A Chapter About Bruce

July 17, 2014 By Rick Shea Leave a Comment


Introduction

Are the objectives for your marketing programs really just reasons without numbers? Well, with some inspiration from a seed planted by a song I first heard in 1975, I’ll try to help you to fix that problem.

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I’m a long-time Bruce Springsteen fan. My affliction set in the first time I heard Born to Run played on my local FM station. I remember it well. It was the fall of 1975 and I was sitting in the basement of our family home, pretending to do homework.

When I decided several years ago to learn about blogging, I wanted to do so outside of my work world. I chose to blog about Bruce as I had studied him more diligently.

The blog was fun, I learned what I needed to know, but after five years of weekly posts, I lost the enthusiasm to keep going. I stopped posting at the end of 2012, although I have kept the blog site up. I’m happy I did it and the blog opened doors for me that I never anticipated.

Recently, a new door cracked open. I’ve been asked to consider writing a chapter in a book about Bruce that one day will hopefully be published. The asker found me through my blog.

I haven’t made my decision yet but I’m thinking about it and why I might like to do this. That leads me to the point of this story. I want to illustrate the difference between having reasons for doing something and setting proper objectives for doing that something.

Reasons may give you purpose, but proper objectives give you the ability to measure whether you achieved what you set out to accomplish. To measure whether marketing programs achieve their purpose, you need to be able to compare results to objectives.

I have to decide whether to commit my resources to writing this chapter, in the hopes it will be accepted and published. Similarly, you have to decide whether to support and run specific marketing programs, in the hopes they will move your business forward.

Setting Clear Objectives Will Help Us Both

My Decision

Let’s start by looking at my reasons for wanting to do this:

  • Become a published author
  • Improve my writing skills
  • Reach a new audience
  • Have some fun

I think these are good reasons to do it, but they are just that, reasons. To convert them to measurable objectives, I need to challenge them as much as your boss (not that Springsteen guy) would challenge any of your marketing program objectives with some of those “what do you mean by that?” type of questions. More on that later.

By quantifying the outcomes I’d like for each reason, we can begin to find the semblance of a measurable objective:

Become a published author: This is the easiest one. If the book is published and my chapter makes the cut, then mission accomplished. I have to admit, this is my number one objective, and the one I’d weight highest on my scorecard.

Improve my writing skills: Now it gets tougher. How do I measure the change in my writing skills from before until after I write that chapter? I could assemble a panel of writing experts and have them develop a scoring methodology to evaluate my before writing, perhaps a few of my newsletters. They would then have to use the same methodology to evaluate my completed chapter. The difference between the two scores would be my improvement. I could set my objective at a 10% improvement.

Reach a new audience: I need to start by being more specific about who I’m trying to reach. If I want to reach Springsteen fanatics to draw traffic to my dormant blog, my objective could be to increase average weekly unique site visitors by 20%.

If I want my chapter about Bruce to attract prospective clients for Optiv8 Consulting, then I need to define how much new business I’d like to acquire this way. I’ll set the bar for number of clients at one, which is likely overly optimistic. The dollar value objective for that one engagement will remain a confidential matter between my new Springsteen-loving marketer friend and myself. I’ve met many Springsteen-loving marketers over the years so, who knows, this might work!

Have some fun: This one is tough. I’ll know if I’m having fun when I’m doing it, but what could I possibly use as a Key Performance Indicator for my fun? I’m open to any suggestions you’d like to make but I know one thing. I’ll be wearing a massive grin the day my copy of that book arrives and I see my name in the book.

Your Decisions

Since I don’t know which program(s) you’re contemplating running, or what your objectives might be, I’ll suggest a few things for you to consider.

Start by asking if your objectives are just reasons without numbers. If you haven’t done the harder work of quantifying the results you want related to those reasons, you’ve yet to set objectives, and you won’t be able to measure properly when the program is over.

For each objective you set, challenge yourself with a few questions, before your boss hits you with those “What do you mean by that?” questions. These will get you started:

Who are you targeting? Examples: Current customers, prospects, specific market segments, a specific audience.

What do you want them to do? Examples: Follow/like you, subscribe, download, buy or buy more of specific products or services.

When do you want them to do it? Specify a period or a deadline.

How much of that do you need them to do for you to be happy? Pick a number or a percentage growth vs. a benchmark, like same period last year, and don’t sandbag it or your boss will challenge you some more!

The first three of the above questions help you to define the behaviour you want. In the last one, you quantify that behaviour.

In addition to making it possible to measure your marketing, setting proper objectives also sets expectations and defines success. That makes it easier to decide whether to allocate limited resources to a given initiative.

In truth, my decision isn’t too hard and I’ll probably go for it, assuming I can come up with an angle for my chapter. So my consulting work won’t suffer, I’ll re-allocate non-work time that I’ve allocated to other fun things, like to paint my front porch.

As a business executive or owner of a marketing budget, you must optimize your resources and budget by making good choices about which programs to fund. You’ll have your reasons for wanting to support each program, but be sure to challenge your reasons and objectives with some good questions before The Boss beats you to it.

For you Springsteen lovers, the blog is Your Friday Bruce Fix. I couldn’t tell you sooner as I worried you might never come back!

