Marketing is NOT magic!

James Randi (“The Amazing” Randi) is a magician who’s dedicated his life to debunking claims that magic actually exists. “The Amazing” Randi openly admits there’s no such thing as magic and actively exposes how magic tricks are done.

As you might guess, most magicians out there aren’t big fans of “The Amazing” Randi. That’s understandable. After all, magicians make their living by entertaining people with distractions and illusions. So, someone like Mr. Randi isn’t very good for business.

Marketers on the other hand are not magicians; or, at least we’re not supposed to be. Marketers aren’t in the entertainment business; we’re in the business of increasing sales. But unfortunately, some of us marketers lose site of that at times and generating results takes a back seat to aesthetics and entertainment.

Unlike magic, marketing can work, but only when it’s designed to measurably support the sales process. When it isn’t, marketing becomes just an illusion (from a selling prospective); even if it is entertaining.

Some effective marketing might not be entertaining at all. But how important is that if they’re working?

Come to think of it, how important would be for a magician to entertain if they could really perform magic. If magicians could truly make objects disappear and reappear somewhere else, I’m thinking the entertainment business wouldn’t be their only career option. But because magic is just an illusion, it’s all “smoke and mirrors”. But, marketing doesn’t have to be if we leave the entertaining to the magicians and keep our marketing focused on selling.

Coffee is like good marketing

For me, coffee is like good marketing. It wakes me up, drives me to action and if it’s good coffee, I come back for more. I suppose that’s why I’m sitting in Starbucks, like yesterday and countless days before. Or is it?

The Starbucks I frequent is less than a mile from my home. And, since they opened there about two years ago, I’ve been in almost every day. I get in early to snag my favorite table. There, I stake out for an hour or so with my iPad and my “coffee of the day”.

On more than one occasion I’ve considered cutting Starbucks out of my daily routine. It’s expensive and I could make a pot of coffee at home that’s almost as good. In fact, I did the math once, and calculated that I spend about $60 a month at Starbucks. Even though I usually get the least expensive coffee (coffee of the day), that’s $720 a year.

Logically, cutting Starbucks out is a no-brainer, so why do I keep coming back? Simple, it has nothing to do with logic. Like just about every other consumer, only 10% of my buying decision is logic and 90% is emotion.

When a prospect really wants to buy, emotions take control. When this happens, the line between emotion and logic begin to blur. For instance, the real reason I go to Starbucks is not for the coffee. I’ll explain.

Because I do most of my work online, Starbucks is like having a satellite office right around the corner from my house. Furthermore, Starbucks is all about marketing and as a marketer that inspires me. Many of the best marketing programs I’ve planned were conceived in Starbucks. So, yes, $720 a year for coffee is expensive, but it’s a drop in the bucket for an inspiring remote office with decent coffee. If I had to, I’d likely continue to go to Starbucks even if they doubled their price.

In the off chance you’re not getting the point here, have a few cups of coffee and read this again. It will all make sense then, I promise.

Classifying key marketing performance indicators

The importance of accurately measuring marketing’s performance can’t be overstated. Everyone understands this, but differing opinions on what constitutes marketing effectiveness can make things so complex that measurement is often overlooked. Of course, some people (including me at times) can take even the simplest processes and turn them into a nightmare of details. However, this doesn’t have to be the case when you’re trying to gauge the effectiveness of your marketing programs.

To make things less complex, I classify marketing outcomes into five dimensions: quantity, quality, velocity, continuity and cost. Each dimension categorizes various key performance indicators (or metrics) that I use to gauge marketing results. Finally, the metrics in one or more of the dimensions are tracked and ultimately used to determine a program’s effectiveness.

Here are the five dimensions I use to identify and classify key marketing performance indicators.

The Quantity Dimension – Anything that can be totaled falls under the quantity dimension. For example, the number of responses generated by your marketing, the number of leads captured, the number of sales made, the amount of revenue generated and so on. Measuring response rates would be classified under the quantity dimension.

The Quality Dimension – Comparison assessments fall under the quality dimension. For example, identifiable attributes such as age, gender, title, annual sales revenue or number of employees are often used to define a target audience or assess quality of a lead. Measurable comparisons, such as quantifiable attributes, would be classified under the quality dimension.

The Velocity Dimension – The velocity dimension classifies anything that has to do with speed. For example, customer acquisition rate and selling cycle would both be classified in the velocity dimension.

