Mixing the Right Channels

In setting the right frame for this chapter, let's focus on the following list of channels for measurement and optimization—introducing each with why we care about them:

1. Email: As I've said before, email is absolutely the channel of conversion when done well. Additionally, it offers very strong automation capabilities. Very few users will opt-out, complain, or have negative feelings about email when we execute well. It's a generally accepted method of marketing almost worldwide.
2. Direct mail: Although more expensive and complex, direct mail absolutely has its role to play in both large-scale acquisition and ultra-targeted nurture programs. There's also been an interesting rebalancing of attention metrics over the years as fewer companies execute direct. In today's world, a well-placed mailer can be a really good option to drive new-mover utility sign-up or a great way to add an incredibly relevant touch point in the middle of the long-term complex sale. Your message might be one of four in someone's physical mailbox, but one of 200 in their email inbox.
3. SMS: Mobile messaging in general is the most effective way to reach our customers—particularly when they're physically near your location or when they want small chunks of highly relevant information. And because SMS is a universal format that works across all carriers and devices, it enjoys astronomical engagement rates when done well. I'll say it again, I have customers who report SMS open rates of 90 percent!
4. App notifications: If SMS is the king of engagement, then app notifications should be the zenith of relevance. Many of the same location dynamics are in play and should definitely be driving your content strategy. Beyond the notification layer, there's a developing strategy around in-app inboxes that offer an entirely new email-like communication path that's devoid of all the legal and algorithmic pressures of sending simple mail transfer protocol (SMTP) email via an Internet service provider (ISP).
5. Paid media: The tight targeting capabilities of paid media represent the strongest pure acquisition strategy available to most marketers. The fact that we have fully automated the concepts of pricing and user targeting across almost every social network and many banner networks instantly provides smart marketers with a direct line to prospects. The compression of CPM rates, along with the rise in cost-per-click (CPC) and cost-per-acquisition (CPA), have made digital channels even more compelling from a cost perspective.
6. Social: Although we're still early on the topics of measurement and optimization in social media, it's a channel most marketers simply cannot ignore. The best news is you don't necessarily have to completely solve every resource allocation or voice-of-the-brand issue for social to be relevant. Some of the smartest marketers use social as a listening platform first, then as a publishing platform. You need to stake your claim to user names on the platforms most relevant to your business, but think of it as a marathon as opposed to a sprint. Pace yourself, be smart, and act deliberately, but always remember it absolutely is a race—and, therefore, there are winners.

Five Deeper Views

Although every marketer will mix and match the preceding channels to their best use, this chapter isn't going to devolve into the age-old topics of digital versus traditional, earned versus paid media, or how to write a great direct marketing letter.

To truly move the needle in these more competitive and social-powered times, we need to measure and act more deeply. It's not enough to drive a few more percent of clicks on your email campaigns or 10 more coupon redemptions from your bulk mailer. By now, your individual channels should be relatively well optimized, and you should be thinking almost exclusively about how to combine them to orchestrate a better buying experience for your customers.

Toward that end, I'm going to outline five emerging metrics for you to consider when planning your marketing programs. You can think about these as individual attributes you're looking to isolate and market to, but you can also think of them as segments when applied across your entire prospect and customer audiences. Understanding the finest points of these customer journeys will allow you to ideally deploy all the channel tactics we described earlier in this book.

For example, let's say you've got a segment of potentially high-value customers who you have determined are deep considerers based on their actions (for this example, we'll define the term as someone who's visited your site at least three times in the last 30 days and has seen an in-person demo of your software product). In this case, orchestrating an outbound telesales call to gain that last mile of understanding—and to ask for the sale in person—is often a winning strategy.

You could look at each of these “segments” in a very quantified light as well. What percentage of your new leads in a given quarter become repeat purchasers within six months? How successful are you at cultivating deep considerers from new leads within the first year of nurture marketing? Begin tracking metrics like these on your KPI (key performance indicator) dashboard, and that process is very likely to generate some all-new insights.