Filed Under: Approach, Effectiveness, objectives Tagged With: Effectiveness, Management, marketing, Measure, measurement, Metrics, objectives, scorecard

Better Than Nothing

June 26, 2014 By Rick Shea Leave a Comment


Introduction

Perhaps it’s just human nature. We don’t always do the things we know are good for us, like eating oatmeal or measuring marketing. Those who don’t currently do either can be much further ahead, just by doing a little, which is certainly better than nothing.

If you don’t currently measure your marketing, please grab a bowl of oatmeal and read on for four reasons why you should start measuring!

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Last week, my sister Dianne emailed to share her discovery that Bob’s Red Mill makes a quick cooking steel cut oats. We’re both fans of steel cut oats but don’t love how long they take to cook, so this came as good news.

In my reply, I wondered whether they deliver the same health benefits as regular steel cut oats. I recalled reading something about how oats that take longer to cook also take longer to digest, which is somehow more beneficial to your health, although I’m not sure why.

When I raised this health related issue to my sister, her reply was “any steel cut oats is better than none…which is how much I’ve been having lately”. You see, Dianne has a young son who I’ve written about before, and he keeps her pretty busy. Quick, healthy breakfasts are a good thing!

I think Dianne is right. Any steel cut oats is better than none. If you don’t eat steel cut oats, you don’t get the health benefits. Marketing measurement is the same. If you don’t measure, you don’t learn anything that helps you to improve your marketing.

Like mothers of young children, marketers have a lot on their plates. They know measurement is good for them, but many don’t measure as much or as well as they would like. Many others don’t measure at all.

As much as they might like to measure, a full-on approach often isn’t practical, usually due to a shortage of some combination of time, resource and expertise. Still, they need to find a way to get something done, as the benefits of marketing measurement make it worthwhile.

If you don’t already measure your marketing, here are some reasons you should.

 

4 Reasons to Measure Marketing

1. You Will Learn Something Useful: The main problem with not doing any measurement is that you don’t get to learn anything that helps you to make better marketing decisions. If you could measure something, and learn something that helps improve your marketing, that would certainly be better than learning nothing.

2. You Will Set Clear Objectives: Measuring your marketing brings an additional layer of discipline to your marketing decision making. Committing to measurement requires that you to set clear and measurable objectives when planning your marketing programs. It will force you to ask the right questions about each proposed program. Those questions will help you filter out bad ideas and reduce ineffective spending of your limited marketing budget. That alone is worth the price of admission.

3. You Will Have Data: A manager with the responsibility for a marketing budget has two main organizational battles to fight. The first is to fight for budget to fund upcoming marketing programs. The second comes later when it’s time to prove that budget was well spent. If you measure marketing, you will have data with which to fight your battles. Having data is way better than having none and going into battle unarmed.

4. You Will Rank Your Programs by Results: However you choose to measure, make sure you apply one approach consistently across your diverse range of marketing programs. That consistency will give you the ability to rate, rank and compare programs according to their effectiveness at meeting their objectives. You will be able to identify the winners and losers, and you will have a basis on which to make decisions about which types of programs to run in the future.

My sister is right to focus on getting the health benefits from steel cut oats, and if it takes a bit of a short cut to get her there, than that is what she should do. Marketers who don’t measure also need to find a way to get there. I believe in a practical approach to a complex problem as a reasonable and effective way for time-starved marketers to get some measurement done and get the benefits of improved marketing health.

If you measure your marketing, you will learn what works and doesn’t work, so you can optimize your strategies and get better results. Measure… Learn… Optimize… In my books, that’s way better than nothing!

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About the Author: Rick Shea is President of Optiv8 Consulting, a marketing effectiveness consultancy with a focus on helping small to mid-sized organizations measure their marketing so they can stop wasting money.

Copyright ©2014 Optiv8 Consulting.  All rights reserved.

You may reproduce this article by including this copyright and, if reproducing electronically, including a link to:  http://www.optiv8.com/

Filed Under: Approach, Effectiveness Tagged With: Effectiveness, Management, marketing, Measure, measurement, measuring

Counting or Measuring?

March 25, 2013 By Rick Shea Leave a Comment

I recently attended a marketing industry event in Toronto where a presenter made a statement about marketing measurement that got me thinking and eventually inspired this month’s newsletter.

While talking about current trends in marketing, the speaker identified marketing measurement as one of the top issues currently facing marketing executives. He talked about how technology and big data have become pervasive in marketing, while also suggesting that as an industry we have yet to figure out how to measure marketing properly and make sense out of all the data.

This got me thinking because I realized an aspect of this point of view was consistent with the mixed messages I have been noticing in marketing measurement circles. Measurement is a hot topic and a growing industry. Yet, for all the talk and activity, and the apparent progress we’ve made, there still seems to be a strong point of view out there that marketers aren’t measuring as well as they would like.

Measurement is Everywhere

On one hand, it seems as though wherever I go, whatever I read, whoever I talk to, measurement keeps coming up. With all the buzz about data and analytics tools, you would think that everyone is measuring effectively.

