Category Archives: Marketing ROI

How to measure awareness advertising

If customers don’t know you exist your chances of attracting them are the same as trying to teach an elephant to tap dance.

This is the first rule in marketing – make sure your potential customers are aware of who you are, what you stand for and how you can help solve their problems.

However it is much easier said than done. These days the media choices can be overwhelming, check out the image below that identifies the different social media options alone!

Social Media Map from Brian Solis and JESS3

Source: Brian Solis and JESS3 http://www.theconversationprism.com/

Add to this social media mix, the traditional media – TV, print, radio and billboards and you have some difficult decisions to make.

Where should I invest to generate maximum awareness for minimum cost? and How will I know whether these investments are paying off?

Deciphering the impact of advertising is notoriously difficult, there is a classic saying in advertising circles attributed to the father of advertising, John Wanamaker who said:

“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

Awareness advertising is designed to widen the pool of potential customers and remind them of how you can help them. The goal is to position a company’s brand favorably and regularly in the customer’s mind.

The measurement challenge comes from the fact that it is not necessarily designed to elicit an immediate response. Regardless there are a few ways you can get a handle on the impact of this type of advertising:

1. Prospect Surveys Before and After Comparisons

This technique involves establishing a baseline and then comparing results against that baseline over time.

For example, a simple survey may highlight that 10% of prospects have heard of your brand and 15% may consider you as a potential supplier of the product. The consideration metric is an important one to include as we are not interested in awareness alone. We really want to know whether we are in the “evoked set” – the top 2 or 3 brands customers have as top of mind for any particular product category.

Asking these questions again in 3 months may reveal that now 25% of prospects have heard of your brand and 30% of them would consider you as a potential provider.

You can reasonably conclude that your advertising activities were a significant driver responsible for the increase.

2. Asking Customers at their Point of Inquiry

Many companies will ask a new customer how they heard of the company or product. This is a great technique for companies that get a lot of inbound calls, a quick question can be asked at the end of the call to which most customers are happy to respond.

To go a little deeper a survey can be conducted asking customers which specific media they remember seeing. Their answers won’t tell you whether the activity influenced their purchase, but it will tell you which of your awareness advertising activities are being noticed.

To understand the advertising’s influence, we can design questions to elicit feedback on the messages sent.

For example “which of the following ads have you seen?, which haven’t you seen?, rank each on a scale of 1 to 5 on whether it appealed to you or not.

Next total up the answers from all survey takers to give you a clear picture of how people perceive your advertising.

NOTE: Where ever possible please do some of this in pre-testing to make sure you are eliciting the response you want!

A new way to innovate and get funded

Customer Focused Innovation

One of the biggest challenges in businesses is determining whether your new product or service actually fills a need. It maybe a cool product, you may like it yourself but if no one will pay money for it, its just a hobby.

There are some really interesting emerging online businesses designed to help entrepreneurs with just this problem.

Kickstarter is one site that has received significant exposure thanks to the incredible success of the Pebble Watch project. Essentially a smart watch that connects to your iPhone apps so you can control music, view text message, get news feeds right on your wrist.

The project raised almost $3 million in 3 days from its “backers”, essentially its future customers and supporters. When the project finally closed it had over $10 million in pledges that was used to get the business off the ground and get production going. In return for the pledges the backers will receive the first editions of the final product.

What’s great about this approach is how it leverages social media and the online world to get projects in front of supporters and early adopters and asks them to commit funds upfront.

We know from working in market research that a lot of potential customers say they like a new product idea but when it comes to actually purchasing they don’t follow through. This is a great way to get commitments to a project before invest time and money.

Another cool success story comes from Scott Wilson a designer of the Apple Nano wrist band. Experts told him it would never work, no one would pay a high price for a premium wrist band for the Nano.

The Nano Wrist Bands

Within a month Scott raised more than $1 million dollars to fund production and a large number of the wristbands sold at twice the price predicted by experts, $79. In fact 76% of customers said they purchased the Nano because of the wrist band, now that got Apple’s attention!

