If you could take $1,000 out of the bank, invest it for 60 days and get back $2,000, would you? What if you could get back $10,000? Or $50,000? Of course you would--it's a no brainer! And that's why marketing is so important in a recession.
Companies that invest in marketing during a downturn gain four and a half times more market share than their competitors who do not invest in marketing. But of course, when business is tight, the last thing you can afford to do is waste money. So how can you make sure you're getting the best bang from your marketing buck? It's simple. Measure everything!
Measure Your Marketing
The beauty of marketing is that just about everything you do can, and should be measured. While every marketing activity may not translate into immediate sales, there are things you can do to measure the results of all of your activities.
Tracking Tools You Can Use
Here are some examples of useful tools to measure the results of your marketing campaigns:
Direct Mail Campaigns
- Coded response forms Each piece of direct mail has a response form with a unique code, so that every response can be tied to a specific campaign.
- Keyed phone numbers This is a special unique phone number that is only used in a specific campaign, allowing you to measure the exact response to that campaign. Oftentimes the phone company offers analytical tracking tools that give detailed information on the calls received at the keyed number.
- Campaign-specific landing pages Your direct marketing can drive people to a single web page or mini-website created specifically to coincide with the campaign. Using web analytics (such as Google Analytics, which is free) you can see how many people your marketing drove to the web page.
- PURLs (Personal URLs) Your marketing pieces direct recipients to a web page with a URL that is unique to each recipient (e.g., www.abcstaffing.com/JohnDoe). With a PURL, you can track everyone who reacted to your mailer or other direct marketing.
- E-mail statistics Many e-mail campaigns offer reporting such as open rate, click-thru rate, and opt out rate.
- Website analytics Tools like Google Analytics can help you track the volume of traffic your marketing is driving to your website--and how those people are using your site.
Assessing the return from a sales-oriented mail campaign can be relatively easy. Just add up the costs of producing the campaign and compare it to the sales generated. Coded response forms, PURLs, landing pages, and keyed phone numbers can be used to measure the exact response to a specific direct mail campaign.
But what about campaigns that don't result in direct sales? Here are some metrics you may want to track:
The secret to effective direct mail is to set specific goals, determine the minimum level of response you will find acceptable, and then track the most appropriate results. Of course, you'll have to create the right tracking tools. For example, you could:
- Number of inquiries or responses
- Number of appointments generated
- Number of qualified sales leads produced
- Cost per inquiry
- Cost per appointment
- Cost per qualified lead
- Convert your mailing list into a tracking spreadsheet.
- Set specific follow-up dates, and closely track activity by each sales rep. Click here for a free sample direct mail results tracking form.
- Mail in batches so that your sales reps can easily follow up with every prospect.
- Compare call to appointment ratios for all sales reps. If one rep is excelling, determine what tactic they are using that is making them so successful.
- At the end of the campaign, or at set intervals such as the end of each month or quarter, review your tracking spreadsheets to determine:
- How many appointments were set.
- How many sales were generated.
- The full value of those sales plus full lifetime value.
The great thing about e-mail marketing is that most e-mail marketing tools come with built in reporting features that allow you to measure the effectiveness of the campaign. Here are a few measurements you can track:
- E-mail open rate The percentage of recipients who read your e-mail.
- E-mail click-thru rate The percentage of recipients who click on a link in your e-mail to visit a web page.
- Inquiry rate The percentage of recipients who complete a form.
- Opt out rates The percentage of recipients who ask to be removed from your mailing list.
***Real World Example***
One of our clients recently sent out an e-mail as part of their HaleyMail program that listed some of the top candidates they had available. They were amazed at the response they received. 23% of the 762 recipients opened the e-mail, and within a day of sending out the e-mail they received four job orders including one for a $135K position for their IT division! They have added a top candidates portion to their regular monthly newsletter.
Advertising has the ability to be measured effectively using sales response tools such as keyed phone numbers and landing pages which isolate the response to the specific campaign.
However, with advertising, your ROI may be greater than the immediate response. A sustained ad campaign can increase awareness of your firm, effectively position you against local competitors, and make your sales efforts more productive. While this can be harder to measure, you can look at your sales per rep for the months before, during, and after your ad campaign to see if there is a correlation between advertising and revenue.
Client Retention Campaigns
Calculating ROI for client retention campaigns can be tricky. These campaigns emphasize customer satisfaction and retention, rather than direct response. While retention campaigns may not directly solicit sales, they can be more important than your new sales efforts to your long-term success. It is estimated that 80% of your sales come from 20% of your customers, so retaining your best customers is vitally important. And remember, it costs six times more to win a new client than it does to keep an existing one. Furthermore, if you engage your prospects in relationship marketing you can grow your customer base.
While it can be difficult to quantify results of retention marketing, there are some key figures that you can analyze to see if your marketing is effective. Over the long run, you can look for trends in the following key metrics:
- Client retention rate
- Average annual sales per client
- Annual percentage increase in sales per client
- Referral rate This is a measure of the client or candidate leads that come from referrals. With relationship marketing, the trend should show an increase.
- Lifetime value ROI This is a measure of the lifetime profit contribution for a specific client divided by the average cost of the relationship marketing campaign.
***Real World Example***
Haley Marketing Group has a client that is effectively using a client retention e-mail campaign to engage their second-tier clients. While they employ their sales reps to sell strategically to key accounts, they use a monthly newsletter to stay top-of-mind with accounts that have stopped using staffing services. They have seen their sales reps' productivity increase, and have been able to stay in front of the second-tier accounts. They have seen increased business from these accounts as a result of nurturing the relationship rather than attempting to sell to them when they are not ready to purchase staffing services.
Website ROI can be difficult to quantify. Very few if any clients will ever tell you that they are using your firm because of your website. However:
While it may be difficult to ascertain the exact ROI from your website there are some measures that can be taken:
- Nearly 95% of prospects will check out your website BEFORE agreeing to a meeting with you.
- More than 90% of candidates will review a company's website before applying for a job.
- One in four candidates will decide NOT to apply with a company because of their website.
- Offer response - An offer with an online reply form is an effective way to measure client response.
- Job board - Measuring job applications from your job board will allow you to see how well you are engaging your candidates.
- Cost/candidate - Computing cost/candidate in relation to other mediums is an analytical way to measure your site.
- Retention and fall off rate - Google Analytics can tell you how long visitors stay on your site and how many pages they visit (Google Analytics can also be used to measure the effectiveness of any SEO initiatives that you enact).
Remember, none of your sales and marketing efforts are done in a vacuum, so it can be difficult to come up with an exact ROI for many of your initiatives, but if you use the tools in this article you should be able to analyze the results of your campaigns more effectively.