I also keep hearing about new and/or improved marketing analytics tools and approaches. This is especially true regarding digital, social and mobile marketing as there is so much innovation happening in these channels. As new platforms emerge with new ways for brands to interact with customers, so do new data gathering and analytics tools to measure the interactions on those and other platforms.

We’re Not Measuring Very Well

On the other hand, while there certainly is a lot of talk about measurement, and probably a lot of action, I’m sensing that few companies are truly happy with their measurement efforts. There is excitement about the availability of so much data, yet there are also growing challenges related to the complexity and cost of sorting out all that data and clarifying the degree to which marketing is working.

Social media provides a great illustration of the notion that measurement is everywhere but we’re not measuring very well. There are plenty of social media platforms with which to engage consumers, and dozens, if not hundreds, of tools for gathering data about those engagements.

Yet, despite all the data that is available, I keep hearing suggestions that we’re not measuring very well. In the same week earlier this month, a digital marketing agency president told me that no one has figured out how to measure social media properly, and a marketing researcher told me her clients don’t measure social media, they just keep trying an assortment of things in the hopes that enough of it will work.

Why the Mixed Messages?

So, why all the talk but seemingly so little satisfactory action? I’m starting to think part of the problem is that we don’t all define measurement the same way. Let’s look at a dictionary definition of measurement.

  • to ascertain the extent, dimensions, quantity, capacity, etc., of, especially by comparison with a standard: to measure boundaries.
  • to estimate the relative amount, value, etc., of, by comparison with some standard: to measure the importance of an issue.

Contrast that with a dictionary definition of counting:

  • to check over (the separate units or groups of a set) one by one to determine the total number; add up; enumerate: He counted his tickets and found he had ten.
  • to include in a reckoning; take into account: There are five of us here, counting me.

Are you Counting or Measuring?

Maybe a lot of the measurement that is happening out there is really just counting, and maybe those counting are the ones feeling the most discomfort. To be fair, there’s no shame in counting well, which involves gathering data accurately, reliably and consistently. Proper counting is an essential step that comes before measurement. Good quality data makes proper measurement possible.

Still, those who are mostly just counting and who may well be gathering great data with the latest analytics tools are likely not learning enough from their “measurement” efforts. Pure counting is not nearly as actionable as measuring against something, such as an objective or a comparable benchmark, such as another marketing program.

Measurement delivers its greatest benefits when it enables you to understand which marketing programs are creating the most value for your company and, therefore, how best to deploy your marketing budget in the future. Good quality measurement makes better decision making possible.

So, what action can you take if you are feeling frustrated by marketing measurement? Start by questioning whether you are counting or measuring. Look at the important data you have about any marketing program. Taking one metric at a time, ask yourself questions like “How good is that number?” and “Compared to what?”.

If most of the time you don’t have a good answer, you may well be stalled at the counting stage. On the other hand, if you can assess how good a metric is vs. an objective or some sort of standard, or if you can rank programs according to an overall rating, then you are measuring. If you are able to make better decisions about how to allocate your marketing budgets and that leads to better business outcomes, then you may already be well ahead of the pack!

Filed Under: Approach, Effectiveness Tagged With: Effectiveness, marketing, Measure, measurement

Predictions and Marketing Knowledge Succession

January 31, 2013 By Rick Shea Leave a Comment

On January 15th, I attended Deloitte’s Technology, Media and Telecommunications Predictions 2013. The presentation was delivered at The Carlu in Toronto by Duncan Stewart, Deloitte Canada’s Director of Research.

I enjoy attending events like this for two main reasons. The first is for the content, as it helps me to stay on top developments and trends that impact my clients and the environment in which they operate.

The second reason is for the networking and to possibly meet new people or bump into a familiar face or two. One of the familiar faces I saw after the event belonged to my friend and fellow consultant, Rob Coatsworth. After a quick hello, we decided to go chat over a coffee.

One topic of our conversation was knowledge succession, which is one of Rob’s areas of expertise. Knowledge succession helps organizations to capture, retain and pass on the experience-based knowledge that individual employees accumulate, rather than have the knowledge leave when employees leave the organization.

While knowledge succession is hardly a new challenge, I found our conversation thought provoking because I think the challenge is now greater than ever, and I believe this is especially true for marketers. Here are some reasons why:

General Environmental Factors

Multiple Jobs Per Career. The days of working for one company your whole career and getting the gold watch upon retirement are long gone. Employer/employee relationships are less loyal and have evolved from being career-long marriages to serially monogamous relationships. At some point, either or both parties decide that it’s time to move on and try something new.

Short-Term Financial Pressures. The financial markets exert tremendous pressure on publicly traded companies to hit their quarterly financial targets. Senior executives whose compensation is tied to hitting those financial targets often reduce headcount and salary expense in order to hit those targets. Well paid long service employees, who generally have accumulated the most knowledge are attractive targets to be let go for the expense that can be saved.

Aging Baby Boomers Will Retire. While the impact of this has been delayed by the volatility in financial markets, a large number of highly experienced and long service employees are at an age where they would like to retire if they could, and will when they can, taking their knowledge with them.

Marketing Environmental Factors

Marketers Change Jobs Frequently. Employers value marketers with a range of experiences working on different brands in different categories for different companies. That encourages marketers to keep changing jobs to drive up their marketability and market value.