Kickstarter is only available to entrepreneurs in the US at this stage so some other alternatives are listed here ( I found this list on Quora):

FundedByMe.com is a successful Nordic platform for crowdfunding that will soon add the element of equity crowdfunding
StartSomeGood.com – a kickstarter-like platform for social good initiatives globally.
PleaseFund.Us – pretty similar to Kickstarter but in the UK, using paypal
IgnitionDeck.com – A crowdfunding plugin for WordPress.
Indiegogo.com – Just like Kickstarter, but with more options.
Crowdfunding-Website-Reviews.com – A site devoted to reviewing kickstarter alternatives
http://haricot.ca (English and French, open to all)
Fundly.com – “Crowdfunding Platform for Social Good” “

Source: Quora

Prioritizing Customer Experience Investments

Investing in Customer Experience

Making deliberate efforts to improve the customer experience can require significant investments. So how do you decide on which customer experience investments to make?

It begins by understanding the existing customer experience for a defined group of customers and asking the following questions:

1. What does the customer journey for purchasing our products look like? In other words where do customers generally begin to investigate solutions for the problems we solve? What process do they go through and where does it end?

For example: I really need a new TV so I begin my search online, I look at manufacturer’s websites, I look at Amazon to get ratings on different models and I may go down to Best Buy to take a look in person. I may chat with friends, ask questions on forums and read professional reviews. This is the search phase.

Once I have decided on the product, I need to decide how to purchase it. In today’s world I have a myriad of options, multiple retailers both in store and online. This is the purchasing phase.

When I make my purchase the product is then delivered and I can ether set it up or have it installed. This is the installation/setup phase.

Once I have the product up and running I can watch TV and hopefully it meets my expectations on the things important to me when I made the purchase decision. This is the usage phase.

If all goes well no problem, but if there is a technical problem with the TV what then? This is a real test for the supplier, how will they respond to a technical issue, how will I be treated. This is the product failure phase.

After a number of years I will feel a urge to upgrade or add another TV and the cycle begins again. This is the disposal and repurchase phase.

2. What are the most important interaction points we have with these customers?  In other words where do we have the most influence?

By examining these interaction points we can evaluate how we perform versus our competitors. For example in the search phase above we need to understand which factors have the largest influence on our customer’s purchase decisions? How important is the brand, how about word of mouth, magazine reviews, our website etc.

Once we understand the levers we need to understand how we are performing on those levers. Are we perceived as a stronger brand? Do we offer more ways to purchase? Is our website clearer and easier to use?

Making the investment decision:

Once we have a clear picture of how customers buy, what influences them and how we perform on those factors we can make a more informed decision by asking the questions:

1. Are we losing business because we are not performing well in some element of the search phase?

2. Is there an opportunity to differentiate ourselves in a meaningful way during the search phase?

This process can be applied to each part of the customer’s journey. Some investments need to be made to keep up with the competition, whereas others will be opportunities to create a differential advantage.

All of these decisions will ultimately be made in the context of the organization’s overall vision, mission and strategy. In other words price leaders will generally only be interested in keeping up with the basic expectations of customers when it comes to the overall experience. As their customers want the lowest price they don’t expect much more. Companies with a product leadership strategy will be looking to provide high level experiences that complement their premium quality, innovative products.

How are you deciding on what customer experience investments to make?

3 ways to secure senior management buy-in and use it to establish a customer-centric culture

Image from John Kotter's Great Book on the Subject of Buy-in

One of the greatest challenges for customer experience executives is gaining buy-in for investments in improving the customer experience.

Customer experience can seem like a never ending intangible problem that is too hard to deal with given the necessity to focus on driving quarterly numbers.

Unfortunately the result is like driving a car as fast as you can until its empty, at some point the car runs out of fuel and it is crisis time. For a business this means losing customers and losing the ability to attract them back to the business without significant price concession leading to lower profitability.

