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CONTINUOUS IMPROVEMENT has become a cliche. This is unfortunate because the continuous improvement concept is absolutely sound. Simply stated, it is "Learn from both your successes and your mistakes so you can do better the next time." |
Continuous improvement can be difficult to achieve, however. Today, there are many different causes for everything. Everything seems to happen much more quickly, too. We have less time to see how a decision turns out -- and less time to adjust strategies in the face of increasing competitive pressures.
HOW DOES DATA-DRIVEN CAMPAIGN TRACKING HELP ?
Simply, "data-driven campaign tracking" is the objective measurement of the success of a specific sales or marketing campaign. Statistical and information technology tools for doing this have been evolving since the early 1970's. Data-driven campaign tracking is foundation of continuous improvement paradigms because it quickly answers these important questions:
- Which customers are responding to the offer? How strongly?
- Which customers are not responding to the offer? Are they worth re-contacting?
- Which customers are buying enough to be profitable?
- Which customers have buying patterns that suggest when they should be contacted?
- Which purchased mailing list (if any are used) is worth the cost?
- Which media channel (if more than one is used) is worth the cost?
- Was the campaign worth the cost? How can the Return On Investment be improved?
HOW DOES CAMPAIGN RESULTS TRACKING WORK?
There are four components of data-driven campaign results tracking.
- A "target list" of people or companies you will be contacting.
- An offer that you will extend to them.
- A record of the costs associated with the campaign.
- A way to know when someone you contacted responds to the offer they received.
Generally, the most effective "target lists" are those selected from your existing customers as opposed to using lists of names purchased from outside sources. However, the way in which you select your target list will determine whether you are successful with your sales campaign.
The easiest and most common way of selecting a target list is the least effective. Many companies contact all of their customers in the same way at the same time with the same message or offer. This usually increases sales, but often does not increase profits. That is, revenues rise but costs rise as much or more. So, it easy to measure the (in)effectiveness of this approach simply by comparing the general increases in overall sales to the costs associated with the campaign.
A much more efficient (cost effective) approach matches selected customer segments with offers designed specifically to appeal to the customers in each segment. Measuring the results of this approach is a bit more complex. We must compare the increases to sales in each customer segment to the costs associated with contacting each segment. The extra effort of using this approach greatly improves the return on investment because it reveals which customer segments are worth contacting more often and which are not worth contacting at all. (Learn more about segmenting customers in Profiling - Seeing Customers in New Ways, Segmentation - Finding Your Best Customers and Clustering - A Dynamic Difference.)
To fine-tune campaign effectiveness, we use a measurement approach that extends two or more offers to each segment of customers. Each offer must include a way to track whether a customer responds to the offer. There are many ways to do this. For example, offering discounts based upon a promotional code is one way. Using different catalog numbers is another. However, there are many more subtle approaches. Using different phone numbers for placing orders, assigning special stock numbers and even having special website landing pages can track the effectiveness of one offer over another.
This multi-dimensional approach provides valuable insights about which offers are the most effective for each segment. It also provides information about which media channel works best and which is most cost-effective for each segment. And, by using a "control group", it can reveal ways to improve the effectiveness of advertising messages and offers. Overall, this multiple-offer strategy requires the most planning, preparation and investment, but it clearly provides the most valuable information and the highest marketing ROI.
These same techniques can be used with purchased lists of names and companies. However, using a "raw" list of purchased names is often expensive and unproductive. To use purchased list names cost-effectively, a sophisticated process called "overlaying" allows is required. Overlaying matches the characteristics of the purchased list names to those of your defined customer segments. (You can learn more about overlaying in Prediction - Finding Gold in the Data.)
WHY DOESN'T EVERYONE USE DATA-DRIVEN RESULTS TRACKING?
Today, every large corporation uses data-driven results tracking to improve their marketing Return On Investment ("ROI"). However, most smaller companies and advertising agencies do not. There are several reasons:
1. Many people involved with sales, marketing and advertising for smaller companies are much more comfortable with the "creative" side of advertising than with "numbers." They usually do not clearly understand or feel comfortable with data-driven tools and techniques.
2. Campaign tracking is only one part of the entire marketing or sales program. Only the larger companies and agencies have enough tracking and analysis work to justify the cost of having full-time in-house data specialists.
3. Data-driven marketing analysis requires specialized training and experience. Smaller agencies and companies often have difficulty finding the specialized talent needed to do it well.
WHAT IS THE SOLUTION?
Management Analtyics Group now makes it both easy and affordable for non-technical marketing decision-makers to understand and take full advantage of the benefits of data-driven marketing analysis. We provide companies and agencies with the same data-driven campaign tracking and analysis benefits that larger companies and agencies enjoy. But, we do it at a price that reflects the smaller scales and complexities that are appropriate for smaller companies.
Management Analytics Group starts every project with a standard package of six reports that have been carefully engineered to reveal "low-hanging fruit" opportunities for improving campaign response rates, sales and profits. Then as appropriate, we go on to provide additional discoveries and insights over time. This approach provides several breakthrough benefits:
- No specialized staff is required. We have the highly-trained and specialized data analysts that are needed.
- No equipment or software is required. We have the sophisticated computer equipment and software that is needed.
- No special knowledge or training is required. We explain our discoveries with graphical reports that anyone can understand and use -- and we explain them to you in "plain English."
- No risk is involved. Each of our projects
is designed to provide revenue improvements that are measurably more
than the cost.
WHAT'S THE BOTTOM LINE?
Smaller companies with limited resources can now enjoy the same benefits of data-driven marketing tools that are used by the largest corporations. Fine-tuned marketing campaigns, higher marketing ROI, improved short-term sales and profits are now all available by outsourcing the highly-technical analysis work to specialized firms like Management Anaytics Group.
You can ensure the cost-effectiveness of data-driven analysis services for your company by starting small and harvesting "low-hanging fruit" first. (Check out our Fast Fix package of reports.) Then invest in progressively more complex analyses as long as the benefits outweigh the costs. Realize that most companies find that they can quickly achieve their revenue and profit goals without using the most complex and expensive analytical tools.
Data-driven tools help you understand your customers better. These insights will trigger changes in your marketing and sales efforts. In turn, customers will shift their behavior, too. So, plan to re-measure and re-evaluate your customer's buying habits regularly. It is essential to measure these shifts and continue to adjust correspondingly. This is the essence of continuous improvment and the secret of success into the future.
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