Accelerating Marketing Complexity and Speed. Marketing is changing rapidly, with innovation, technology and media fragmentation driving much of that change. There are more ways to communicate with consumers and many more touch points along the path to purchase. The pace at which marketers have to execute campaigns leaves them little time between campaigns to measure and learn from past efforts.

Measurement and Marketing Knowledge Succession

Organizations that want to improve their marketing effectiveness need to learn from their successes and failures. That means they need to measure and learn which campaigns are most and least effective, so they can adjust their strategies going forward.

Without an organizational approach to capturing and retaining the lessons learned, it is left to individual marketers to do their own learning. So long as they stay, the organization will benefit but if they decide to leave, the knowledge will leave with them.

The reality is that employees leave and unless companies find ways to learn along with the employees, they are just training their competitors’ future marketing talent. A big step in the right direction is to measure all marketing.

Here’s a five step plan for Marketing Knowledge Succession:

  1. Commit to learning. Broaden your focus on executing marketing programs efficiently and effectively to also include learning from those programs to enhance future strategies and tactics.
  2. Embrace measurement as the key to learning what works and what doesn’t for your brands. Track your success at meeting each campaign’s objectives.
  3. Adopt a measurement methodology that can be applied consistently across brands, programs and time. A consistent methodology will give you benchmarks and a basis for rating and ranking programs.
  4. Measure the things that matter. Choose metrics that indicate whether your marketing is driving profitable customer behaviour and creating value for your business. Keep in mind those Key Performance Indicators that matter to financial markets, owners, investors and business managers and find a way to connect your marketing measurement to the health of the business.
  5. Keep good records. Make sure you have a way to securely collect, store and share the results of your measurement efforts. You’ll be building a knowledge data base that current and future marketers in your organization can use to refine their strategies and execute more effective programs.

Knowledge succession has a medium to long term focus, but committing to it also provides short-term benefits. To be able to aggregate and pass knowledge along, you first have to capture it.

To learn what works and doesn’t work in marketing, you have to measure it, and what you learn can pay dividends on your very next campaign. That will benefit both marketers and their employers, today and in the future.

This is not a prediction, unlike those presented by Deloitte, but I do firmly believe that organizations who commit to marketing measurement and knowledge succession will have a brighter future.


Filed Under: Approach, Effectiveness Tagged With: Effectiveness, Knowledge, Management, marketing, Measure, measurement, Strategy

Leap of Faith

October 22, 2012 By Rick Shea Leave a Comment

I have to admit that marketing measurement was the last thing on my mind as I watched daredevil Felix Baumgartner take his extraordinary leap of faith from a balloon at an altitude of 128,100 feet. The only thing on my mind was that Felix was clearly out of his.

Few things in life are certain, but I am quite certain that I could never do anything like that jump. It would require a bravery possessed by very few people on the planet. I’m not one of them, nor am I out of my mind, at least that’s what I think!

As I thought more about whether Felix might actually be out of his mind, I decided that while he definitely was brave, he probably wasn’t crazy. I also realized he needed something more than his bravery to make such a jump.

I consider Felix’s plunge towards the New Mexico desert a leap of faith because, before he could hop off that ledge into a four plus minute free fall, Felix absolutely had to believe in three things:

  • His Team – That they knew what they were doing and wouldn’t let him down.
  • His Technology – That his spacesuit would protect him and that his parachute would open BEFORE he hit the ground.
  • Himself – That no matter what happened, he could handle it, such as pulling out of a wild spin before blacking out or dying.

Without these beliefs, I’m pretty sure Felix wouldn’t have jumped, as the risks and the price of failure would have seemed insurmountable. One mistake, one miscalculation or one malfunction could certainly have killed him.

By contrast, a decision to measure marketing is considerably less risky and dramatic than a decision to jump to earth from the edge of space. Still, it can seem daunting to leap into marketing measurement as there are some risks, including that you might:

  • Not learn anything that helps you improve your marketing
  • Waste precious resources, like money and time
  • Expose the fact that some of your marketing is ineffective

While these are legitimate concerns, there are lessons from Felix’s leap of faith that we can apply to marketing measurement which also help to mitigate those risks.

Believe in what you’re doing: There are many ways to approach marketing measurement. What matters is to commit to a methodology that you can execute consistently. If your organization can commit to an approach and stick with it, then you greatly improve your chances of success. Much of what you will learn will come from applying one approach across all forms of marketing spending.

Get all team members on the same page: Successful teams focus on common goals. Everyone needs to understand and agree on your reasons for measuring, on what you’re trying to learn and on how you define measurement success.

Get the help you need: Support your measurement efforts appropriately, with the people, time, expertise and funding you need. You may have sufficient internal resources or you may need to supplement those resources with external help. It’s tough to take that leap if you think you will be out there on your own.

Remember that it’s a journey: Your efforts to develop effective measurement practices will likely be a long journey with a lot of small victories along the way, and probably a few mistakes, too. The full experience of that journey with all the victories and mistakes is where you’ll learn what you need to know to succeed. The things you’ll learn along the way will often pay dividends immediately, like helping to identify and eliminate ineffective marketing programs.