So let's dive in and look at five emerging criteria that you can quantify and track over time:

1. Repeat purchasers
2. Deep considerers
3. Raving fans
4. Disinterested recipients
5. Percentage of completed records

Being Your Own Harshest Critic

Before we dive into the mother of all measurement and optimization techniques, let's spend a moment celebrating one of my favorite human traits: constructive dissatisfaction. Some of the most successful marketers I know are in relentless pursuit of the “next big thing.” They design their campaigns to be measurable from the beginning. They also have ultrafocused testing parameters, which means they wring the strongest results out of a manageable set of tests. They internalize the company's marketing and sales goals, and help their internal customers hit those numbers.

There's also a corresponding set of things they don't do. They don't ask permission to improve their programs. They don't overtest and underdeliver. They don't wait for the business to tell them what to do. They don't let perfect be the enemy of good.

In this way, the strongest marketers are their own harshest critics. They understand it's almost always better to present solutions and marketing opportunities to their business partners as opposed to standard reports on requested activities. They reframe the success criteria around more meaningful elements, and they relentlessly explore new tactics.

I see this approach work at almost every level. In fact, I remember a director-level friend who ran a huge ecommerce business in the early 2000s telling me he proactively held back 10 percent of his budget to support pure innovation experiments. He was thinking deeply about driving repeat purchase and other key ecommerce goals 12 to 14 years ago, and was willing to test and explore with many on- and off-line strategies—even working with very early stage startups who were equally as early in thinking about data-driven marketing.

Unsurprisingly, he steadily rose through the ranks over the last decade to VP, and has now parlayed that into another senior executive position externally. The lesson is simple: be bold, dedicate real dollars, and advocate for innovation as aggressively as possible.

When it comes to optimization and high-level performance, almost all the best marketers relentlessly move their own goalposts. No one from sales comes over and asks for a new funnel report on marketing qualified leads to sales qualified leads ratios; it's something a lead-gen driven marketer is already tracking, measuring, and sharing outside their group.

It also comes into clear play during the annual budgeting process. When truly great marketers bring forward next year's budget, they're focused on executing more of what was successful last year, and less of what was mediocre. And although it sounds straightforward, it's almost never that easy. Great marketers are always in search of flexible budget allocations and external programs that drive exponential revenue for incrementally more investment. We're moving toward a world in which preprogramming marketing campaigns or events 6 to 12 months in advance just won't be the most effective way to market.

Let's say you run a successful ecommerce business selling crafting supplies to 25- to 40-year-old women, and Pinterest launches a brand new sponsored content advertising product in the second quarter next year. Do you want your marketing dollars already committed to print advertising or do you want to double-down on Pinterest because it's already driving a ton of sales conversions—and it's directly measureable?

By being as constructively dissatisfied as humanly possible in your role, you'll set the tone for both measurement and optimization of all your programs. You'll be the one starting the conversation on alternate KPIs—not the MBA that just got hired into a product analyst role.

Scoring: The Holy Grail of Objective Measurement

If all this micro measurement and ranking sounds like pure gibberish, and you have no idea where to start or how to proceed, hang on. The great news is that you can bring all your measurement and optimization strategies to life using one simple concept: scoring.

Broken down to its simplest concept, scoring allows us to assign (and subtract) points to a deep series of small events, and then sum them in real-time to add an entirely new layer of information to a record in our database. Although scoring was traditionally a preferred tactic of B2B marketers trying to quantify the likelihood of a prospect closing during a months- or years-long sales process, it's now absolutely commonplace across B2C as well as a measure of activity level and CLV. Almost every element or behavior associated with our prospect or customer can have points assigned—and can contribute to a scoring model.

It's also important to recognize that we might have two or three or four concurrent scoring models running at any given time. Although they may trend in similar directions (imagine that more active users will likely translate into more repeat customers provided your marketing is effective), each scoring model may be radically different and unassociated with all other scores.

For example, I know software companies who sell traditional package software with a customer-satisfaction score that is maintained across channels and over time. The most recognizable of these might be the Net Promoter Score concept that came out of Harvard Business Review in 2003. Satmetrix, one of the innovators of the method, describes it this way:

The Net Promoter Score, or NPS®, is based on the fundamental perspective that every company's customers can be divided into three categories: Promoters, Passives, and Detractors.

