Session6 Measurement Australian Direct Marketing Association
Session Plan � The challenge of performance tracking � Measurement categories � Strategic measurement – tracking the customer journey � Campaign measurement – Response rates – Financial metrics – Combining the two – Variations by media Australian Direct Marketing Association
Challenges of performancetracking Australian Direct Marketing Association
Tracking options:Direct sales � Call Centre: – Trackable phone numbers – Scripting – Campaign codes to receive offer � Websites: – Trackable URLs – Onsite data gathering � Mail responses: – Barcoding of DPID for scanning – Unique Reference Number which matches back to mail file � Sales branches: – Branch briefing & scripting – Consider staff incentives – Redeemable device – e.g. Coupons, vouchers Australian Direct Marketing Association
Tracking issues Measurement becomes more difficult when: – Your product is sold through a third party sales channel – Your product has a long consideration period – Your campaign runs in several channels simultaneously How do we know whether our activity has been successful or not? Australian Direct Marketing Association
Tracking options:Indirect sales � Resellers, Agents, Retailers: – Reward resellers who provide response & sales details – Joint promotions – Control lead distribution – Add an incentive for customers to get back to you after the sale (or encounter with reseller) � Whatever you do it’s going to cost you more to track than direct, so you need to balance the cost of doing this against the value it gives you. Australian Direct Marketing Association
Tracking options:Indirect sales � However much “process” you put in place to track sales through a middle man or reseller you will still not get the complete picture � You need to develop a rule of thumb for estimating overall sales based on what you do know, e.g. – Establish the base level for website hits or call centre information requests under normal conditions – Measure the uplift in activity following the promotion – Establish a ratio for hits or calls to reseller enquiries (e.g. For an uplift of 100 hits on the website, 300 people enquired at a reseller) – Establish also a ratio of enquiries to sales Australian Direct Marketing Association
Tracking options:Indirect sales “Rule of Thumb” research: � Using resellers: – Recruit a panel (sample) of resellers willing to participate in the research – normally an incentive is necessary – Try to ensure that the panel is representative of the whole channel – Brief them to record enquiries and sales both prior to a promotion and after a promotion – Run the research for as long as is necessary – dependent on the sales cycle of the product. � Using customers or end users: – In some cases post-sales surveys are possible – e.g. In-box survey, or customer registration process – Telemarketing research – either to identified individuals or businesses (if addressed media used) or sample from target group (if non-addressed media used) Australian Direct Marketing Association
Long sales cycles Sales Time Establish what this response curve looks like for your product: • If sales are direct – i.e. Trackable – ensure continuing checks over several months to monitor prospects and enquirers purchase behaviour • If sales are not direct – conduct research on known prospects to monitor their purchase behaviour • Do this enough times to establish a pattern • Create a rule of thumb which allows you to predict what the eventual result is likely to be much earlier in the cycle. Australian Direct Marketing Association
Integratedpromotions � When multiple channels are used simultaneously it’s hard to separate which channel was most effective. � Problem is most acute when analysing call centre responses � Tracking can be improved by asking responder to quote a campaign code which is printed in the mailing or email Example: a customer may have received a mail pack or email but when asked where they saw the promotion they say the TV. To solve this problem we need to do post-campaign analysis: 1. Take responder file from call centre and match back to original email file or mail file 2. Responders who received no mail or email count as TV responses 3. Responders who received a mailing – award half to TV and half to mail 4. Responders who received an email – award half to TV and half to email 5. Responders who got both email and mail – award a third to each channel Australian Direct Marketing Association
MeasurementCategories Campaign R.O.I Cost per sale Long Term ROI (LTV) Average order value Share of customer “Hard” Response rate Customer retention rate Measures Conversion rate Growth rate Customer acquisition rate Brand awareness Customer satisfaction “Soft” Promotional recall Market share Measures Customer perception Market penetration Short-term Long-term Measures Measures Australian Direct Marketing Association
Tracking the customerjourney Need to: • Identify key milestones (taps) • Measure the flow • Measure the leakage Identified prospects Enquirers First-time buyers Repeat buyers “Loyal” customers Advocates Australian Direct Marketing Association
Example – Office Equipment – Acquisition Awareness Enquiry consideration Purchase - Reach - Responses - Repeat website - Orders by - Impressions - Phone calls visits channel - Direct contacts - Click-throughs - repeat phone - orders by - Website visits - Registrations calls segment - online shoppers - order values - quotations - products Australian Direct Marketing Association
Example – Office Equipment – Retention Delivery Post-sales Cross-purchase Additionalpurchase - Delivery - Satisfaction levels - new enquiryvolumes, costs and timeframes - key data gathered conversion rates - Delivery issues - Futurepurchases - new order volumes costs and identified conversion rates - new order values & products bought - share of customer Australian Direct Marketing Association
Measuringcampaigns Australian Direct Marketing Association
Response rates Marketing Marketing contacts outcomes ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Response rate = Outcomes / Contacts Australian Direct Marketing Association
Response rates Which contacts? Which outcomes? Mail-packs sent Enquiries Applications Emails sent Emails opened Emails delivered Calls made Clicks to website Calls answered Appointments Impacts Orders Australian Direct Marketing Association
Example: Credit card sale Example: Credit card sale • How many stages in the sale? • Which stages do you want to measure? • What are the ‘key ratios’ Nos Applic- Cards Cards Enquiries Approvals ations issued activated Mailed Australian Direct Marketing Association
Example: B2B Software Example: B2B Software • Is it important to measure each stage? • What does it tell us? Nos Follow Appoint- Quotes Trials Sales Up calls ments mailed Australian Direct Marketing Association
What if we use broadcastmedia? Need a measure of exposure to your media activity: � Potential audience – The total coverage of a particular media activity � Reach – The # of people in your target market covered by the media activity � Frequency – The average # of hits on your target market by the media activity � Impacts = Reach x frequency ; i.e. the # of marketing contacts Australian Direct Marketing Association
Response rates – to summarise: � Define “Marketing contacts”: – The number of mail-packs, emails, phone calls, or… – The number of impacts (reach x frequency) � Define “Marketing Outcomes”: – Which stage of the buying processes are you tracking? � Divide Outcomes by contacts – E.g. 300 sales / 30,000 mail-packs = 1% response – E.g. 150 sales / 100,000 impacts = 0.15% response Australian Direct Marketing Association
Financialmetrics � Sales, costs, margins & profits � Return on Investment � Average order value � Cost per order Australian Direct Marketing Association
Sales, costs, margins & profit Anatomy of a sale Profit Margin Sometimes Cost of marketing Included in Marketing cost Sometimes in Cost of distribution Sales Production cost revenue Cost of production and / or Cost of service provision Australian Direct Marketing Association
Return on Investment(ROI) Textbook definition = Profit / Marketing Costs i.e. for every marketing dollar I spend how much profit do I make? 1 common variation: = Sales revenue / Total Costs Australian Direct Marketing Association
CalculateR OI - Example Sales revenue = $150,000 Marketing costs = $30,000 Production costs = $80,000 ROI using sales revenue /marketing costs = __________ ? ROI using profit/marketing costs = __________ ? Australian Direct Marketing Association
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