viable as viewers move more and more to on-demand entertainment?  It certainly poses an interesting question and certainly raises the bar for the marketer to both entertain and educate.  Heck, I’d love to see Comcast offer me on-demand infomercials and tell me which ones are highest ranked by viewers.  What if they could not only rate the show but also the product (if they’ve rec’d it).  The good shows would certainly rise to the top and the people with the biggest budgets but crappy products may not always be the winners.  Could be quite interesting.

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So here we are.  Post #1 on the KPI Blog.  I’m sure there are many questions bubbling up in your head right now (there are in mine) so let’s just start at the beginning:

Who is KPI Direct? 

We’re a small firm that works with direct-to-consumer marketers.  Kind of a fancy way of saying we work with (some of) the companies who have the 3am TV infomercial where you can “get a free bottle of our fountain of youth supplement just for calling!”  We run campaigns on TV, Radio, Web, Mail and Print.  Generally we stay in the health and beauty category although we’ve chosen to steer clear of certain products within the space (we don’t do the sketchy e-mails that promise to make certain appendages bigger or longer…just not our bag).

Why the heck do you have a blog? 

Good question and I can’t say we have the perfect answer (yet).  What I do know is that there are massive changes in HOW marketing is done as technology continues to evolve.  Part of this shift is the move from outbound (the marketer finds you via TV, Radio, Print, Mail) to more inbound (you find the marketer via web search, blogs, word of mouth, etc.).  Yes, at this point you might be baffled that we (KPI) as true outbound marketers are starting a blog (the epitome of inbound/opt-in marketing).  Well, I guess that’s the whole point - we believe outbound marketing is going to change dramatically with the advent of efficient inbound marketing tools.  We believe a lot of traditional outbound marketers are going to be SOL if they don’t embrace the change.  And we’d like to be at the center of the discussion as the whole thing continues to develop.  We also believe that success in marketing is driven more and more by deep analytics and disciplined execution.  Marketing is becoming much less art and much more science.  If you don’t believe me then look at just a few of the companies succeeding today.

What can I expect from reading the blog? 

Well, hopefully we’ll provide some worthwhile food for thought, some practical case studies of marketing in action.  We plan to share interesting things in our space as well as the general marketing space and hopefully not take ourselves too seriously along the way. Also, please do join in on the discussion (note the little link below that says “comment”- we put it there just for you).

So there it is.  Post #1.  Hopefully many more (and better ones) to come.

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