Creating a customer centric culture is a capability building process for the organization; it is the ongoing improvement and refinement of value for its customers.

So what does this mean for gaining buy-in? Ultimately the leadership needs to buy-in to the idea that shaping the culture in a way that is customer centric is the only way to ensure a legacy for themselves and the company. In short executives with a short-term view will never prioritize culture change as they are already thinking about their next role. Why train for a marathon when you are only running a 5k?

For those executives with a longer-term view, here are 3 ways to get buy-in

1. Link the Customer Experience Strategy to Corporate Strategy and the bottom line

The executive team and the CEO are ultimately responsible for driving profitable growth and return for investors. The corporate strategy for most firms involves growth. Where does that growth come from? Customers.

A customer experience strategy that results in customers staying with the company for longer, buying more and newer products, becoming advocates and reducing the cost to serve will drive growth. If customer experience professionals can show how the customer experience strategy will drive these things they will get executive buy-in.

2. Define the Cost of Quality

What is the impact to the organization of poor customer experience and quality?

  • Customers leave or churn
  • Customer have to call more often to have the needs met
  • Employees leave
  • Brand/image
  • Customer complaints increase demonstrating weakness in organizational performance

3. Data-Data-Data!

  • Determine the propensity to switch, which customers are at risk of leaving and what would it cost if they did?
  • Measure your company’s level of customer centricity and benchmark best in class companies.

Measuring your company’s Market-Driven Culture: There’s an app for that!

MarketCulture App

The MRI Circumplex - shows a company's customer culture

With all the talk these days about customer experience and increasing customer focus etc… it always amazes me that there is no internal measure of customer focus.

The only way for businesses to thrive in the turbulence and increasing complexity of today’s marketplace is to have deep ongoing customer insight.

What gets measures gets done and without good metrics there is no way to track progress or really understand what success will look like.

This was the major driving force behind the creation of the Market Responsiveness Index (MRI).

If you are a leader that really wants to drive customer focused change in your organization there is no other leadership tool available!

Are you focused on your customer’s profit producing behaviors?

Show me the money!Do you know which of your customers are profit producers?

It’s a great way to think about that core group of customers that really drive your business forward. These are typically what we think of as our most loyal customers, our advocates and what they do can be more powerful that the best sales team in the world.

For starters they buy your products more frequently and at higher values that other customers.

Secondly they recommend you, provide feedback, support new products and typically ignore competitive messages.

As a leader in your organization what are you doing to enhance these behaviors? Do you make it easy for your customers to share their stories?

Do you recognize these customers and create unique experiences that provide extra value for them?

Some companies with traditionally poor records on this front are starting to step up in this area namely United Airlines.

United is now delivering more than just frequent flyer points but differentiated experiences for frequent flyers such as more room leg and priority boarding. They are also targeting customers with relevant and timely upgrade options as well a a broader range of flexible options for using points for travel and shopping.

What can you do differently for your best customers?

The only metric that matters to customer focused businesses – Lifetime Value

I was recently asked by a client, “if you could only have one measure to manage your business, what would it be?”. I quickly thought about the range of metrics available to executives today: profit per customer, market share, revenue growth, customer satisfaction, new product success, share price… the list goes on.

However the one metric that always comes to mind is one that not many businesses use, lifetime value of customers, and yet it is the most powerful.

This metric provides a long term customer centered view of your business. What is the value, in profit terms, of an average customer over the potential life of your business relationship?

This is not a static number but an active one that can be used to value your business and identify opportunities to grow that number.

It’s real power however is in galvanizing everyone in a company around the importance and value of customer relationships. It proves the tangible logic for why every interaction matters and connects everyone with the ultimate customer.

Below is a video interview with one of the great practitioners of Lifetime Value, Chris Zane of Zane’s Cycles

If you are interested in seeing more from this interview series you can go to MarketCulture’s Video Library