I can imagine that Felix overcame many obstacles in the years, months and days leading up to his big jump. The spectacular success of his jump was not so much a single event as it was an end point in a journey, and while it may be an end point for Felix, it is also a key milestone in an ongoing journey for science and space exploration.

Those who succeed at marketing measurement make a commitment to the journey and begin that journey believing they have what it will take to overcome obstacles, mitigate risks and achieve success. They also know that by making sure they have the right stuff for measurement – a blend of people, expertise, technology and methodology – they can believe in their journey and take their own much less risky leap of faith.

Filed Under: Approach, Effectiveness Tagged With: Effectiveness, Management, marketing, Measure, measurement

Down In The Alley

July 19, 2012 By Rick Shea Leave a Comment

A few years ago, the couple who live across the alley behind my house decided to host a small gathering on their driveway for those of us living nearby on either side of the alley. A few homes had sold recently and they decided that this would be a good way to welcome the new neighbours and help everyone get to know each other a little better. It was fun, and this annual tradition lives on 4 or 5 years later.

This year’s edition of the alley event happened last Saturday afternoon. One of the things I enjoy about these neighbourhood gatherings is having the time to learn about each other in a relaxed setting.

On Saturday, I was having a good chat with my exceedingly well-named neighbour, Rick. He asked about the nature of my work and so I gave him a bit of an overview about how I measure marketing effectiveness. That quickly led to him asking me this question:

“What did you think of General Motors’ announcement that they were pulling their Facebook ads?”

My first reaction was that I supposed GM felt their ad spending on Facebook wasn’t working.  As we continued, our conversation shifted to the timing of GM’s announcement, mere days before Facebook’s highly anticipated initial public offering. We concluded that something must have gone wrong in their relationship with Facebook for GM to announce their decision at such a sensitive time.

After Rick, who is an actor, entertained the local kids by juggling while walking on stilts, I went home, considered our conversation, did some research and organized my thoughts.

What I Found & My Thoughts – #1

In case you missed it, GM announced they would eliminate $10 million of advertising spending on Facebook. This still leaves another $30 million which they spend on their Facebook marketing initiatives, although I don’t believe any of that spending becomes Facebook revenue.

Clearly, GM thinks there’s an audience on Facebook worth engaging through marketing, but not so much for advertising, at least not yet.

What I Found & My Thoughts – #2

The $10 million is a drop in the bucket compared to GM’s 2011 total US ad spending of $1.8 billion ($3 billion globally), and Facebook’s 2011 revenue total of $3.7 billion, most of which was for advertising.

Smart marketers who spend $3 billion annually on advertising almost certainly also measure the effectiveness of that spending pretty rigorously. It is a natural part of the process to question, evaluate and optimize all parts of that spend on an ongoing basis, and the Facebook ad spend would be subject to that scrutiny.

What I Found & My Thoughts – #3

It has recently been reported that Facebook and GM are back in talks to renew GM’s advertising and that GM is asking Facebook for more data to bolster their measurement efforts.

Perhaps the problem was not so much that GM’s Facebook advertising didn’t work, but rather that GM couldn’t prove whether or to what degree it did, or didn’t. I also wonder whether GM’s pre-IPO announcement was a negotiating tactic to get the data they want from Facebook.

What I Found & My Thoughts – #4

I noticed that following GM’s announcement, their rival Ford tweeted something to the effect that Facebook ads are effective when used properly. Let’s assume the people at Ford are also pretty smart and measure rigorously, too. By implying they know their ads are effective, their tweet also implies they are better than GM at measuring Facebook ad success, and thereby raises some related questions:

  • Does Ford use Facebook ads differently and in a way that makes measurement easier?
  • Is Ford better than GM at setting measurable objectives for each ad?
  • Does Ford already get better Facebook data than GM?
  • Was Ford’s tweet was just an attempt to position themselves as smarter than GM?

We can’t know the answers to these questions, but we can remind ourselves of a few marketing measurement fundamentals:

Set clear and measurable marketing objectives: To know whether a marketing program worked, you have to first define exactly what it would mean for your program to “work”. In other words, what outcomes would make you happy?

Your objectives must be reasonable and attainable: A clearly defined objective isn’t necessarily attainable. A good outcome can still fall well short of an unreasonable objective, and be classified as a failure, when in fact the failure was in the setting of the objective.

You need to be able to get the data you need, consistently, reliably and cost-effectively: This may be at the crux of GM’s discussions with Facebook. GM may know exactly where they want to go with their Facebook ads, but they just can’t tell if they’re getting there, which when you’re behind the wheel of a $10 million dollar ad spend, is sort of important.

It will be interesting to see whether GM and Facebook can reach an agreement. My guess is that GM won’t want to walk away from advertising to Facebook’s massive and targetable audience, particularly if it seems their competitor(s) may be having success in this regard. Maybe GM just needs to know if they’re meeting their objectives and whether their Facebook ad spend has them driving on a six-lane superhighway, or somewhere down in the alley.