By asking one simple question—How likely is it that you would recommend [your company] to a friend or colleague?—you can track these groups and get a clear measure of your company's performance through your customers' eyes. Customers respond on a 0- to 10-point rating scale and are categorized as follows:

• Promoters (score 9–10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
• Passives (score 7–8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
• Detractors (score 0–6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.

To calculate your company's NPS, take the percentage of customers who are Promoters and subtract the percentage who are Detractors.

Companies most often pose these NPS questions via Interactive Voice Reponses (IVR) systems in a post-call session or via email. Although measuring both the score and the subjective input associated with the score (the latter turns out to be the really hard part of making the data meaningful and actionable), this exercise often becomes so high level that it's rendered ineffective. Marketing can blame product for not including all the required features for strong NPS scores, and sales can blame support just as easily for not effectively dealing with customer concerns that lead to fewer repeat buyers. Although it's a solid framework to think about across your entire organization, be prepared for the process itself to create some great internal drama in the first year of rollout.

Conversely, we can think about scoring at a much more marketing-specific level. The concept of behavioral marketing really catches fire when we begin to consider how to score an active customer. For example, we might lay out an ecommerce model like this:

1. Email open: 5 points.
2. Email click: 10 points.
3. No Email opens for a month: –10 points.
4. Browse shopping-oriented site page: 10 points.
5. Unsolicited site visit: 20 points.
6. Click buy now in an Email: 25 points.
7. Cart an item: 40 points.
8. Abandon a cart: –40 points.
9. Generate a transaction (below $50): 100 points.
10. Generate a transaction (above $50): 150 points.
11. CLV above $500: 250 points

Once you run the models for a few weeks, it'll become very clear how each individual ranks among the masses. You'll now have a unique activity score on every record in your database, and can begin to individually market to bands of these customers.

Thinking back to our earlier discussion on raving fans and disinterested recipients, your baseline scores might be above 300 and below 50, respectively. Once you've got individual users rolled into bands, you can begin hyperfocused marketing based on where they lie in the spectrum. You can try to effectively market items related to a recent purchase for the most active users or get them to visit a retail store if they've only ever purchased online. Your goal might be to engage the least active in one of your two to three content streams and begin to earn back some credibility by becoming a trusted source of information. Either way, you can see that quantifying the effort via a scoring model is the great differentiator.

And speaking of multiple scoring models, I know many groups outside marketing who look to quantify their users. Most commonly, call centers will maintain customer satisfaction indices based on how often someone calls, whether the company resolves their issues quickly and what their NPS score is. Understanding how marketing's efforts fit into these other scoring models is just as critical as deriving your own. By providing more data points to enrich other groups' views will earn you the good will needed to round out your own scoring models.

Although I could literally write another 5,000 words on scoring models, it boils down to this: get yourself a world-class SaaS tool that manages a solid level of scoring events and just get started. You don't even have to act on them for four to six months if you don't have the bandwidth, but the longer they're running—and you're tuning them—the more effectively they will support your data-driven decisions in the future. You can push, pull, and experiment with scoring models in the background of your marketing effort until you're supremely comfortable with your approach, and then simply factor them into your segmentation criteria, build dynamic content for specific segments, and you're off and running.

Conclusion

Although measurement and optimization can mean different things to every marketer, the goal here is to expand your thinking and introduce some deeper criteria to consider beyond simple channel-specific methods like open rate or click-through rate. More often than not, those who think most critically about measurement end up with the best performing programs. I believe this is a combination of old-fashioned critical thinking powered by deeper data and a marketer's natural sense of restlessness.

It should go without saying that each of your specific channels should be operating at near-peak performance—especially those that are very expensive or occur at large scale. The old adage about things worth doing are worth doing right should be your mantra here. Nail the basics of your channel-level performance, ensure you're aggressively maintaining the high quality of work via optimization, and then apply the five emerging views we discussed above—or define your own that fit perfectly into your business. Your marketing game will rise quickly, and in almost every customer case I see, your revenue contribution will rise as well.