The Death Of CPM , The Death Of The Retail Store , The Death of Affiliate Marketing , The Death of the Open Web , The Death of Video Rental Stores , The Death of the Landline , The Death of the Book , The Death of the Desktop , The Death of Newspapers , The Death of the Press Release , The Death of Advertising , The Death of the Pageview

What’s going on here?  More importantly what can we learn from it? After studying these articles I have come to the conclusion that no, business isn’t dying…but it is evolving.  We’re evolving; as consumers and as marketers.

As consumers, we want to be marketed to as the individuals we are. “Technology is fueling the consumer’s desire for personalization.1″  As marketers, we are seeing that treating people as ‘the masses’ is no longer appropriate.  It’s no longer about measuring our audience size but about how relevant we are to our audience1. We must become more sophisticated in our targeting efforts.  One-to-one marketing is the key now, whether we are talking to other businesses or to consumers.

In One-to-One Marketing: The true promise of Dynamic Offer-Content Customization it states: “Customizing offers based on customer segments involves a sequence of steps, beginning with identification of meaningful customer segments. Any method of customer-specific message optimization requires knowing ‘who’ your customers are, beyond just their names and email addresses. You must also have some insight into what they ‘want,’ how they think, the words, terms and images that attract and inspire them (as well as those that repel them), and ‘how’ they think.”

There are two ways I know of to develop customer segments.  One involves analyzing the people who come to your website, or who you want to come to your website, and developing it around their needs.  In Online Customer Segmentation Made Easy it says “the easiest approach is to ask the five basic questions that all news reporters know:  Who, What, Where, Why and How. By taking time to answer these five questions up front, you will be able to make the most effective use of limited resources, as you build a website that meets the needs and wants of all your customers.”  While creating segments based on online behavior may yield actionable insights for your website, it also doesn’t truly represent your customer base if you sell in other ways, such as direct and retail.

In that case, there is another method that involves surveying your customers.  The company I work with, C.A. Walker, does this type of segmentation analysis.  We design a questionnaire that allows us to group customers as similar or dissimilar based on their attitudes, behaviors and demographics, yielding those segments that are most valuable to target.  Segmentations are a valuable look into customer groups’ beliefs,  lifestyles and habits.

Another point I picked up from these articles is to not be afraid to launch evolutionary products and services, even if a larger company could launch a competitive product/service with greater advantages.  Far too often “industry leaders are usually so focused on maintaining existing profit centers and business practices…they ignore the threat.”4

Lastly, measures of marketing ROI are evolving also.  In The Death of the Pageview it makes a great point: “The most important thing is that you are gathering actionable data. By this I mean that you have to be able to use the information you gather to make a decision and take action.  If you’re not going to use it to make a decision, it’s a waste of time to even look at it.” Consolidating what these articles are saying, the important ROI metrics to gather and take action on are:

• Cost Per Customer (CPC)1
• Customer Lifetime Value (LTV)1 (links to my prior post on how to calculate and increase Lifetime Value)
• Value delivered — e.g. customers or inquiries1,  less stress2, saves time2, original products3
• Average Revenue Per User (ARPU)5

In summary, it is my belief that businesses don’t truly die; they simply evolve and may become a stepping stone into something more relevant to people’s lives.  Marketers must become savvier in order to evolve with these trends and must monitor only those marketing metrics that can assist to improve conversion rates and gain a deeper understanding of  customer behavior.

Sources:

1 The Death Of CPM

2 The Death Of The Retail Store

3 The Death of Affiliate Marketing

4 The Death of Video Rental Stores

5 The Death of the Pageview

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You may have heard of A/B or A/B/n Testing (“n” refers to the number of “cells” or groups of people who will see the landing page).  In this type of test, you create minimally two differing versions of your landing pages “A” versus “B” (and “C,” “D,” and so on) to see which outperforms.  You then serve the landing pages on an equal basis to the cells, and use cookies to make sure someone sees the same page again if returning.  Typically those who use A/B tests are testing wildly different landing pages, including number of images, copy and paths.

