Posts Tagged marketing metrics

Peer Endorsements Revisited: A look at Toyota’s fan base

In my last blog post I discussed a study that brought into question the validity and credibility of individual consumers as reference points. I’m revisiting this topic because of a recent post I read in AdAge about how Toyota is “winning fans” through Social Media, correlating this to Toyota winning over public sentiment about the quality/safety of their cars.

According to AdAge “the automaker has actually grown its Facebook fan base more than 10% since late January, around the time of the marketer’s Jan. 21 recall announcement and its Jan. 26 stop-sale date…the automaker has been somewhat surprised by the large number of customers who have leapt to Toyota’s defense in ‘an authentic way.'”

OK…Let’s for a moment acknowledge Toyota has discovered social media and suddenly finds themselves with “fans”. Now consider that Toyota resale values plummeted 5% within the first week of the recall announcement. Consider that most of the sentiment in the media and cyberspace at-large has been largely negative.  Finally, consider that Toyota’s “large” increase in fan base has meant a growth from 72,000 to 80,000, and contrast that with a total recall count in the millions.

I’m not saying any of this to undermine what Toyota has accomplished, for in fact, I think they are a great organization that will overcome this. But I’m bothered that certain experts would have us believe that Toyota is already on the road to recovery because it has a few fans. As I discussed in my last blog…most fans or other peer endorsements lack objectivity and credibility. Let’s assume I drove a Toyota, one that was recalled. I get it fixed, but my intention is to sell it in the next 6 to 12 months. Wouldn’t it be in my favor to endorse Toyota by becoming a fan or offering up some other form of peer endorsement (especially if that meant convincing the discerning eyes of AdAge that Toyota has everything under control as evidenced by an extra 8,000 fans).

And lets not forget that becoming “a fan” isn’t exactly an arduous task…we all have friends who randomly become fans of anyone and anything for whatever reason, the least of which happens to be actually believing in the product itself.

What we really don’t know (though I would like to know), is for every “fan” Toyota gained, how many completely wrote off buying Toyota for at least the next few years? Something tells me Honda and their 300,000 Facebook fans would gladly take more into the fold.

*AdAge’s piece, The Cult of Toyota, can be found here.

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Social Media in a B2B Marketing

Is there room for social media in B2B marketing? Everyone seems to be on the bandwagon, but bottom line is that there is no true line of site to revenue growth. Now as a consumer business, I get it… You’re creating a consumer touch point, gathering insight & feedback, and creating customer advocates. But as a B2B marketer, whats my motivation? Note: Let me say this is more from the perspective of larger companies. Small to medium enterprises are obviously (usually) more nimble and risk seeking.

Consider the facts…

  • Twitter has a 60% abandonment rate.
  • The B2B sales cycle is generally too complex to trace back social media efforts, making it difficult to demonstrate financial impact.
  • Big corporations take on added liability if they blog or twitter. And when companies do twitter, its generally a blatant self-promotion of how great you are, and the tweets end up only being followed by employees (a lot of good that does).
  • And even if you succeed in getting your messaging out there, if your customers are 50 y/o white male executives, how many of them do you think are out there (the exception of course being linked in)?

I’m not saying Social Media is not the way to go… but I think there is a long way to go before I become a social media evangelist in B2B marketing. These vehicles need to prove themselves as revenue drivers before companies will take on the added risk of exposing themselves in an uncontrolled social environment.

So some questions for my readers (however few you might be)…

  • When will that happen and what will it take for this to happen?
  • Is it just a matter of waiting for a younger, technically savvy generation to move further up the corporate ladder?
  • Will folks seeking this sort of digital interaction even work for large companies? Or are large companies doomed to be the dinasaurs that some of us already see them as?

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Marketing is iterative

Great post today from hubspot.com.  A good reminder that marketing is never perfect. If you are doing things the same way everytime, chances are you’re not marketing optimally.  I began my career in consumer finance marketing (yes, you can blame those annoying credit card offers on me) and one of the things I loved about that work was how measurable everything was, from individual customer profitability to responses for individual direct mail campaigns.