Filed Under: Approach, Effectiveness, Metrics Tagged With: Effectiveness, Management, marketing, Measure, measurement, objectives

Pictures at an Exhibition

November 17, 2011 By Rick Shea Leave a Comment

I’m a long time hobbyist photographer. While I occasionally get hired to take photos for commercial use (e.g. events, product shots, architecture), I mostly just do it for fun. In fact, I had never formally exhibited my photos prior to this past weekend when I participated in an art show on my street.

Now in its fourth year, this show is basically an art walk limited to the one block of the street on which I live. I was one of 10 artists exhibiting a variety of art in 5 houses, on both Saturday and Sunday afternoons.

Reflecting on the event Sunday night I decided that it was a lot of fun, I’m really glad I exhibited and I’ll probably do it again next year. Since that simple statement doesn’t make for much of a newsletter on marketing measurement, I thought I would elaborate on how I came to that conclusion.

What I Spent

To begin with, my cost to participate was very low. Since the walls in my house were already covered with plenty of framed photos and ready to exhibit, I just needed to shuffle a few around and decide on prices. I probably spent all of about $50 to get ready, including salty snacks and chocolate chip cookies for my visitors. So, my costs were minimal.

What I Sold

I sold a total of 7 photos for $525. I’m happy with this outcome because:

  • Over the 2 days, I estimate 45 people dropped by my house. One person bought 2 photos, meaning I converted 45 prospects to 6 customers, for a conversion rate of 13.3%. This seems like a good rate for an art show, but I don’t have a benchmark to compare it to.
  • My sales surpassed my expectations. I thought I would do well to sell two or three photos and maybe pocket $200.
  • My customer acquisition cost ($50 ÷ 6 = $8.33 per customer) was much lower than my average revenue per customer ($525 ÷ 6 = $87.50 per customer) making each transaction and the overall event profitable.

What I Learned

For some background, our marketing efforts consisted primarily of:

  • Post card invitations hand-delivered to homes within roughly a 2 block radius
  • Each artist emailed invitations to their own list of contacts
  • The organizers solicited and obtained support from local politicians who emailed local residents and tweeted our event
  • Free on-line publicity, most of which came through a new local website called GrownUps55plus, for which I’m saying thanks by this mention

Secretly wearing my marketing measurement hat while disguised as an artist, I randomly asked those visitors I didn’t know the usual “how did you hear about us” kind of questions.  I learned that, in addition to those friends and neighbours I already knew, most people either:

  • Lived in the neighbourhood, or
  • Were friends of one of the other artists

From a product point of view, of the seven photos I sold, 4 featured trees as the main subject, 1 featured a tree and a window, 1 featured a window, and the other featured a racoon. Selling the racoon photo gave me a chuckle because earlier that day two other people had separately A) cursed the racoon, and B) saluted it with a middle finger. Clearly, one person’s art is another’s neighbourhood menace. Also, people like trees.

Another interesting fact is that the turnout was much higher last year when some houses estimated traffic at 300+ visitors. Perhaps that’s a sign people are less confident in the economy this year? Imagine if I could have applied my 13.3% conversion rate to 300 people instead of 45!

What I Would Do Differently Next Time

Based on my informal measurement efforts and observations, and input from the other artists, here are some thoughts for us to consider for next year:

  • Proximity and familiarity seem to bring people out, so we should expand our post card coverage beyond 2 blocks and each artist could invite more people.
  • Recruit more houses and artists to participate; the additional artists can invite their contacts, and a larger event with more art for sale should appeal to more people.
  • Continue to solicit free publicity and politician support.
  • Find a volunteer with public relations expertise, perhaps a student looking for experience, to help us get more local and on-line media coverage.

Conclusion

I didn’t apply measurement to our marketing efforts in any sort of disciplined way, yet maybe that’s appropriate for such a low budget event. Still, by simply looking at what I spent, what I sold, what I learned and what I would do differently next time, I should be able to improve my sales next year, and that’s what counts.

Whether for a small event like this, or a major marketing initiative, the best way to improve next time is to make sure you have a way of learning from what you did this time. Measure, review, reflect and capture what you’ve learned, so you can optimize future strategies.

There’s other soft data to consider, too. I had a great time, met some neighbours, saw some friends and enjoyed seeing people enjoying my photos.  I look forward to next year and in the meantime, I’ll be out shooting windows and trees, or maybe even a racoon.

 

Filed Under: Approach, Effectiveness Tagged With: Effectiveness, Management, marketing, Measure, measurement

Separating Fact from Opinion

October 20, 2011 By Rick Shea Leave a Comment

Megan Kalmoe rowed for the United States at the Beijing Olympics and is a 2011 World Silver Medalist. While she’s obviously a great rower, I hadn’t heard of Megan before reading Randy Starkman’s article in the Sports section of the Toronto Star on October 13, 2011.

The story focused on the fact that Megan named two Canadian men to the 2011 edition of her “20 Hottest Male Rowers” list, which she recently published on her blog. Not surprisingly, I didn’t make the list. One reason is that I’ve never rowed in my life. There might be other reasons, perhaps many, but more on that later.

I’m happy when Canadians do well in any international ranking, but being a marketing measurement guy, my interest in this article was to learn about Megan’s rating and ranking process.