Multivariate testing involves testing the same landing page but with different elements on the page.  Essentially, you are swapping out images, buttons and text when you are certain you’ve chosen the best design layout from your A/B tests.

It is important to consider statistical significance when testing landing pages.  You want to make sure that you have served the landing page to a large enough sample size in each cell before inferring any conclusions. The company I work with, C.A. Walker, provides a sample size calculator on its site that is helpful for this.  First, you enter the confidence level – typically 90% or 95%  – then enter your maximum allowable error – typically 5% or 10%.  If you’re not sure which to use, go with a 95% confidence and 5% error level.

Population size is a bit more tricky.  You can try searching online for a population size, e.g. “population size of [target] in [your city or nation],” and see what research surfaces that you can use.  If you are in the U.S., you can try finding your population size on the Census Bureau’s Population Estimates page.  For example, if I want to geotarget an ad to Los Angeles women, I can see from the Age, sex, race, and Hispanic origin estimates under Population Estimates that there are 9.8 million people living in LA and 4.9 million of them are female.  Plugging this into the  calculator, the sample size is 384.  Therefore, I would need to test each landing page on a minimum of 384 women in order to infer conclusions.

Another way to look at this is using Marketo’s Landing Page Version Calculator, which allows you to enter the number of expected conversions per day and your confidence level to get back either the number of test versions you can have or the length of the test you need to allow.  If I enter 100 conversions per day at a 95% confidence level and 30 days for the test, it says I can run 13 versions of a landing page to generate statistically valid results.

Google’s Website Optimizer is a free tool you can use for landing page testing.  To do so, you setup a “new experiment,” choose either A/B or multivariate testing, create and publish different versions of your test page at unique URLs, and then also create and publish a “thank you” page that users reach after they’ve completed a successful conversion.  You then add tags to your pages so Google can track.  From Google’s Adding Tags help page, “If you’re running a multivariate experiment, you’ll need to add tags to both your test page and your conversion page. If you’re running an A/B experiment, you’ll need to add tags to your original page, all test page variations, and your conversion page. You can find detailed instructions for adding all the tags in our Installation Guides for multivariate experiments and A/B experiments, as well as information about how to deal with tags in relation to shared headers and existing HTML code.”  Website Optimizer will then provide you with a report on your tests to see how well each combination or variation is performing.

If the idea of creating multiple landing pages and managing tags sounds about as much fun as a root canal, then consider your paid options.  I recently demo’d ion interactive’s LiveBall product, which does much of the work for you and is fully hosted on their site.  Their pricing starts at $1,295 a month for unlimited number of landing pages and 10,000 visitors per month, and goes down if you get more traffic than that.  For that price, they start you off with 12 landing pages complete with forms and images relevant to your industry; all you have to do is add copy.  They also include 15 templates that you can use to change the look-and-feel of your pages on the fly. The templates are designed around 1 theme for each brand, for each season, or for each client (if doing this for multiple clients) and include 1 stock image gallery for each business (or you can use your own images).

If you want them to design your landing pages for you, they offer that service for an extra monthly fee or on an ad-hoc basis.  They say some of their clients opt for the extra service for the first several months in order to build up their library and then do it themselves from there.

When you log in to their service as a client, the first thing you see is a dashboard to monitor real-time results of your landing page effectiveness.  Your landing pages are represented by bubbles on a grid:  the larger the bubble the more traffic you’ve received for that particular landing page, and the higher on the grid the better the conversion rate.  In addition, the bubble are “live” meaning you can click on them for greater detail on that campaign.

To use the LiveBall system, you first create a “portfolio,” then “campaign,” then add a “path” to the campaign that is either new – chosen from the optional “frameworks” provided – or you can choose to copy a path over from another portfolio or campaign.  A “path” is simply the series of pages that a person sees during the conversion process, which can be as simple as Page A and then the “thank you” page, or you can add intermediate pages that tries to upsell other products. I’m not sure how exactly, but was told their system also segments users to deliver robust landing paths/experiences. 

