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CRM

How do you determine the ROI on your marketing and sales investments?

The standard formula is simple: divide the return, less investment, by the investment. A marketing campaign costs $1000, and reaches out to 1000 prospects. Five per cent of these respond, generating $1000 profit, for an ROI of zero: (1000-1000)/1000.  If the profit is $1500, then ROI is 50 per cent, if profit is $500, then the ROI is negative.

Unfortunately, this calculation makes a fundamental error: what about the other 95 per cent that don’t respond? What can be done about them?

Traditional marketing suggests one solution: work to improve the conversion rate. An increase from five to six per cent flows directly to the bottom line. Yet making this change (which is important), only changes the question to what about the other 94 per cent? 

So what about this group? Why did they choose not to transact?  Three answers:

  1. They didn’t have a strong enough relationship with you yet.
  2. They didn’t know enough about your service or product.
  3. They weren’t ready to purchase at the precise time that you were ready to sell.

The real marketing question is about the 95%: what investment is your organization making to resolve these three questions? (The answer for many, is not much.)  Yet a simple marketing automation concept – drip marketing – can  change the equation, and close the gap.

Here’s how it works:

  1. Identify all of the “funnel” entry points. Examples include web lead generation forms, trade shows, networking meetings, or even telemarketing campaigns.  Any source where a prospective client identifies as having an interest.
  2. For each source, identify 12 no-cost, high-value items that both educate and help solve critical problems. These can include white papers, infographics, videos, webinars, and books (real and electronic).
  3. Every 60 days, send one of these items to the prospect. This helps educate them, improves their trust in your organization, and most importantly, keeps your name in front of them. When they are ready to buy, they’ll think of you first. (Of course, doing this assumes that you have permission to reach out – if you don’t, the unsolicited interruption may have the opposite effect.)
Once a drip marketing plan is in place, the ROI calculation can be made for the other 95 per cent – the only difference being that the time horizon is longer – sometimes several years.
This week’s action plan: How are you handling the other 95 per cent? This week, look at your marketing investment, and answer one question: is the investment split between marketing to the 5 vs 95 appropriate? If not, do something about it.
Marketing insight: Drip marketing yields an important additional benefit, even before the prospect commits to a purchase themselves: they’ll often refer you to others.

Looking for more?

  • If you are interested in observing how I use drip marketing, fill out the form below. Each month or so, I will send out a value-added white paper or other resources. As you receive them, notice that there is never ANY sales pitch or “marketing” brochure.

 

  • If you are interested in looking at the CRM system I use for marketing automation, click here.

Note: The Make It Happen Tipsheet is also available by email. Go to www.RandallCraig.com to register.

Randall Craig

PS:  My firm now publishes a no-spam high-value monthly newsletter, the one-o-eight.  It’s filled with more content and news you can use.  To subscribe, fill in the form here.

@RandallCraig (follow me)
www.RandallCraig.com

www.108ideaspace
.com
www.ProfessionallySpeakingTV.com

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Viewpoint: Email, R.I.P.

by RandallCraig on July 12, 2012

Filed in: Blog, Communication, CRM, Make It Happen Tipsheet, Viewpoint

Tagged as: , ,

Picture this scene from a few decades ago: you’re working in your office, and your assistant bursts in, with an important announcement:  You’ve received… a FAX!  The correspondence was critically important – and you were too.

Then a few years later, the FAX was replaced by AOL’s chirpy voice, announcing to all, “You’ve got mail!” 

Today, email is so ubiquitous that the novelty has completely worn off.  In fact, if you are like most people who are flooded with junk mail, email has completely overstayed its welcome.  If your organization uses email to market or provide customer service, you probably are beginning to question the effectiveness of the channel. And will it also go the way of the FAX, Telex machine, or the horse-and-buggy? 

Consider this the eulogy for traditional email: in five years it will no longer exist.  Consider:

  • Internet Service Providers conservatively estimate that 77% of all email traffic is spam.  The cost of this filtering is huge, and not economically sustainable.  
  • The high level of filtering – by ISPs, Companies, and users – means that many “good” emails never reach their destination. 
  • Regular email is paid for by the receiver, which means there is no economic disincentive to send mammoth amounts of email.
  • Regular email is easily spoofed: hackers can easily change the “from” details behind the scenes, causing the recipient to think that the mail was actually from someone else. 
  • There is no way to prove that the sender actually sent the email (non-repudiation) or that the receiver actually received it (proof of delivery.)
  • Regular mail is insecure: unless you resort to heroic measures, there is no guarantee that the email wasn’t copied or tampered with en route.  For this reason, email-based ecommerce by companies has been stunted, but millions of regular people unknowingly send their passwords and credit cards via email..
  • The rise of the Social Networks means that some conversations now happen as posts and comments.
  • Many of the Social Networks (Facebook and LinkedIn prime amongst them) have their own “walled garden” internal email systems, where authentication, non-repudiation, terms of service and security have weaned many emails away from the public email system.

