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- Measuring the Value of Relationship Marketing
B2B Marketing Confidential | Jul 30, 2010 | Permalink
Relationship marketing, unlike direct marketing, is about cultivating a customer (in the case of B2B, this could mean many different audiences inside one company) over the long-term, and ultimately driving loyalty. Customers’ attitudes change in a positive direction; they become satisfied with the brand; they ultimately perceive the brand to be high-quality, caring, etc. and will stay a customer for life. At least, that’s the idea. The problem with relationship marketing is that you can’t try too hard. The dangers of spamming, coming across false or fake, engaging in only one-way communication, or being too pushy have sunk many well intentioned relationship marketers.Measuring relationship marketing can be a good way to get a handle on how to do relationship marketing right. I’v...
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- Three Ways to Track ROMI
B2B Marketing Confidential | Jul 30, 2010 | Permalink
In keeping with this week's "three ways" theme, here's a framework to track ROMI (return on marketing investment) that can pretty much solve any problem. It's high-level, but it's been very helpful for me over the past couple of months in thinking about a very complex, multi-channel marketing measurement problem.First, Test vs. Control. This means for every direct tactic that you launch, hold out a control group. The control group can be small, but should be selected from the exact same list that you used to generate the campaign. Otherwise, bias can (and will) creep in. Hold out the control list in a "stimulus table" somehwhere in your database. When the tactic has been in market for a long enough time, take a look at the performance of test vs. control customers against a baseline. A...
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- New Year, New Journey
B2B Sales & Marketing Knowledge Sharing | Jul 30, 2010 | Permalink
In Mid-December, I joined a new team—which you could probably figure out by the lack of activity on the blog. Even though I have enjoyed, and learned an incredible amount about sales and marketing during my twelve 12 years with MarketBridge, I came across an opportunity that was too good to miss. For years, the Big 4 (WPP, IPG, Omnicom and Publicis Groupe) had rolled up agencies to create vast global networks with a broad spectrum of services to meet the needs of their global client base. The strategy of following the money and clients had served them well, and it grew the business substantially over the years. However, it left a gap in the market. The “big� focused on big and primarily consumer ad budgets, leaving the complex needs of business-to-business companies unmet. F...
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- Customer Insight Three Ways
B2B Marketing Confidential | Jul 29, 2010 | Permalink
Customer insight is important to marketers for many reasons. Understanding your customers helps you in formulating market strategy. It helps in campaign design. It helps the sales force understand how to approach acquisition targets or retain existing customers. It is the raw material out of which great marketing happens. In the B2C space, customer insight is well understood, and whole industries and many great companies have made it their business. Segmentation schemes that provide predictive lift in product design, creative design, and direct marketing campaigns make billions of dollars a year for companies like Axciom and Claritas. However, in the B2B space, customer insight still has a long way to go. The reason is simple. Companies are a lot more complex than individuals or househo...
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- Verticalizing Internet Marketing
B2B Marketing Confidential | Jul 29, 2010 | Permalink
The hottest thing in direct marketing today is targeting individuals online vs. targeting via publishers or content. The idea that we can "know" a user and target them frees up the 90% of online inventory currently referred to as "remnant" space-- e.g. the space left over after GM, Microsoft and Coke buy the top page banners at Washington Post and NY Times. The remnant space can be just as valuable as the prime space if we only knew who the users were. A user interested in gourmet cooking is still a user interested in gourmet cooking when she leaves the NY Times food page and goes to her hotmail account or to her son's preschool website.Verticalizing the internet is a potential solution. Or rather, verticalizing internet users. The internet is already as verticalized as it's ever...
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- B2B Marketers Fate Rests in the Hands of a Few
Buzz Marketing for Technology | Jun 09, 2010 | Permalink
At the recent ITSMA Marketing Leadership forum I was stunned by a presentation given by Sean Geehan CEO of the Geehan Group author of the upcoming book the B2B Executive Playbook. The big eye opener for me was – B2B marketers are always tasked with getting net new customers when in reality their existing customer [...] Related posts:- 10 BtoB Marketers Predictions for 2010 Around this time last year I wrote about some Predictions...
Inbound Interaction Management (IIM) It’s no surprise that Direct Marketing response rates have dropped...
Customer Service is the New Marketing Zappos was founded in 1999 and sold to Amazon for...