To add a page, you select from the pre-determined master pages provided, change out the nonsense text and remove areas you don’t want to use.  In addition, 3 forms are provided for you but are easily editable.

The last step is selecting the traffic source, e.g. Google, and it creates a unique URL for each traffic source for you.  Here you can also choose to “auto-optimize” your landing pages, meaning that the system will determine when the pages reach statistical significance and pull poor-performing landing pages for you.  You can also set it up to send people to another page when statistical significance is reached for that particular traffic source.

They also provide for you “advanced rules” (conditional logic) on the page or content level – 20 conditions, 15 actions.  They are useful for geotargeting – substituting content on a page based on the region coming from – or previous action,  such as adding the user’s specific search query into the page text or sending them to another page if they didn’t convert the first time they visited.

For reporting, you can view how a campaign is performing on a portfolio level, go into an individual campaign, or into individual paths.  The dashboard is dynamic, meaning you can easily switch from viewing your results as a tag table, a respondent funnel, a pie chart, or other options.  You can see other views there as well, such as which keywords are working best for you.

So that’s my primer on how to test landing pages and what some of your free versus paid options are.  Some other resources I recommend on this topic are:

• 7 Best Tips to Create Landing Pages for PPC Campaigns
• The Cost of Landing Page Optimization
• Landing Page Testing: How to test and what to test
• Autonomy’s Best Practices for Optimizing Landing Page Performance, who have their own landing page solution
• SiteSpect’s Best Practices for Site Optimization, who have their own landing pages solution

Happy ROI hunting!

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First, how they are the same (numbers correspond to sources at bottom):

• Based on their search habits alone, B2B consumers are certainly behaving similar to B2C consumers. 83% of business consumers reported “always” beginning their purchasing process through Google search. This was followed by 26% who reported they always went to the technology vendor’s Web site.  “Discussion forums, online communities, or social networks sites,” came in second with 23% of respondents indicating that these were “very important” sources in influencing their purchase decisions, above other corporate assets such as Webinars (18%) and email newsletters (16%).1
• Intrusive marketing effectiveness is diminishing. The goal of marketing is to be found when consumers are looking, not intrude when they aren’t.1
• Traditional mass marketing with a B2B audience, like in B2C, “absolutely doesn’t pay off.”1
• B2B marketing will be catching up to the sophistication of B2C marketing with the following developments: Marketing automation software that accounts for the multiple influencers and decision makers; Multi-channel interactions; Market resource management, which incorporates the planning, budgeting, and marketing allocation (e.g., how much goes to PPC vs. print; campaigns vs. seminars); and Real-time data mining to enable personalized offers.1
• Many of the same social media principles we preach for B2C companies also apply to B2B.2
• Both B2C and B2B companies can leverage traditional media to support social media marketing activities.3
• Both B2C and B2B companies can be more interesting when they focus away from the product [or service] and toward how customers use it. On the social web it is how the product [or service] makes customers great that it is the defining success factor.3

And now, the differences:

