Measurement Australian Direct Marketing Association Session Plan - - PowerPoint PPT Presentation

Australian Direct Marketing Association

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

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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

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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?

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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.

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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

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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)

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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.

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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

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MeasurementCategories

“Hard” Measures “Soft” Measures Short-term Measures Long-term Measures Campaign R.O.I Cost per sale Average order value Response rate Conversion rate Customer acquisition rate Long Term ROI (LTV) Share of customer Customer retention rate Growth rate Customer satisfaction Market share Market penetration Brand awareness Promotional recall Customer perception

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Tracking the customerjourney

Identified prospects Enquirers First-time buyers Repeat buyers Advocates

Need to:

• Identify key milestones (taps)
• Measure the flow
• Measure the leakage

“Loyal” customers

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Example – Office Equipment – Acquisition

Awareness Enquiry consideration Purchase

• Reach
• Impressions
• Direct contacts
• Website visits
• Responses
• Phone calls
• Click-throughs
• Registrations
• Repeat website

visits

• repeat phone

calls

• online shoppers
• quotations
• Orders by

channel

• orders by

segment

• order values
• products

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Example – Office Equipment – Retention

Delivery Post-sales Cross-purchase Additionalpurchase

• Delivery

timeframes

• Delivery issues
• Satisfaction levels
• key data gathered
• Futurepurchases

identified

• new enquiryvolumes, costs and

conversion rates

• new order volumes costs and

conversion rates

• new order values & products bought
• share of customer

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Measuringcampaigns

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Response rates

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?

Marketing contacts Marketing

• utcomes

Response rate = Outcomes / Contacts

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Response rates

Which contacts? Which outcomes? Mail-packs sent Emails sent Emails delivered Calls made Calls answered Impacts Emails opened Clicks to website Orders Enquiries Appointments Applications

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Example: Credit card sale Example: Credit card sale

Nos Mailed Enquiries Applic- ations Approvals Cards issued Cards activated

• How many stages in the sale?
• Which stages do you want to measure?
• What are the ‘key ratios’

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Example: B2B Software Example: B2B Software

Nos mailed Follow Up calls Appoint- ments Quotes Trials Sales

• Is it important to measure

each stage?

• What does it tell us?

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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

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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

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Financialmetrics

Sales, costs, margins & profits Return on Investment Average order value Cost per order

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Sales, costs, margins & profit

Cost of production and / or Cost of service provision Cost of distribution Cost of marketing Profit Margin Sales revenue

Anatomy of a sale

Sometimes Included in Marketing cost Sometimes in Production cost

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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

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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 = __________ ?

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Frequentlyused averages

Averages: Revenue per order = Total sales revenue/No. of orders Profit per order = Total profit/No. of orders Marketing Cost per order = Marketing cost/No. of orders Variations: Revenue per 1000 mailed or contacted Profit per 1000 mailed or contacted Marketing Cost per 1000 mailed or contacted

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Averages

Example: Number of mailings = 20,000 Response rate (orders) = 3.2% Total Sales Revenue = $210,000 Marketing costs = $40,000 Total costs (incl. marketing) = $170,000 Calculate: Number of orders ______________ Marketing cost per order ______________ Sales revenue per order ______________ Profit per order ______________ Sales revenue per 1000 contacts ______________ Profit per 1000 contacts ______________ ROI (profit/marketing cost) ______________

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Test comparison – Which one won?

Test 1 Test 2 Quantity Marketed 20,000 20,000 Orders 550 650 Response Rate 2.75% 3.25% Sales revenue $46,750 $55,250 Average Revenue $85 $85 Costs $21,500 $30,500 Profit $25,250 $24,750 Cost/Order $39 $47 Sales revenue/1000 $2,338 $2,763 Cost/1000 $1,075 $1,525 Profit/1000 $1,263 $1,238

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DRTV/Print

Reach 50,000 Frequency x10 Impressions ______ Response Rate 0.30% Number of Orders ______ Sales Revenue $127,500 Average Revenue/order ______ Total Costs $82,500 Profit ______ Profit per order ______ Sales revenue per 1000 contacted ______ Profit per 1000 contacted ______

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Test comparison – which one won?

Mag 1 Mag 2 Impressions 100,000 75,000 Response Rate 0.40% 0.40% Orders ______ _____ Sales revenue $36,000 $27,000 Average revenue/order ______ _____ Total Costs $24,000 $17,000 Profit ______ _____ Profit per order ______ _____ Sales revenue/1000 contacted ______ _____ Profit /1000 contacted ______ _____

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Telemarketing – typical metrics

Principles are the same: 1. Define contacts - Define outcomes - Calculate ratios 2. Use financial metrics to assess and compare performance Outcomes vary according to purpose of the call, examples: – Contacts qualified – Leads generated – Appointments made – Applications completed – Surveys completed – Orders generated Also important: – Time on the call –

• Nos. of call attempts

– Refusals

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Email metrics

Main variables for ratio calculation: – Emails sent – Bounce-backs (Hard & soft) – Unsubscribes – Emails delivered (sent minus bounced) – Emails opened – Total number of click-throughs – Unique click throughs – Emails forwarded

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Email metrics

Other useful metrics: – Time email sent vs opened (which day & time of day) – How long before email opened – Which link on the email was clicked Then, what happened on the site?: – Time spent on website – Pages viewed – Repeat visits per site – Nos. of registrations (e.g. sign-up for newsletter) – Nos. of downloads (by type of download) – Nos. of orders

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Onsite Tracking

• Site conversion rates by source
• Nos of Visitors & sessions
• How people are using the site
• Time spent on site
• Repeat visits:

– Percentage of repeat visitors – Time between repeat visits

• Geographic activity
• Search engine activity

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Onsite Metrics

Low number of visitors Not reaching wide enough audience Need to review search marketing &

• ther acquisition channels

Low Conversion rates Site advertising doesn’t match site content Site not easy to use Not engaging enough Offer not strong enough Usage of site Number of visits made before purchase Most popular/least popular pages Top entry & exit points Top pathways Metric What is it telling you?