Nov 222010
 
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just because you can doesn't mean you should

“A man’s got to know his limitations.”

The famous Clint Eastwood line from “Dirty Harry” sums it up. I’m  a capable businessman and marketer, but don’t let me anywhere near the creative team when they’re trying to name a product. Oh I can define the product, describe the market for it, detail the buying process and funnel metrics for it, create a promotion or campaign to drive leads for it, etc…. But naming things is not really my forte.

One thing I do know about product names, however, is that the wrong name can be an expensive drain on your marketing budget. To illustrate this point, let’s consider a seasonal example: turducken. For those who – like me until a couple of years ago, or my wife until this morning – have no idea what turducken is, here is the Wikipedia definition:

“A turducken is a dish consisting of a de-boned chicken stuffed into a de-boned duck, which itself is stuffed into a de-boned turkey. The word turducken is a portmanteau of turkey, duck, and chicken or hen.”

I haven’t seen any research to back up this claim, but I’d be willing to bet that (far) less than 50% of the U.S. population would be able to accurately define turducken without first asking a friend or looking it up on the Web. And among those consumers curious enough to learn the meaning, a subset would first have to stop giggling at a word that seems to include the concepts of “turd” and “uck.”

None of this is a problem for the individual consumer confronted with this word. His life will resume momentarily, with or without the addition of turducken to his vocabulary, or his oven.

But let’s consider briefly the hypothetical case of a marketer tasked with creating demand for this product. She has a product that has the potential to serve a large and horizontal market (i.e., people who eat gourmet poultry dishes). The product is well-liked among the group of consumers who know what it is. And there are probably some historical trends and benchmarks that can help her direct marketing budget and resources.

That’s all well and good, but what if the hypothetical CEO of Turducken Incorporated — to whom our hypothetical marketer reports — throws down a gauntlet and says she wants to see turducken sales double this year, but only increases the marketing budget by, say, 25%. What should our marketer do? Clearly, small improvement on the organic growth rate will not get the job done. So trying to hit the sales goal by targeting the “turducken-aware” segment is likely to fail. This is a “Blue Ocean” marketing challenge — our marketer will have to find and/or create a whole new market of consumers who are willing to give turducken a try.

This brings us back to bad product names. Before we get excited about something, we usually have to know what the heck it is. Our marketer is quickly going to blow through her budget trying to explain her product to the uninitiated. A too-clever-by-half product name only confuses the prospect and delays the buying process. Two time-honored sales axioms apply here: (a) “a confused customer usually says no” and (b) “time kills deals.” A consumer who is uninterested in learning the definition of turducken is unlikely to buy it (even if he might otherwise enjoy the dish). And any excess time spent explaining a quirky word like turducken is time NOT spent selling it.

Since our marketer doesn’t have a large budget to fund missionary marketing of turducken, she should use simple, descriptive names — perhaps “three bird roast” or “turkey, duck, and chicken roast” — to help quickly define it for new buyers. Keeping the name simple will let her to direct those scarce dollars and resources to more targeted and measurable demand generation campaigns and programs.

Dec 202009
 
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A quick shoutout to thank Metalworking Marketer for featuring my post on “Three metrics that are more useful than Cost per Lead” in their December 2009 newsletter. I saw a nice bump in traffic as a result of this (must be a lot of metalworkers out there working on their marketing), and so thanks are in order!

http://www.gardnerweb.com/marketer/issues/1209.html

Oct 062009
 
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Chris Jablonski, who works with me in Tippit Consulting, has scored his second guest post in less than a month on Craig Rosenberg’s famous Funnelholic blog.

That’s Jablonski 2, Scearce 0 for anyone (other than me) who might be keeping score. 😉

I can get over it though, because Chris writes great stuff. And the topic is important.

Remarkable content is key to successful marketing. It’s easy to gloss over it in the highly mechanized world of Marketing 2.0, where metrics seem to matter more than anything else. But the same rules apply now as did 5, 10, or 15 years ago. Any direct marketing guru will tell you that the three legs of the DM stool are:

1. List / audience
2. Offer
3. CREATIVE

In my opinion, List and Offer have become easier to optimize because metrics quickly allow us to see what works and what doesn’t. Content (creative) effectiveness can also be measured but not quite as easily or quickly. And the bigger issue is that content is often more difficult to swap in and out of a campaign than its siblings, List and Offer.

So Content matters! And Chris has written a nice checklist to help make your content remarkable on the first volley.

Take a look at Chris’ checklist and his guest post on Funnelholic.