I constanty hear people bash direct mail as a waste, referencing the fact that they always throw their junk mail away.  But companies like Chase, Capital One, Bank of America and the like have been doing this for so long, believe me – if it didn’t make money they would know. They would know because they can measure response. And among those respondents they can track the individual profitability, and then adjust their marketing accordingly.

Now obviously a lot of banks today are losing their shirts but that’s generally a function of risk management not ineffective marketing.

The other thing I loved about direct marketing in financial services was that our customers were usually in the tens of thousands or more, which meant plenty of ways to slice, dice and test-control, test-control. And with each test you could tweak ever so slightly and evaluate the comparative results. When you get email spam, chances are you’re reading one of at least two or three varying subject lines and/or varying bodiest of text. Likewise with direct mail, you’re probably seeing one of two or three variations in the envelope or some other part of the message. That said, there are some basic rules of thumb to testing your marketing.

1) Don’t change too much. If you change everything at once you won’t know what change impacted what results. Remember this is an iterative process. You can’t learn everything overnight.

2) Similarly don’t target the same customer with multiple offers. I was once in a business where three different marketing manages were targeting the same subset of consumers, and because they didn’t have the appropriate tracking mechanisms, it was impossible to know what tactic drove what action. You also run the risk of diluting your message or scaring customers off with inconsistent/badgering messages.

3) Remember that when testing you should select a sample size that will give you a sizeable response. Rule of thumb is n > or = 30, where n is the number of respondents (not the overall sample size).  So if you expect a 2% response rate, you should have at least 1500 folks in your test sample. Less than 30 data points and your results could be skewed by the ideosyncratic behavior of just a couple respondents.

4) Use common sense. We are bombarded with messages in all shapes and sizes. I see a lot of marketers try to push the envelope with whacky mailers or eye grabbing e-mail subject lines. The problem is that more often than not I know right away those things are spam…so if you’re going to do that, the message better be very compelling. At the end of the day people have become skeptics. Your content should be genuine and the product/solution should speak for itself without all the bling. Your job as a marketer is to clearly communicate that value.

As Peter Drucker once said: “The aim of marketing is to know and understand the customer so well the product or service fits him and sells iself.”

Marketing is iterative if for no other reason than because you are constantly getting to know your customers better.

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The misunderstood language of marketing metrics

Let me first preface this segment by saying its always easier said than done. That said, clearly defined marketing metrics that are measurable and benchmarked will enable you to lobby for marketing funds and demonstrate your team’s value to the organization. (In fact, I think that is why in the context of B2B marketing, social media has not yet taken hold. Once we can better establish a line of site to opportunities and topline growth, I think we will see a tipping point in that regard.)

1) Know your benchmark. Too often I see a presentation on the success of a campaign but it means nothing to me because there’s no context of how it performed compared against similar tactics. If you have no benchmark that tells me that you had no goals. If you had no goals, then what are you working towards? A 1% AdWords CTR may be a terrible performance for a very specific niche search term with few impressions, but an outstanding CTR in a highly competitive and broad field. Know the difference and establish your target from the get-go.

2) Line of sight.  So you’ve outperformed the field in some metric – now translate that into dollars. At the end of the day best-in-class metrics for web traffic mean nothing if you can’t translate that into opportunities for the business. Of course some of that may be beyond the scope of your individual role but where possible, take that metric to the next step. An increase in web traffic by X% led to what? If you don’t have the mechanisms to properly track the funnel to that level of detail, then at least demonstrate your understanding at an intuitive level.  

3) Know how your business makes money. Rationalizing your marketing metrics and translating that (even at an intuitive level) means you need to know how your business makes money. It sounds simple enough but too often I hear folks talk about value prop this and segmentation that but have no clue how we as a business actually bring in dollars. If you don’t know how your business makes money you are in no position to tell someone how your marketing programs have bolstered business outcomes. Conversely, the individual that demonstrates a strong understanding of the business’s economics differentiates themselves and lends credibility to their analysis.

I mention these things today because in these difficult economic times establishing the value of marketing is more important than ever. And as I said before, I realize its easier said than done. Hopefully these three basic concepts will help you along the way. Best of luck to you in creating your own winning (and measurable) marketing programs.

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