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Measuring the effect of

your marketing – the


principles of ROMI
Contents and intellectual property

• The content in this presentation is the intellectual property


of Michael Leander Nielsen.
• You are welcome to ”borrow” models and/or slides, however
only with the explicit accept from the rights owner.
Contact me – mln@customaxi.com - if can be of help.
This is what I have chosen to cover today

1. Bits and pieces with an objective to provide at least 1


useable idea for each of you. A collection of thoughts
and input

• Segment your customers, align sales and buying processes


• Thoughts on a focused setup that will enable you to make
the right marketing investment decisions
• Understand where to spend your money wisely, and how
you can improve effect and ROMI (Return on Marketing
Investment)
• Tools to make it happen
• Questions and answers
Michael Leander Nielsen

Current Role:
• CEO, Customaxi
Nationality:
• Danish
Expertise:
• Permission Marketing, Marketing Lifecycle Management
Automation, CRM, Direct Marketing, ROMI, Experience
economy, Performance Marketing
Background:
• CEO - Globase
• CEO - Leandersen
• Sales/Marketing Director - Kometh
• CEO and VP Sales/Marketing - Janna Systems Nordic
• Marketing Manager - SMG - Santech Micro Group
• Country Manager - SuperOffice
The Marketing Vision
What is your marketing vision?
How do you propose to deliver excellent
Customer Experiences?

The Movie
Customer orientation – outside in

Traditional segmentation is no longer Treat each customer differently


viable for maximum success
The goal for any marketer in 200x?

Relevant offer A B C D

Target

Effective channel

Right timing 22/1


1
No more miracles?
Setting your focus

Different
Define your focus

• What do you want to achieve


– Awareness
– Sales
– Repeat sales
– Acquire new customers

• How are you going to prioritize?


– New business/acquisition
– Repeat business/retention

• Decide and define your critical few objectives


Marketing Focus 2007

Production, fulfillment, datamining and


marketing analytics

Acquisition Retention

CRITICAL FEW CRITICAL FEW


OBJECIVES OBJECIVES

Acquire trial members Convert trial members to active


- Drive traffic to landing pads
- Convert traffic to signup members

Stimulate referral and handle referral


Build link popularity
- Increase Google Page Rank flows with objective to convert to
member

Increase SEO presence Drive lifecycle marketing processes


- Ensure top placement on relevant with customer development, retention
Search engines and churn prevention in mind

Online PR and advertorials Cross- and upselling activities

Build affiliates Promotions and experiantal


strategic and promotion oriented
Acquisition payment model and brand/service preference building
Revenue share models activities10#
Segmenting customers and
prospects
Loyalty steps
Fan / Partner

Spokesman

Customer

Trial Buyer

Prospect

Suspect

Loyalty level
Dissatisfied

Terrorist
www
.lort
e tryg
.dk
Prospect RETENTION
WEB SITE REFERRALS UPSELLING

CROSS SELLING

EARNING POTENTIAL/VOLUME – SHARE OF WALLET


# OF BUSINESSES/CONSUMERS

PROSPECT
PROSPECT with
with need
Target TRIAL
SUSPECTS PROSPECTS need and C B A
Market BUYER
budget

4
3 5
2 6
1 7
8

INCUBATIONTIME

© Michael Leander Nielsen, 1998-2007


How to best spend your marketing dollars?

Cost per CPM (cost per Conversion # actions Cost per


contact 1.000) action

Canvas 1.400,- 1.400.000,- 20% 200 7.000,-


salgsbesøg
Telemark. 190,- 190.000,- 5% 50 3.800,-

Letter 35,- 35.000,- 2% 20 1.750,-

E-mail 15,- 15.000,- 0,75% 7,5 2.000,-

SMS/MMS 7,- 7.000,- 0,15% 1,5 4.667,-

Website ? ? ? ? ?
Marketing mix

Acquisition Convert Retention Win-Back


HIGH

Loyalty
Value

St
Program x im
Sell us ulat
e e

b site Newsletters
W e Win-Back
Search
LOW

Life cycle of customer


Marketing Metrics - Goals

Acquisition & Retention


Historical facts – learn from them !
• USD 20.000 acquisition
cost on the B2C market
– Is that a good investment?
– What about LTV?

• Perhaps the marketing dollars


could have been spend more
efficient? !

• Positive = easy to improve


the acquisition cost
What do you need to measure?
• Cost per contact/cost per interest (CPI)
– The cost to reach a potential customer/customer
– The cost to receive an interest/indication from a prospect or
customer
• Customer acquisition cost?
– The cost of acquiring a new customer relationship
• Cost per order? (CPO) ?
– The cost of attracting an order
• Customer lifetime value? (LTV)
– The value of a customer throughout the course of the
customers lifetime relationshop with you
• Customer referral impact?
– The value of customer referrals
• Share of wallet?
– The volume placed with you as a percentage of the customers
total purchasing budget (i.e. you sell 100K, customer
purchases goods worth 200K, your share of wallet is 50%)
Acquisition funnel – from offline to online

Offline to
website Download
page Download
TV/Radio succes Registration
Trial
Buyer Purchase
Print

10% 50% 75% 90% 70% 25% CPO


Outdoor = DKK
150
CPI
Direct mail = DKK
100
• Measure conversions
• Measure concrete actions
Effectiveness of Marketing Techniques used by
Marketers to drive web-site traffic
eMail to Customers 4,1
Affiliate Programs 3,8
Direct Mail 3,4
Television 3,2
Public Relations 3,1
Banners 2,8
Magazines 2,7
Sponsorships 2,7
Radio 2,6
Newspapers 2,6
eMail to opt-in lists 2,5
0 1 2 3 4 5

Source: Forrester Research


Measuring website metrics

… simple sample
How you can measure the success of your
website

$ værdi

25
Customers
Customer data
75 Response

250 Prospects
e-business
data
800 Visitors

3.000 Page views


Raw-
29.000 Hits data
Metrics - website

• Bouncerate from primary entry points


– Frontpage
– Secondary level pages indexed on search engines
• Most wanted response conversions
– What do you want people to do?
– How many perform that action?
• Unique visitors
– First time visitors
– Repeat visitors
– Visitor loyalty will differ a lot
• Conversion funnels
– Define a number of conversion funnels
– www.customer2o.com
Sample

What needs to be considered


Tools to make it happen

IndexTools – webanalytics, free 2 week trial


Exact Target – email marketing tool
CRM tools such as www.salesforce.com and others
Thank You

Contact
Michael Leander Nielsen
mobile: +45 27 28 29 53
mln@customaxi.com
www.customaxi.com