What might email look like in a five years?  Or rather, what must happen for email to survive?

The cost of email must transfer from the receiver to the sender.  As it will be unlikely that this will happen everywhere, look for the move to a two-tier email system.  The first tier would be a trusted, authenticated, non-reputiable, sender-pay system, with practically no spam and an exceptionally high open rate; businesses would deliver invoices, account status, and other secure correspondence.  And users would be able to see their email with complete formatting, pictures, forms, and some built-in functionality.  The second tier would be a shadow of the current system, but relegated to an even lower priority for ISPs (and consumers), as the economic justification for email filtering (ISPs) or wading through the spam (consumers) would no longer would exist.

For traditional marketers, a forced march away from the mighty email list might seem scary, but all is not lost.

Remember that the goal of email is to improve your the relationship.  Begin looking for alternative modes of communication: Twitter, Facebook, LinkedIn, YouTube, and the many other social networks.  Ramp up the relevance of your blog, then encourage people to read (and comment on) it.  Finally, remember that developing relationships is best not done in bulk: a stronger personal connection is only possible on the phone and in person.  (And if this doesn’t work, you can always try sending a FAX… if you can find one.)

This week’s action plan:  What does it take for you to cut through the clutter and be heard?  And what are you doing to reach beyond traditional email, just in case?  Interestingly, the answer to these questions is the same: this week, develop your relationships across several channels, so that each channel reinforces the other – and protects you in case email truly becomes unusable.

Note: The Make It Happen Tipsheet is also available by email. Go to www.RandallCraig.com to register.

Randall Craig

@RandallCraig (follow me)
www.RandallCraig.com

www.108ideaspace.com
www.ProfessionallySpeakingTV.com

 

Social Effectiveness: Not about me

by RandallCraig July 5, 2012

Maybe you also have seen this TV commercial. After a service encounter, an attractive business woman (an actress, no doubt) faces the camera, smiles and says, “It’s all about me.” If someone said this type of comment to you, what would you think? If everyone had this type of attitude, we wouldn’t have volunteers, mentors, [...]

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Your Daily Social Media Routine

by RandallCraig June 14, 2012

How do you spend the first 20 minutes at the office each day? If you were in the 1970′s, you would spend the time reading the newspaper, then organizing your inbox (the box on your desk), and finally looking at your calendar before “starting” your day. In the 1980′s, you would be doing the same, [...]

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Three Marketing Models

by RandallCraig June 6, 2012

Model One: One of the most powerful real-world networking techniques is called “give-to-get”. You  meet someone, find out what they’re interested in, and then find a way to give it to them. If you do this periodically, eventually they will return the favor. Model Two: To compete, an organization must do so on Price, Expertise, [...]

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Social Choice: Ignore, Listen, Join or Host

by RandallCraig May 31, 2012

Think back to when you last bought a book – did you check the reviews on Amazon? When you last booked a hotel – did you check the hotel rankings?  There is an incredible conversation happening on the social web, and for the first time in history, there is transparency: these conversations are available.  The [...]

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Social Customer Service Strategy

by RandallCraig April 26, 2012

Ever feel slighted, ignored, disenfranchised, “sold to”, taken for granted, or just plain commoditized? For many prospects, these feelings are what prevent a sale from taking place. They prevent repeat sales, prevent referrals, and encourage negative word-of-mouth. Clearly, great customer service – supported by great training and great management – are fundamental, but how can [...]

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Viewpoint: Is the Cloud for the Birds?

by Randall September 1, 2011

If you read the business or technology press, you’ve probably heard about “the cloud”.  And if you believe the ad copy, just about any problem can be solved merely by “putting it on the cloud”.  Can this really be true?  Is the hype even close to reality?  And what is this cloud, really? The cloud [...]

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Social Media Geography

by Randall May 24, 2011

At one time, were you riding high with a ton of “Friends”?   Then you realized that many of your Friends were there in name, but had zero engagement?  Or you maintain a presence on one platform (MySpace?), and realize that it no longer meets your needs?  Or, you started a Facebook Group and now [...]

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