• B2B customer relationships are often fewer and stronger than B2C relationships. B2C companies can have purely digital relationships with their customers and often have to as a result of the pure volume of customers. B2B companies use social media tools as a complement and not a replacement for face-to-face interactions.2
• B2C customers often aren’t competitors, however, the clients of B2B companies are often in competition with each other. Two local ice creams shops may buy their plastic spoons from the same supplier.2
• True, the B2B buyer has emotions just like the average consumer. However, she is still an employee of her company and must take into account her company’s needs when making a decision. B2B sales prospects have two sets of buying needs that don’t always dovetail with one another. You must address both if you are to maximize your chances to sell big-ticket B2B products and services. 4
• B2B, unlike B2C, can result in your product or service being perceived as an integral part of the customer’s business process, i.e. when “you” and “they” become “us.” When the relationship supports a mutually beneficial long term competitive advantage in the form of accelerated growth rates, operating economies and increased market share. Here, the client relationship emerges as a strategic partnership, an actual alliance. This is a far cry from the predictable transactional steps of a commodity sales process.5
• B2B buyers use heuristics in their decision making. Heuristics guide which options and information get considered and which get rejected, and they help us simplify complex decisions to their relevant core. All this is good, in fact, essential. It’s just not rational. The B2B world has the added complexity of not just one irrational decision maker, but many.6
• B2B buying decisions are usually driven by one emotion: fear. As a result, B2B buying is all about minimizing fear by minimizing risk. There is organizational risk, which can often be dealt with rationally, and personal risk, which is usually unstated and hidden from the rational process. Yet personal risk is a huge factor in B2B buying.6

Lastly, where B2C gets it right and B2B tends not to, is how it addresses its marketing. B2C companies live in a world where marketing is a strategic decision and marketers are involved in strategic processes.

“However, these are areas where many B2B marketers are traditionally weak: market-back product-development process, brand and reputation management, market-driven pricing. The implications for B2B marketers are straightforward: successfully managing these three core capabilities will increase the effectiveness of the marketing team and grow business overall.”7

In conclusion, in many ways B2B2C is a reality and there are many things that we can learn from each other, but in the end there are fundamental differences that remain.

1destinationCRM:  What B2B Marketers Can Learn from B2C

2Search Engine Watch: Social Media for B2B

3Social Media B2B: B2B Lessons From B2C Social Media Marketing Strategies

4B2B Sales & Marketing: Writing Emotional B2B Sales Copy

5B2B Sales & Marketing: Eight Key Steps to Building B2B Major Account Client Alliances

6Marketo: Beyond the B2B Buying Funnel: Exciting New Research about How Companies Make Complex Purchases

7MediaPost:  Study: B2B Needs to Learn From B2C

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So what is channel development?  Channel development is about creating partnerships upline and downline that bring greater influence, strength and sales to those participating.  Channel marketing is creating propositions to potential partners, marketing to them, and then motivating/incentivizing them.  Channel Marketing Partners are typically vendors, manufacturers, distributors, resellers and retailers, working in cooperation.  They start with a deep understanding of their specific target market. They identify the customer’s business issues and develop an approach to addressing those issues, cooperatively building programs from the ground up. They then assemble the necessary pieces and package them into a solution. The goal is to get customers to buy into the total vision of the Channel Partners.

Designing a system that can manage the complex relationships in channels is no small feat.   In 2004,  CRM Today said that most PRM (partner relationship management) tools out there were like “putting wings on a bus.”  They tried to re-purpose the CRM and it simply did not work.   They share why:

“CRM is fundamentally designed to manage direct sales engagements between a sales representative and a buyer. This mode revolves around collecting and sharing data throughout the customer lifecycle.  PRM, on the other hand, is designed to manage a complex ecosystem comprising legally independent partner organizations. This one-to-many model revolves around aligning business processes across the entire value chain, from vendor, to partner, to customer.”

Today, there are a number of PRM options that are much more sophisticated and designed from the ground up to work for channel managers.  And somewhere along the way, PRM became TPM (trade promotion management) and the term “trade funds” became used for co-op marketing.

A 2008 study by the Consumer Goods Technology group finds that “While only 52 percent of companies in 2008 evaluated trade spending, more and more companies are attempting to implement trade promotion management (TPM) applications to improve TPM analysis in 2009.”  The reason that more companies haven’t taken on a TPM application is due to their complexity and cost.

Oh, and did I mention cost?  NewsFactor suggests that “Because trade promotion spending can reach 20% or more of sales, a very minimal percentage of improvement [from a TPM] can justify an entire project without reaching too far.”

