I attended a great presentation this week, put on by the Calgary Marketing Association. The speakers were Jeff Nelson and Jake Blumes, both friends and colleagues of mine, but whom I had never seen collaborate before on a presentation — and the result was very eye opening.
Jeff first talked about marketing metrics – i.e. ways of measuring and tracking the performance of your marketing program. He stressed that there many kinds of data out there, and that it can all seem very overwhelming as to what data is really important and relevant.
So, he presented a clear funnel model of what a business might wish to track — starting with impressions at the top of the funnel (i.e. how many people might see your ad, followed by visits (i.e. to your website or physical location), which become leads (where someone gives you their contact information allowing you to follow up) and, followed by offers (your proposal or price quote), and finally sales (where you get the cash) at the bottom of the funnel. Nice and simple.
So how does this apply to real life?
Marketing Metrics Case Study: Grants International
Hand it over to Jake Blumes, who works for Grants International – a company that spends a significant amount on advertising each year, across multiple channels. Since Grants International helps its customers get tax refunds through showing them how to file correctly, almost all of its traffic is one-time, meaning they must work very hard to continually generate new customers – about 10,000 leads per year in fact! Jake has been in charge of their marketing program for 9 years, and has excellent year over year data comparing the results across different media.
Jake explained that there are really two success factors for a given media — 1) the amount of leads it generates for the cost, and 2) the possibility that those leads will close, i.e. actually buy from you (also known as a Conversion rate). And that you must measure BOTH things to make a fair comparison.
Here are some interesting things revealed by Jake in marketing for Grants International. Now, this won’t apply exactly to your business’ results necessarily, but this is what Jake found for Grants International:
Telemarketing: Quite cheap to execute ($15-20/lead), and generates a lot of leads. Problem: Only a very small number of the leads generated actually will buy (2-3%).
Direct Mail: Cost per lead is higher ($100 – $125/lead). Addressed does a little better than unaddressed, and has a higher conversion rate (15% vs 10% for unaddressed). Problem: You can’t always get lists for everyone you need to reach, so some of both may be necessary.
Print Advertising: (Newspaper, Magazines, Inserts): Cost per lead is about the same ($75-$200 for high end magazines) but the higher end stuff has a good chance of becoming sales (20 – 40%). If you get a carefully targeted magazine, poly bag “outserts” give very good bang for the buck.
Web and Ad Search: These are quite cheap ($45/lead) and convert quite well (20 – 40%), but the question is, are people likely to be searching for your service or not? Grants International, for example, does not. Why? People don’t realize they should be thinking about certain kinds of tax exemptions until Grants International points it out to them. This means that they need to get in front of people assertively, not wait for people to search them out.
What about television? Jake says they tried it, and of course measured its results carefully, but it didn’t generate as many leads for the dollar, so they dropped it from their regular campaigns.
Insights to Marketing Measurement
The numbers Jake presented really make you think. Some more aggressive techniques, like telemarketing and perhaps even direct mail, might keep your sales team busy with leads they can “work” – but they might not be as high quality as a lead that came in on their own volition – i.e. saw a detailed magazine ad, and thought, “Hey this sounds like something I could use.” So there’s an interesting balance to keep. Jake compared it to needing a variety of snack food at a ball stadium (peanuts, popcorn, drinks) to keep people engaged and interested, and get the most out of the audience. It’s like that with advertising.
The most important thing? Asking the question: “WHERE DID YOU HEAR ABOUT US?” Ask it every time, to every lead. That way, you’ll be able to optimize your own marketing program over the years, and get better and better. I was certainly impressed with how scientific Jake had been collecting his data over the years, to continually optimize Grants International’s marketing program. The business model they have is not an easy one (whew – a model with no repeat business is not for the faint of heart!) and certainly treating marketing as a top priority, and taking a scientific approach, has a great deal to do with their success!
THANKS Jeff and Jake, and the Calgary Marketing Association, for this great presentation! Fantastic work!