Here’s the question to you: has he missed anything? What else makes content remarkable?

Sep 232009
 
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In one important way, the marketing department is a lot like college. How so?  Well, because, like college (as my mom once told me):  “it’s an expensive place to play.”B2B marketers (my background) are typically expected to invest an amount between 3 and 7 percent of revenues into marketing programs. Most of this budget is intended to drive new customer acquisition. Like most marketers, I take this responsibility seriously. And I have found through my consulting work that most B2B marketers share this sense of stewardship, and build frameworks to track and manage their portfolio of marketing investments.I have observed that a lot of companies have embraced Cost per Lead as a key metric in the management of their marketing portfolio. This measure can be useful in comparing marketing programs (and/or vendors) against each other provided that the definition of a “lead” can be applied equally to all lead sources.

But there’s the rub.

Having a healthy, diverse portfolio of marketing tactics means attracting buyers from different places, with different offers, and at different stages of the buying process. The fact that everyone filled out the same registration form on your web site (or that a vendor delivered a contact to you matching your lead capture requirements), does not account for this variety.

And so a portfolio management framework that is overly biased to driving down the cost per lead metric can work against you. To illustrate, consider this example:

Metric #1: Pipeline Dollars per Dollar of Investment

pipeline dollars per dollar of investment

pipeline dollars per dollar of investment

This comparison showcases why managing excessively to cost per lead can limit marketers’ ability to help sales build its pipeline. In this example, the leads from LeadSource B are a better value for the marketing investment. The leads convert at a higher rate, and the average deal size is also higher ($2500 vs. $1800). LeadSource B delivers a population of buyers that is further along in their buying process and has a larger budget, on average, than their counterparts from LeadSource A.

<soapbox> BTW, the word investment is used deliberately.  The antiquated term “marketing spend” is not only an example of poor message management (who wants to fund “spend” in this climate?) but it also communicates that the dollars are only moving in one direction: out. Modern marketing is not about spending. It’s about investing and managing investments to predictable returns. </soapbox>

Metric #2: The Rotting Lead Rate

Part of managing better returns on your investment in leads is making sure the lead management system you are feeding creates minimal to no waste. In nearly every B2B sales environment, the old axiom, “time kills deals” applies. By extension, it is also true that time kills leads.

Many complex processes are described colorfully to the uninitiated as “how the sausage is made.”  Whether we’re talking about legislation, product development, or revenue generation, it’s a useful analogy. Applying it to marketing and sales, we can ask the question: how long should our sausage ingredients (leads) be allowed to sit on the factory loading dock before moving down the assembly line? At what point do our ingredients (leads) begin to become unusable?

I call this the “rotting lead” concept. The first time I used that term was in a high-velocity, inbound sales environment. In that environment, a rotting lead was any lead delivered to a sales person that did not have an activity recorded against it (call, voice mail, email) within the first 24 hours after delivery. The “rotting lead” rate is simply the percentage of leads that are past their expiration date (e.g. 24 hours, 3 days, 1 week from lead hand-off) at any given time.

When I first used the term “rotting leads” in a conversation with my counterpart in sales management, I was concerned about introducing unnecessary friction into the marketing and sales relationship. To my delight and surprise, my colleague not only liked the concept, but liked the phrasing, and wanted to see real-time reports in our CRM to help him manage “lead rot” out of his process. This was a great learning moment for me.

Metric #3: Leads (and/or Opportunities) In Process per Sales Rep

Continuing with our sausage factory metaphor, let’s consider a scenario where one or more of the assembly lines becomes overloaded with ingredients (leads). One of several things will tend to happen:

A. the line stops to process the ingredients it already has on the conveyor belt.

B. the ingredients are handled too quickly resulting in defects in the sausage (yuck!)

C. some of the ingredients are not handled at all because they don’t fit on the crowded conveyor belt, so they fall on the floor (double yuck!)

To the factory foreman (Head of Sales), the net result is sub-optimal sausage production due to waste and inefficiency.  The foreman has a vested interest in making sure that his/her factory is “load balanced” or “resource leveled.” The marketer shares that interest because an inefficient sausage (revenue) factory drives down marketing ROI.

Summary

When compared to Cost per Lead, these three metrics are more useful diagnostics of marketing investment performance.  And, more importantly, these metrics measure marketing AND sales as a single unit.

Companies that measure (and manage to) Pipeline per Dollar of Investment, the Rotting Lead Rate, and Leads/Opportunities In Process Per Sales Rep create the right incentives to drive lead management transparency, marketing and sales productivity, and predictable revenue growth.