Here’s what I learned:

  • You must be a world class male rower
  • You may lobby Megan to get on her list
  • Megan’s female friends can nominate you and lobby on your behalf
  • If Megan thinks you’re hot, she might add you to the list

As far as I can tell, Megan’s approach is pretty subjective and unstructured, and the resulting list reflects her opinion, which is fine.  I can’t tell whether lobbying influences Megan’s decisions, but it really doesn’t matter.

It is worth noting that Megan is just having fun with this and important strategic decisions aren’t being made because of her list. But, consider this. What would happen if the top three rowers on Megan’s list landed endorsement deals because they topped her list?

I think the fun and friendly lobbying might get a little more intense for the 2012 list, and Megan might feel the need for a more structured approach to minimize the impact of bias and personal opinion on the rankings.

For now, since this is all in good fun, Megan’s methodology for measuring male rower hotness is perfectly appropriate and as good an approach as any. However, when it comes to measuring marketing program hotness, marketers need a more rigorous approach.

What if you used a similarly unstructured method for measuring marketing programs? Brand managers would lobby you to have their programs highly rated. People working in sales, finance, customer service or operations would also offer their opinions. You wouldn’t have much fact-based data and you’d end up having to make an opinion-based judgment call.

The impact on your judgment call of everyone lobbying to influence your opinion might come down to:

  • The clout of each person doing the lobbying, perhaps related to their role in the organization
  • Each lobbyist’s communication skills and powers of persuasion
  • Your ability to separate fact from opinion, and to somehow remain objective

Here’s the problem. You don’t want the most effective lobbyists to skew the rankings in their favour.  Nor do you want personal opinion and bias tainting your overall approach. Opinions are interesting, but not very actionable.

To be able to take action, make good decisions and adjust strategies, you need data to identify your most and least effective programs. A structured and disciplined methodology will give you that data, while filtering out opinion.

To remove as much personal bias and opinion as possible from your marketing measurement efforts:

  • Involve the Right People: Create a cross-functional group to pick an approach that balances everyone’s needs and interests, so the approach is fair and equitable for all.
  • Involve Unbiased People: People with no vested interest in which programs get the highest rankings could include an analyst, someone from Accounting, or an independent consultant.
  • Set Clear Evaluation Criteria: Disclose how you will consistently evaluate each program, so everyone knows and plays by the rules.
  • Set Objectives Up Front: This prevents people from later setting lower objectives than they would have up front, thus making both their successes and failures look better.

Whether you need to identify your 20 hottest marketing programs, or which types of marketing spending should be increased or decreased, make sure your measurement methodology gives you the unbiased and opinion-free data and facts you need to make better decisions.

As for the fact I didn’t make Megan’s list, I think if I was at least 20 years younger, 10 pounds lighter, 5 times as athletic, a lot hotter and a world class rower, I could have been a contender. Of course, Megan might have had a different opinion!

Filed Under: Approach, Effectiveness, Objectivity Tagged With: bias, Effectiveness, marketing, Measure, measurement, objective

Sabermetrics & Moneyball

August 18, 2011 By Rick Shea Leave a Comment

While browsing the Sports section of the Toronto Star over breakfast one morning last week, I discovered a baseball statistic I had never heard of before.

Cathal Kelly’s article about the Toronto Blue Jays focused on General Manager Alex Anthopoulus’ fine work in transforming the Jays into a ballclub with great young players and a bright future. In Kelly’s analysis, he also pointed out that the Blue Jays “already have the best player in baseball”, José Bautista, who “leads all of baseball in wins above replacement rankings.”

I’ve followed baseball since I was a kid, but this was the first time I’d heard of “Wins Above Replacement”. Since José Bautista is considered one of the best players in baseball, I guessed it was some sort of composite score that rates a player’s overall performance. Still, I wondered “What the hell is Wins Above Replacement?”

In doing my research, I read up on Sabermetrics, an approach to statistical analysis in baseball that emerged in the 1990s. I read about Billy Beane, the General Manager of the Oakland A’s, who is a leading proponent of using statistical analysis to aid in making decisions about which players to draft, trade or acquire. Billy’s work in this area led to a book being written about him called ‘Moneyball”. I also learned that many teams now employ statistical analysts and Sabermetrics experts.

Sure enough, Wins Above Replacement turns out to be a Sabermetrics statistic that estimates how many more wins a player would give his team as compared to a replacement player of below average quality. While there appear to be a number of formulae used by different Sabermetrics proponents, the principles they follow align nicely with my scorecard approach to measuring marketing programs.

Any Wins Above Replacement formula takes into account a number of batting and fielding performance metrics, weights those metrics appropriately, and tallies everything up to provide one overall score to assess a player’s contribution to team wins. Similarly, a marketing scorecard uses a combination of company, brand, customer and program performance metrics, weighted appropriately, resulting in one overall score to asses a program’s impact on the business.

They both:

  • Have a limited budget (for players or marketing programs).
  • Need to get the most for their money (spending efficiency and effectiveness).
  • Need to get better results than their competitors (win games, make money).
  • Need a way to organize and make sense out of lots of diverse data about the performance of their players/programs and team/company (so they can improve their player/marketing decisions).