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- Are you investing enough in Sales Research?
ReadyContacts | Jun 02, 2010 | Permalink
B2B demand generation is getting tougher than ever before. Mass marketing is dead. Direct marketing is ignored. Email marketing has turned into a spray and pray tactic. But sales quotes have remained the same and are growing. In this situation, its imperative for every marketer to think outside the box – I know everyone says [...]
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- Measuring the Value of Relationship Marketing
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 over the long-term, and ultimately driving loyalty. Customers’ attitudes change in a positive direction; they become satisfied with the brand; they ultimately perceive the brand to be high-quality, caring, etc. and will stay a customer for life. At least, that’s the idea. The problem with relationship marketing is that you can’t try too hard. The dangers of spamming, coming across false or fake, engaging in only one-way communication, or being too pushy have sunk many well intentioned relationship marketers.<br/><br/>Measuring relationship marketing can be a good way to get a handle on how to do relationship marketing right. I’ve seen a lot of companies troll around for best practices and never truly understand what impact they’re making on customers until they start truly tracking spend, engagement and resultant attitudes.<br/><br/>There are three important components of measuring relationship marketing:<br/><br/><div><ol><br/><li><strong>Develop an RM taxonomy and track spend.</strong> This is basically carving out your vehicles into meaningful categories. It is not tracking campaigns. In fact, a relationship marketing “campaign� is a bit of a misnomer. The goal of RM is to keep consistent engagement going, with no gaps longer than six months. So you want to divide your vehicles up into things that are really different in the mind of customers. I’d also recommend using a hierarchical approach. A simple example is shown below. Once the taxonomy is established, start tracking spend, by audience, at a granular time scale. Weekly is good, but monthly is probably fine too.<a href='http://2.bp.blogspot.com/_30veOO2AATQ/SYzGICU_vHI/AAAAAAAAAEw/jz-t4v1vKks/s1600-h/ExRelMktgTaxonomy.jpg'/></li><a href='http://3.bp.blogspot.com/_30veOO2AATQ/SYz9GKRQViI/AAAAAAAAAE4/6yO4QvzzBqk/s1600-h/ExRelMktgTaxonomy.jpg'><img src='http://3.bp.blogspot.com/_30veOO2AATQ/SYz9GKRQViI/AAAAAAAAAE4/6yO4QvzzBqk/s400/ExRelMktgTaxonomy.jpg' id='BLOGGER_PHOTO_ID_5299889143786001954' border='0' alt='' style='width: 400px; cursor: hand; height: 216px;'/></a><br/><br/><li><strong>Track engagement.</strong> Engagement is different than spend. Spend will be really useful to track ROI, but engagement tracks two-way interactions. Use the same taxonomy you use for spend, but this should be the actual interactions with the customers. Engagement is an “in process indicator� for the success of relationship marketing. It is a good leading indicator for success, and can be tracked frequently, giving marketers frequent updates on their efforts. Important: Don’t just track outbound activity—track both inbound and outbound. People in relationships talk to each other, at least those whose relationships last. It’s also a good idea to track reach over a total audience.</li><br/><br/><li><strong>Track core attitudes and the ultimate attitude.</strong> Core attitudes and perceptions need to be determined by market research. I talk about SEM and how to do this <a href='http://b2bmarketingconfidential.blogspot.com/2006/10/media-mix-part-2-long-term-effects.html'><strong>here.</strong> </a>But once these attitudes are defined, these should be considered as the ultimate goal of RM. Advertising has an effect too, so these metrics will be shared, but people in good relationships feel good about their partners. It’s important to track both the “ultimate attitude�—something like net promoter—and predictor / component attitudes that marketers can message too. Once again, the goal is to provide guidance back to marketers on where they should be re-mixing their efforts.<br/></li></ol><p><br/>With the three above metric families in place, relationship marketing can become much less of a mystery. Tactics can be chosen on the basis of empiricism vs. gut feel, and companies can truly improve their relationships with customers. After a time, you’ll realize that your taxonomy for parsing out vehicles can be improved. Core attitudes measured will also change with changing business objectives and customer landscape.</p></div><div class='blogger-post-footer'><img src='https://blogger.googleusercontent.com/tracker/36395142-209319693321086707?l=b2bmarketingconfidential.blogspot.com' height='1' alt='' width='1'/></div>