They then go on to detail ways to lower the cost:  Roll it out slowly and to those who can benefit most, first. Get sales buy-in and usage early in the process. Use an SaaS.  Build real metrics. Eliminate your desire to build unique processes into the system.  Talk with other companies (i.e. software vendor user groups and references) who have implemented a TPM and learn from them. Don’t wait until it’s too late and you make mistakes.

“Many growing CP manufacturers can quickly get inundated with unexpected deductions or make poor decisions about promotions due to a lack of centralized visibility. Many growing manufacturers start facing challenges associated with managing trade promotions when they reach a dozen or more SKUs, or when they start negotiating with their first national retailer, or when they surpass the $10M mark in sales.”

Here are several offerings by TPM vendors to get you started:

• Purplewire’s ChannelSUITE
• Adesso Solutions’  TradeAdvantage™
  
• The Synetics Group’s TPM
• The MEI TPM
• The SAP TPM
  

The Channel Champion recently attended a TPMA conference (trade promotion marketing association) and found that the key metrics to evaluating channel effectiveness are:

• Budget to spend
• Net incremental sales
• ROI – consumption or shipment based
• ROI – variable and fixed margin
• Incremental spend

Add to that list those NewsFactor recommended:

• Promotion effectiveness
• Lift improvements
• Reductions in stock-outs.

As an aside, the company that I work with, C.A. Walker, can support marketing’s efforts in channel development in the following ways:

• Profile partners to identify new contract opportunities
• Measure partner “brand fit,” awareness, satisfaction, usage
• Test partner communications, incentives and promotions

I look forward to learning more about channel marketing developments and sharing them with you here.

trade promotion management (TPM)

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Having read much about nothing, Twitter’s ROI is the best look I’ve seen about whether or not using Twitter makes sense for your business and has potential for positive marketing ROI.First the bad:

• People go to Twitter instead of through regular customer service channels, but unfortunately most companies aren’t staffing customer service people in those roles.
• Twitter is uniquely both a one-to-one and one-to-many communications channel.  As a company, you communicate with one but they can yell about how unhappy they are to many.
• The movie industry has taken a hit – when they release a stinker people know about it pretty quick, shortening the drop-off period.
• Companies that ARE using Twitter, aren’t doing anything they couldn’t already do with other means of communication.

The positives:

• Part of creating marketing ROI is finding and talking to influential people.  Influential people tend to talk a lot and like to create an audience.  You can find people who like to talk a lot and have a decent audience on Twitter.
• Part of creating marketing ROI is being clever and relationship marketing within small groups of people.  Both its undiscovered uses and  passionate alike-thinking people creates opportunity for those who can figure out how to entertain their audience in the most compelling way.
• Twitter creates marketing ROI for companies who thrive on immediate exchange of information, but it is difficult to measure impact.  Metrics may be: does Twitter help to generate revenues faster, retain a customer, improve relations with a market-influential person, result in more blog discussion or followers, minimize losses from missed deadlines, or increase responses to emergencies.

The article discusses several tactics that companies have used, which could have been achieved through other channels:  Dell selling off marginal equipment, Best Buy providing  access to its catalog, DriversSide informing people about recalls on their vehicle.  None were unable to be done without Twitter, but were re-purposed from other marketing channels.  It then leaves the reader with the thought there may NOT be anything that Twitter can do that another channel can’t, save for a highly selective group of people/companies:

“If you are a Hollywood studio, a major personality or a public relations worker in any big enterprise, you will be using it frequently. But as a truly different tool for building business, I think the jury is still out.”

Personally, I believe that there are things that will be discovered that make Twitter a unique marketing tool for some types of companies…particularly those who can benefit from “now communication.”  I look forward to finding some and blogging about them.

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So how are marketers doing?  I reviewed this morning a press release that caught my interest from Alterian Partners in London Customer Engagement Agencies shaking up the Marketing Industry and, from there, their research study 2008 Annual Industry Survey.  A few interesting key findings from their study:

• Marketers are using multiple applications to run a campaign from creation to execution.
  • 51% are using 3-6 applications
  • 25% are using 7+ applications
  • 13% are using 9 or more applications

• Less than half (47%) of respondents use analytics, and a quarter of those surveyed cite analyzing results as the hardest part of any campaign.