This last point is the most important one. A general manager trying to assess the performance of different players on different teams, playing in different ball parks under different conditions, needs a way to organize and then convert all that data into one metric or score that enables rating and ranking players relative to their peers. Wins Above Replacement does that. It may be calculated in different ways by different teams, but so long as each team does its own calculations consistently between players and over time, their comparisons will be meaningful.

The same is true with measuring marketing programs. As a manager with a marketing budget, you need to evaluate the performance of different programs, with different objectives, for different brands competing under different conditions. A well designed marketing scorecard will give you a way to organize, evaluate and convert that diverse data into the single common metric you need to rate and rank each program relative to the others.

Pretend that you’re the Billy Beane of marketing and you need a decision support tool that helps you to organize and make sense of diverse data about a variety of marketing programs. With a scorecard based approach and your considerable wisdom, instincts and experience, you’ll gain the insights you need to improve your marketing effectiveness!

Filed Under: Approach, Effectiveness Tagged With: Effectiveness, Management, marketing, measurement, measuring, scorecard

Opportunity Knocks!

May 19, 2011 By Rick Shea Leave a Comment

Last Saturday at around 5pm I was frantically cleaning my house. I had cleaned the bathrooms, vacuumed, swept and dusted, and was about to wash the kitchen floor when it suddenly hit me. I was wasting my time.

Sensing an opportunity, I wisely settled into my favourite comfy chair, put my feet up and took a nap. This was a much better use of my time than washing the kitchen floor, especially considering the night ahead. Here’s why.

At roughly 8pm that night, the first of 50 or so of my friends would begin knocking on my front door to attend my annual spring party. I knew that many of the 50 would gather in the kitchen.  All those feet would be guaranteed to make for a dirty floor, which I would have to wash again after the party.

The additional benefit of washing that floor before the party would be negligible, at best. I’d feel good about my clean floor (which no one else would notice), but only until all those feet arrived (with friends attached) and began to mess it up. On the other hand, a nap would really boost my energy for the evening.

Excessive investments of time and energy into house cleaning prior to a party are adversely affected by the law of diminishing marginal returns. (Try quoting me if you need to get out of a cleaning chore sometime!) For each extra cleaning investment, you get less and less back in terms of the quality of the party or the guests’ enjoyment of it. While a house needs to be clean enough to be presentable, it doesn’t need to pass the white glove test.

Similarly, investments of time, money and people into marketing measurement are also impacted by diminishing marginal returns. You shouldn’t overspend on measurement and it doesn’t need to be perfect or pass the measurement equivalent of a white glove test. It just needs to be good enough to help you to make better decisions. Consider the following visual:


The vertical axis represents the resources you invest (money, time, people) to measure your marketing. The horizontal axis represents what you learn from those measurement investments that help you to make better marketing decisions, thus improving your marketing effectiveness.

The curve represents my view of the rate at which incremental measurement investments improve marketing decision quality. Generally, the more you invest in measurement, the better your marketing decisions get, but it’s not a straight linear relationship.

Let’s look at this curve in each of the three zones separated by the two red horizontal lines, starting from the bottom zone.

Bottom Zone

  • Characteristics: Starting at zero on both axes, as you begin to measure you very quickly learn things that can improve marketing decisions. Most organizations in this zone have very small marketing budgets, and few resources, so it may not be possible to invest much in measurement, nor are there many marketing decisions to improve.
  • Recommended Strategy: Take advantage of no or low cost measurement tools and internal data. Measure anything and you will likely learn something useful.

Middle Zone

  • Characteristics: Organizations in this “Opportunity Zone” have marketing budgets that are big enough to be worth measuring, and can allocate a small percentage of their budget to measurement. The opportunity in this zone is that small investments pay off quite nicely in the way of improved marketing decisions. The return from better decisions shows up as lower or more efficient marketing expense, and higher revenue and profit.
  • Recommended Strategy:  Consistently apply a disciplined and practical approach to learn what you need to know to improve decisions. Resist the temptation to over invest in the more sophisticated (and expensive) measurement solutions that will bring you closer to the steepening section of the curve where you get a lower return for your incremental investments.

Top Zone

  • Characteristics: Here we see the most severely diminished marginal returns from measurement investments. It takes significant additional investments to yield even the slightest improvements in decisions. Only the largest of organizations with enormous marketing budgets can play successfully in this zone, as small market share gains and sales lifts can be very profitable. Other characteristics of this zone will include a lot of complex data and sophisticated measurement techniques.
  • Recommended Strategy:  Question every bit of measurement spending. Just as there is great opportunity to learn at the lower end of the curve, on the upper end there is equally great opportunity to reduce measurement costs without significantly damaging decision quality.

That’s the way I see the relationship between measuring your marketing and how it helps you to get better results. There are exceptions to every rule, but the law of diminishing marginal returns is one of economics’ most powerful laws, so ignore it at your peril.

Have you identified which zone of the curve you’re in? There are a lot of organizations in the bottom and middle zones, who may not currently measure their marketing, or who aren’t happy with their efforts to do so. If that sounds like your organization, a great opportunity knocks at your door!

In the meantime, if you need me, I’ll be in the kitchen mopping the floor!

Filed Under: Approach, Effectiveness Tagged With: Effectiveness, marketing, measurement, return on investment, ROI
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