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![](http://digg.com/submit?phase=2&url=http://b2bmarketingconfidential.blogspot.com/2009/07/three-ways-to-track-romi.html&title=Three-Ways-to-Track-ROMI&bodytext=In keeping with this week's "three ways" theme, here's a framework to track ROMI (return on marketing investment) that can pretty much solve any problem. It's high-level, but it's been very helpful for me over the past couple of months in thinking about a very complex, multi-channel marketing measurement problem.<br/><div/><a href='http://1.bp.blogspot.com/_30veOO2AATQ/Smm8FzeuzbI/AAAAAAAAAFQ/1-QE7wVPc-E/s1600-h/ThreeElementsofEffectiveness.jpg'><img src='http://1.bp.blogspot.com/_30veOO2AATQ/Smm8FzeuzbI/AAAAAAAAAFQ/1-QE7wVPc-E/s400/ThreeElementsofEffectiveness.jpg' id='BLOGGER_PHOTO_ID_5362023639265758642' border='0' alt='' style='width: 400px; height: 239px; cursor: hand;'/></a><br/><div><strong>First, Test vs. Control. </strong>This means for every direct tactic that you launch, hold out a control group. The control group can be small, but should be selected from the <em>exact same list</em> that you used to generate the campaign. Otherwise, bias can (and will) creep in. Hold out the control list in a "stimulus table" somehwhere in your database. When the tactic has been in market for a long enough time, take a look at the performance of test vs. control customers against a baseline. A good baseline to use is "90 days prior". You can also use "vs. last year" but here you have to watch to make sure that there isn't a disproportionate percentage of customers in either list that weren't active in that time period.</div><br/><div><strong>Second, Opt for Customer Lifetime Value or Customer Data When Measuring Return. </strong>It's always better to take a look at customer dynamics vs. simply total sales. For example, if I'm doing test-control analysis, I'm much more interested in understand how many customers I acquired, lost, what my impact was on average transaction size, and ultimately what my impact was on CLV than just total sales for the population for that period. Disaggregating gross sales performance into customer-specific data yields huge insights. This is particularly true of subscription or repeat-order businesses. </div><br/><div><strong>Third, Econometric Forecasting with a Marketing Component. </strong>Putting all of your data into a time series database and understanding the contribution of each marketing tactic to return is the final step. This can work in a direct marketing, advertising, or "mixed" environment. The first step is to leave the marketing stimulus out--build a forecasting model for key independent variables, namely total revenue, new customers, lost customers, and average transaction size (and potentially price as well). Explain as much of the variance as possible using autoregressive terms (seasonality, etc.) and extrinsic data (competitive actions, GDP, business confidence, etc.) When you have a good model, add in marketing stimulus, using appropriate adstocks / decay rates. This should yield a good model for understand what elements of marketing are driving what elements of return.<br/></div><div>Taken together, these three marketing measurement techniques can enable a "test and learn" culture at your organization.</div><div class='blogger-post-footer'><img src='https://blogger.googleusercontent.com/tracker/36395142-3024653615985211931?l=b2bmarketingconfidential.blogspot.com' height='1' alt='' width='1'/></div>
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</div>)
 had rolled up agencies to create vast global networks with a broad spectrum of services to meet the needs of their global client base. The strategy of following the money and clients had served them well, and it grew the business substantially over the years. </span></div><div style='font: 10.0px Verdana; margin: 0.0px 0.0px 0.0px 0.0px;'><span class='Apple-style-span' style='font-size: small;'><br/></span> </div><div style='font: 10.0px Verdana; margin: 0.0px 0.0px 0.0px 0.0px;'><span class='Apple-style-span' style='font-size: small;'>However, it left a gap in the market. The “big� focused on big and primarily consumer ad budgets, leaving the complex needs of business-to-business companies unmet. For business-to-business companies, having a big ad budget isn’t necessarily as important and/or effective as targeted, highly customized one-to-one communication,…but it does