• The application most used when running a campaign was Campaign Management (32%) followed by Email Marketing (23%) and Web Content Management (10%).

Alterian’s solution to this problem, according to their materials, is “analytically-led software” to facilitate the entire online and offline customer engagement process:

“The Customer Engagement Cycle is driven by Customer Engagement Personas. These Personas are the captured data and intelligence of an individual customer which constitute the quantifiable, current and future value of that customer, increasing in accuracy and completeness over time through patterns of engagement, predicted future revenues and loyalty.

A typical engagement cycle would include the delivery of a message to a known or unknown recipient, the capture of the recipient’s reaction and analysis of the collected insights into the individual. Treatments and recommendations would then be applied to the next communication based on the learning that has taken place, and any content that is served up to the individual will be optimized and delivered based on metrics such as channel, frequency, probability or location. If the customer is returning to the website, for example, the website itself will be customized to the individual in terms of the messages delivered – based on their location, time of day and the engagement life cycle stage they are at.”

How their product translates into marketing ROI:

• Integration of the people, processes and applications of marketing.  Start with managing a single channel or use the entire suite of integrated applications.
• For a website, it will analyze number of visits to the site, keywords used to arrive at the site, navigation preferences, etc., look for site trends at an aggregate level and then tie aggregate web activity back to the individual for a custom website view.
• Greater management influence based on fuller customer insights, predictability of future campaigns success, and shared risk/reward models.
• CRM analytics that interact with customer-facing systems: call centers, campaign management systems, and sales force automation tools.
• Topical analysis automatically delivered to management.
• Easily handles ad-hoc analyst questions, reducing data preparation costs and need to increase headcount in order to increase client services.
• Intimate knowledge about the sequence of events to create marketing communication programs.

Although I have not demoed Alterian’s products, they seem worth looking into further as a way to strengthen a company’s relationship marketing program.

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Like a PB&J is not possible without peanut butter, behavioral marketing is not possible without an investment into understanding a company’s customers through segmentation.Segmentation is the foundation of behavioral marketing, but unless you are in the business of market research you may not understand how segments are derived and why the manner in which you derive them is important.

Of course, you can classify using a simple segmentation based on demographics (age, ethnicity, female/male) or by usage (heavy, light), but these rarely yield needed information.  In a true segmentation, people are typically grouped by how alike they are in terms of their behaviors and attitudes towards life or a particular topic.   This type of segmentation analysis is conducted by carefully constructing a questionnaire so that some questions are behavioral in nature and others attitudinal.

Results are then viewed by an experienced researcher, who identifies patterns in the data through the use of “cluster analysis.”  There are  multiple sub-types of cluster analysis (“algorithms”) that can be used to view the data from differing  vantage points, allowing the researcher to see the “stories” in the data.  From there, certain attitudinal questions are identified that yield the strongest differences, which are then used as the basis of behavioral analysis.

The resulting data cuts are then analyzed and clever segment names are created to represent different types of customers who share similar values or lifestyles.  For example, “Facebook Fanatics” or “iPhone Moms.”

Now the trick is…how to translate that customer knowledge into a marketing strategy that captures people’s attention at their interest points – their behaviors and attitudes.

A way that this data can be used is to evaluate which segments are worth pursuing through the creation of indices.  By looking at each group size, their spend levels, and how much the group likes the company/brand, it can be determined, for example, that segments 2, 3 and 5 are best to target.  They are the largest that spend the most and like the company/brand best.  Furthermore, we can look at their wants/needs and what they have in common with each other for marketing messaging.

As an aside, the company that I work with, C.A. Walker Research Solutions, regularly conducts segmentations for its clients, if you need assistance in this area.

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