The Continuity Dimension - Webster’s Dictionary defines continuity as: “The quality or state of being continuous.” A universal goal in marketing is to create successful marketing programs that can be duplicated and can continue to be successful over and over again. So, the continuity dimension is used to classify metrics that will be used to measure a program’s continuity attributes such as a campaign’s ability to consistently generate responses.

The Cost Dimension – The cost dimension is typically the most visible dimension, since it has to do with costs. For example, campaign costs, cost per lead, cost per response, and marketing’s return on investment (ROI) metrics would all be classified in the cost dimension. Metrics in the cost dimension are often also classified in other dimensions. For example, cost per lead involves quantity and cost.

Getting executive level decision makers to respond to marketing

Most of us who are tasked with marketing to executive-level decision makers (execs) would agree that getting CEO’s, Presidents, CFO’s, CIO’s, etc. to respond to marketing can be extremely challenging. So much so that many believe it’s not worth trying. That’s not necessary the case.

Contrary to popular belief, executives do respond to marketing it just takes a little more work. And, you need to follow a few simple rules.

Rule # 1: Go direct

If the goal of your marketing is to generate a response from executive-level decision makers, you’ll have to rely on direct marketing. The chances of getting an upper-level decision maker to call you as a result of a broad-reach, one-to-many campaign are slim to none. So, go direct or don’t go.

Rule # 2: Take “personalization” to another level

I recently worked on a program that was targeting 226 CEOs. To get the information we wanted to personalize the messages, we needed to manually collect data & images from each of their Web sites. As you might guess, this was extremely labor intensive. But, the alternative was to send a generic communication and when marketing to execs, that doesn’t cut it. We sent them a personal printed card (using Enthusem.com) that had an image of either them or their website on the front and typed a personal message that actually meant something to them...and even included a personal video for them to view online.

Rule # 3: Know what matters

At the executive level, only four things matter; increasing revenue, decreasing costs, building assets and minimizing liabilities. If your message isn’t clear on how your product/service addresses one or more of these points it’s not likely to get noticed.

Rule # 4: Get to the point. Fast!

How much time do you think a busy executive allocates for reading marketing communications? Answer: None. If you’re lucky enough to get your message in the hands of the executive you’re targeting, you’d better get to your point fast. See Rule # 3 if you if you have questions about what “the point” should be.

How much should you spend on marketing?

If you were guaranteed a return on every marketing dollar you spent, how much would you invest in marketing? There’s zero risk, so, every dollar you have, right? Well, since there’s no way to guarantee a return on every marketing dollar you spend you’re not likely to invest everything you have. So, how much should you spend on marketing?

I don’t know of many organizations that don’t struggle with this question and there’s no simple answer. But, there are at least two other questions that will help you find the answer. The first question is:

How much is your average customer worth?

Understanding the value of a customer (in terms of gross profit) is the single most important piece of information needed for figuring a reasonable expense for marketing. Without an understanding of the monetary value of a sale, it’s impossible to decide how much should be spent on marketing to get one.

To figure your customer or sale value, take your average sale amount and subtract the costs associated with the sale (including commissions) to get your average gross profit. Generally speaking, marketing expenses should be a percentage of this number which I’ll refer to as the “marketing cost per sale”.

For example, if your average gross profit per sale is $10,000 and you allocate 10% of that for marketing then your marketing cost per sale would be $1,000. Of course, you’re not likely to get a new customer each time you invest $1,000 in marketing which brings us to the next question.

How much am I willing to risk?

Most of us intuitively know that it’s impossible to succeed without taking risks but subconsciously almost everyone tries to avoid them. The problem with this is marketing can be extremely risky. And, unless you’re satisfied (and the people you report to are satisfied) with the results you’re currently getting from your marketing, you’re going to be forced to take risks. How much you’re willing to risk is subjective but avoiding risks altogether isn’t an option.

Sometimes the answer to this question is whatever you can afford to lose. Sometimes it’s whatever you’re willing to loose. But, in either case it’s an important question to answer when determining how much you should invest in your marketing.

Getting the M.O.S.T. out of your marketing plans

An ounce of execution can be worth a pound of planning.

I’ve always been impressed by those ultra-detailed marketing plans. You know the ones - they’re about 100 pages long and they spell out every inch of a marketing strategy.