matter to big agencies. </span></div><div style='font: 10.0px Verdana; margin: 0.0px 0.0px 0.0px 0.0px;'><span class='Apple-style-span' style='font-size: small;'><br/></span> </div><div style='font: 10.0px Verdana; margin: 0.0px 0.0px 0.0px 0.0px;'><span class='Apple-style-span' style='font-size: small;'>A few smart folks, including </span><a href='http://www.btobonline.com/apps/pbcs.dll/article?AID=/20090720/FREE/907179953/1193/whoswho-agencies'><span class='Apple-style-span' style='font-size: small;'>Rick Segal</span></a><span class='Apple-style-span' style='font-size: small;'>, CEO of the former HSR Business to Business headquartered in Cincinnati, and </span><span class='Apple-style-span' style='font-size: small;'>Richard Glasson</span><span class='Apple-style-span' style='font-size: small;'>, CEO of Gyro International, out of London, recognized this opportunity and the need for a new agency model. </span></div><div style='font: 10.0px Verdana; margin: 0.0px 0.0px 0.0px 0.0px;'><span class='Apple-style-span' style='font-size: small;'><br/></span> </div><div style='font: 10.0px Verdana; margin: 0.0px 0.0px 0.0px 0.0px;'><span class='Apple-style-span' style='font-size: small;'>The group has been busily assembling a collection of best-in-class B-to-2B agencies with services ranging from traditional direct marketing to leading-edge digital shops. The agency, now called </span><a href='http://www.gyrohsr.com/'><span class='Apple-style-span' style='font-size: small;'>GyroHSR</span></a><span class='Apple-style-span' style='font-size: small;'>, combines the names of two leading, <a href='http://www.gyrohsr.com/news/gyrohsr-receives-grand-ceba-creative-award'>awarding-winning</a> agencies. </span></div><div style='font: 10.0px Verdana; margin: 0.0px 0.0px 0.0px 0.0px;'><span class='Apple-style-span' style='font-size: small;'><br/></span> </div><div style='font: 10.0px Verdana; margin: 0.0px 0.0px 0.0px 0.0px;'><span class='Apple-style-span' style='font-size: small;'>Customer feedback on the new agency model pointed to the need to add greater expertise and experience in understanding channels. With the noise and confusion surrounding Web 2.0, and the necessity to increase precision with marketing investments, adding a new team member was essential. </span></div><div style='font: 10.0px Verdana; margin: 0.0px 0.0px 0.0px 0.0px;'><span class='Apple-style-span' style='font-size: small;'><br/></span> </div><div style='font: 10.0px Verdana; margin: 0.0px 0.0px 0.0px 0.0px;'><a href='http://3.bp.blogspot.com/_sTe-XmR7Luc/S2riZU0tWMI/AAAAAAAAAYE/bGZw_2oUMWQ/s1600-h/Slide1.gif' style='clear: right; float: right; margin-bottom: 1em; margin-left: 1em;'><img src='http://3.bp.blogspot.com/_sTe-XmR7Luc/S2riZU0tWMI/AAAAAAAAAYE/bGZw_2oUMWQ/s320/Slide1.gif' border='0'/></a><a href='http://4.bp.blogspot.com/_sTe-XmR7Luc/S2n_t7SxfOI/AAAAAAAAAX8/nLKBmp1yu3U/s1600-h/Slide1.jpg' style='clear: right; float: right; margin-bottom: 1em; margin-left: 1em;'><span class='Apple-style-span' style='font-size: small;'/></a><span class='Apple-style-span' style='font-size: small;'>That’s where I come in. My role on the team is to add a bit of some little left-brain thinking to the right- brain creativity, blending the best of the art and science worlds. </span></div><div style='font: 10.0px Verdana; margin: 0.0px 0.0px 0.0px 0.0px;'><span class='Apple-style-span' style='font-size: small;'><br/></span> </div><div style='font: 10.0px Verdana; margin: 0.0px 0.0px 0.0px 0.0px;'><span class='Apple-style-span' style='font-size: small;'>I’m starting a <a href='http://www.gyrohsr.com/news/gyrohsr-launches-channel-marketing-capability'>new practice</a> that will focus on helping clients better understand how customers buy and what channels they prefer to use during that process. The Channel Marketing practice is going to be based in a new Washington, D.C. office, opening this month.</span></div><div style='font: 10.0px Verdana; margin: 0.0px 0.0px 0.0px 0.0px;'><span class='Apple-style-span' style='font-size: small;'><br/></span> </div><div style='font: 10.0px Verdana; margin: 0.0px 0.0px 0.0px 0.0px;'><span class='Apple-style-span' style='font-size: small;'>Over the next few months, I’ll be tweeting and posting about my assimilation into the new world of art. My “online diary� should provide an interesting view into the agency world through the lens of a left-brain consultant. I can tell you this already: We definitely do see the world differently, not better or worse. Just differently. Stayed tuned. It should be an interesting journey. </span></div><div style='font: 10.0px Verdana; margin: 0.0px 0.0px 0.0px 0.0px;'><span class='Apple-style-span' style='font-size: small;'><br/></span></div><span class='Apple-style-span' style='font-size: small;'><br/></span><br/><div class='separator' style='clear: both; text-align: center;'><br/></div><div class='blogger-post-footer'><img src='https://blogger.googleusercontent.com/tracker/5066045252169973135-3302211465400406042?l=b2bknowledgesharing.blogspot.com' height='1' alt='' width='1'/></div>)