As impressed as I am by these plans, I rarely use them. Why? I can’t remember a time when everything went “exactly as planned.” In my experience, you never really know what to expect until your plan is in motion.

That being said however, planning IS extremely important. I don’t execute anything without some initial planning. Rather than spending tons of time trying to predict the unpredictable, I try to get the M.O.S.T. out of my planning by staying focused on: my motives, objectives, and strategy; then I let many of the tactics define themselves.

Motives – The motives tie the plan into “the big picture.” In addition, the motives are the underlying drivers that create the purpose for the plan. For instance, let’s say my marketing vision is to create a cost-effective lead generation program that consistently generates 25 qualified leads per month. In this case, my motive might be to identify and test marketing opportunities that I can both afford and employ again and again.

Objectives – The objectives define the specific outcomes I’m attempting to achieve. Objectives should be SMART, that is: Specific, Measurable, Attainable, Realistic, Tangible or Time-bound. For example:

‘Our objective is to generate 200 qualified sales leads in 90-days with a fixed budget of $8,000.’

Strategy – The plan’s strategy should outline how the objectives will be accomplished. For instance, your strategy might state the following:

‘Using personal printed mail, we will drive hand picked recipients to a online video where they can learn more about our services and schedule a meeting with a sales rep.’

Tactics – Finally, there’s the tactics or the specifics of the strategy. Your tactics will include the timelines, tools, technologies, methods, personnel, etc. that will be used to execute the strategy. The tactical component of the plan is usually the most detailed, time-consuming and most likely to change when things get started.

Because tactics tend to get refined after a plan is put in motion, I don’t spend as much time as others on the tactical detail. Instead, I keep a clear focus on my motives, objectives and strategy. Then, I outline general tactics knowing full well that, over time, the M.O.S.T. effective plan will evolve.

Ten questions every B2B lead generation strategy should consider

Although there could be dozens of questions that a complete and well conceived lead generation plan should consider, the following ten are crucial.

1. What is the target market?

Your target market is the universe of organizations that you want to sell your products or services to. Begin defining your target market by writing a short description containing key attributes of the organizations you are focusing your lead generation efforts on.

For example: ‘Privately held Medical device manufacturing companies in the South Eastern United States with revenues between 10 and 200 million dollars.’

2. What is the size of your target market?

The total number of organization in your target market could potentially buy your products or services. Your target market size should only include people/organizations you could sell to. If you can’t sell - for example, because of geographic constraints - they’re NOT a prospective customer.

3. How are buying decisions made?

Once the target market is defined, the next step is to identify how buying decisions are made. This will include who the decision makers and influencers are as well as points such as whether or not there is a bidding process. In an ideal environment, this is the same or similar for all the organizations in your target market. However, if not, it’s important to clarify this in your plan.

4. What’s the value of a customer and a lead?

The value of a customer is not just important for calculating your market opportunity, it’s also important for determining what an acceptable cost-per-lead is. You should consider both the gross revenue value and the gross profit value for a single sale and over the customer lifetime/lifecycle.

5. How accessible are your prospects?

If you’ve determined by answering question #3 that buying decisions are made only by the CEO of organization within your target market or that buying decisions differ from organization to organization, this will likely have a significant impact on your lead generation strategy.

The harder it is to identify and communicate with prospects the longer it takes and the more it costs to turn prospects into leads.

6. What’s your sales closing ratio?

How many qualified leads (on average) does it take to close a single customer? For example, if you needed to engage ten qualified prospects to get a sale, your closing ratio would be 10 percent.

7. How long is the sales cycle?

From the first time a salesperson makes contact with a qualified lead, what is the average length of time it takes to turn a lead into a customer?

8. What’s your sales goal?

By answering questions 1-7 first, you should be able to create realistic sales goals based on your market size and available time/financial resources.

9. How are leads captured and qualified?

In the end, marketing is about supporting the selling process. Answer question 9 by explaining exactly how. For example: marketing might be used to drive sales through an online store or for generating leads for salespeople.

10. How long is the prospect cultivation period?

The best way to minimize risk is by acknowledging it. Any astute business person recognizes risks and knows that the most risky plans are the ones that claim “no risk.”

About the author.
Steve Tingiris is the founder of Prospect Smarter, Inc. and Enthusem.com. Since 1995, Steve has been helping businesses build their sales pipelines and increase revenues by maximize the effectiveness of their prospecting and lead generation programs.