![](http://digg.com/submit?phase=2&url=http://b2bmarketingconfidential.blogspot.com/2009/07/customer-insight-three-ways.html&title=Customer-Insight-Three-Ways&bodytext=Customer insight is important to marketers for many reasons. Understanding your customers helps you in formulating market strategy. It helps in campaign design. It helps the sales force understand how to approach acquisition targets or retain existing customers. It is the raw material out of which great marketing happens. <div/><br/><div>In the B2C space, customer insight is well understood, and whole industries and many great companies have made it their business. Segmentation schemes that provide predictive lift in product design, creative design, and direct marketing campaigns make billions of dollars a year for companies like Axciom and Claritas. However, in the B2B space, customer insight still has a long way to go. </div><div/><br/><div>The reason is simple. Companies are a lot more complex than individuals or households. For one thing, companies can be very small--say one worker--or very large. For another, companies have different locations with different functions. Capturing all of this diversity is difficult. </div><a href='http://4.bp.blogspot.com/_30veOO2AATQ/SmXJkkFy8YI/AAAAAAAAAFI/5Uz11VofPzo/s1600-h/ThreeAudiences.jpg'><img src='http://4.bp.blogspot.com/_30veOO2AATQ/SmXJkkFy8YI/AAAAAAAAAFI/5Uz11VofPzo/s400/ThreeAudiences.jpg' id='BLOGGER_PHOTO_ID_5360912561454903682' border='0' alt='' style='width: 400px; height: 242px; cursor: hand;'/></a><br/><div/><br/><div>A good way to start simplifying the customer insight question in B2B is to focus on three key dimensions. First, <strong>what products are companies buying</strong>? Second, how is the company structured from a <strong>decision making perspective</strong>? Third, what <strong>information channels</strong> do decision makers and influencers in the company use to make decisions? This simple triad--product / audience / channel--can be very helpful as a "check off" list when thinking about marketing strategy. How would this approach work in a simple marketing campaign to say, sell a new type of tool to construction companies?</div><div/><br/><div>First, the <strong>product dimension</strong> kicks in. What companies currently have similar tools? What types of industries would need this tool? If the tool is very expensive, is there a lower bound on company size? A marketer could use data on product sales to build a predictive model of the most likely firms to purchase this new tool. It's important to note than in most cases, the product dimension is relevant at the firm and not the contact level.</div><div/><br/><div>Then, the <strong>audience</strong> <strong>dimension </strong>comes into play. Who is going to make the decision to purchase this tool? Are there key influencers to the purchase, the actual users of the tool? What are the features of the tool that will be most appealing to them? A marketer could create a contact strategy that hits each audience with the selling points that make the most impact--price on the buyer, value on the CFO, features on the users, for example. </div><div/><br/><div>Finally, the <strong>channel dimension </strong>is used to understand how marketing and sales should be executed. Do buyers and influencers read a specific type of publication to understand more about this family of tools? Are there influential communities that they listen to that we need to plug into? Are there key distributors that must carry the product for it to penetrate the market?</div><div/><br/><div>Of course, getting customer insight--the raw information--across these three dimensions is difficult. Doing this requires at the very least a qualitative market research study. However, by beginning to think in terms of these three dimensions, marketers will make better decisions and begin to collect information on their B2B customers that they can use over and over again.</div><div class='blogger-post-footer'><img src='https://blogger.googleusercontent.com/tracker/36395142-959196577683935418?l=b2bmarketingconfidential.blogspot.com' height='1' alt='' width='1'/></div>
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