Be an Ethical Entrepreneur, Marketer, and Business Builder

Is it possible for your business to accurately track lead sources?

If someone sees my service truck while my radio ad is playing, and later sees my TV commercial, and then gets on their iPad and searches for my business, how can you possibly track the effects of each one?

By watching the “pulse” of your marketing through your online laboratory.

So let’s start with that heart rate…

When you fly over the red rock formations surrounding Moab, Utah you can’t help but be fascinated by the unique beauty of the area.

Park Avenue in Arches National Park near Moab, UT

The sun setting on Park Avenue in Arches National Park near Moab, UT

Arches National Park is truly one of the most beautifully mysterious corners of the planet.

It’s one thing to see it from the comfortable, encapsulation of a commercial jet at 30,000 feet.

However, sitting in the back of a small prop plane with the door removed for effortless mid-air exit and a man strapped to your back, the thoughts of the intense beauty fade into the background drowned out by the idea you’ll soon be hurtling toward those red rock formations at 120 mph.

For a fleeting moment, you consider the wisdom of this particular adrenaline rush…
Then, over the roar of the wind, you feel the “signal” from a wild-eyed, greying jump instructor looking for the “OK”.

You’re only option is to give the thumbs up and juuuuuuuuuuuuuuuuuuuump.

If you’re a data-junky like me, when you go skydiving, you wear your Garmin GPS watch with heart rate monitor.

Looking at the data, it wasn’t hard to tell when we stepped out of the plane.

My heart rate spiked!

Interestingly enough, when you have the monitoring tools in place, your marketing impact can actually be tracked the same way as your heart rate.

Just as your heart rate is an important measure of overall fitness, your online activity is the core of any marketing plan. When you launch marketing offline that generates interest in your market, you can see that spike in activity online.

Tracking your lead sources

Is marketing so complex that it’s become harder to track lead sources instead of easier?

If you understand the goal of each lead source, you can track the effect of each lead source more accurately than ever before.

All marketing is not independent of each other. If executed well, all marketing works together with the focal point being the internet.

Have you ever put a call-tracking number on a TV ad, radio ad, or billboard? Did you get many calls? Probably not.

But did you measure the effect that had on your online search volume?

Just because you didn’t receive calls doesn’t mean that marketing didn’t work because most people do not respond to TV commercials by immediately placing a phone call. Instead we get online and do some research.

The exciting part is, my heart rate monitor doesn’t care if I’m running, sky-diving, or car racing, it still measures the change in my heart rate.

Your online search volume can be tracked the same way when you have the right tools in place to measure the impact of all of your marketing.

The Optimized Marketer’s Funnel

Now you need to understand the GOAL of your marketing.

To address this you need to use the Optimized Marketing Funnel.
Optimized_smallGraphics
Unlike your normal “Sales Funnel” an Optimized Marketing Funnel is upside-down. The wide part is on the bottom instead of the top.

The problem with the traditional funnel is that it doesn’t really help us understand the marketing process because:

  1. Everything you put in the top of a funnel comes out the bottom.
  2. Everything you put in the top of a funnel naturally moves along thanks to gravity.

Unfortunately, in the real world neither of those 2 points are true, which is why an upside-down funnel is so much more useful.

Now that you have an upside down funnel, imagine all of your inquiries are being fed in the bottom and are climbing their way up the walls.

For anyone to come out the narrow top of the funnel we need a driving force to help them out. That force is a combination of your Value Proposition and Branding.

Without that force, people will just naturally fall out.

For example, if I see your TV ad and go online to search for your business but you don’t show up in the results, guess what happens? I fall out of the funnel. Naturally. With no effort on your part.

  • What if I see your Google Ad but I like one from a competitor more? Fall out…
  • What if I click on the Ad but your landing page doesn’t solve my problem? I’m falling…
  • What if I fill out a form on your website but you don’t call me back for an entire day? aaaaaaahhhhhhh…

That little image of an Optimized Funnel brings up a few crucial points.

  1. You will naturally lose people at every step in the process so you should measure every step.
  2. The goal of each marketing piece is not to generate a lead. The goal of marketing is to have the prospect go to the next step and move them further up the funnel.
  3. You can measure what works (and what doesn’t) at every step and use that information to improve the entire funnel.

Without defining and understanding that your goal is to get the prospect to take the next step, you’ll never be able to track the effectiveness of your marketing.

Here’s why…

If you run a TV ad, your prospects go online to search for you and they can’t find your website, you won’t get any inquiries and you may say, “See, that darn TV didn’t work!”

In reality, you can measure that TV did indeed work but your web presence is what failed.

Let’s take this one step further and define the goal of each marketing medium.

All of your marketing should be categorized as Interruption Marketing or Response Marketing.

Interruption marketing simply means that, as a consumer, you didn’t ask for me to market to you but I did anyway. Television, radio, direct mail, billboards and even online display advertising are all Interruption marketing.

The goal of Interruption marketing is to generate interest. Period. If you define its goal as generating a lead, you’ll have almost no way to track how well it works.

Google Changed Everything

Google did something amazing and a bit scary to the marketing world. For the first time in history, we, as marketers, are able to read the minds of our prospects and respond immediately.

Google is our therapist as we type all our problems into that magical little search box.

In Response, we can market to people with a problem for which we have the perfect solution. That is Response Marketing.

The defining characteristic of Response marketing is that the consumer is asking you to market to them. Yellow pages, email opt-in lists and remarketing campaigns can also be considered less precise forms of Response marketing.

The goal of Response marketing is to generate a contact or inquiry.

Measuring the Net Change

To determine the effectiveness of your marketing, you can only measure when something changes. An engineer or scientist conducting experiments might refer to this as “isolating each variable”.

With a heart rate monitor strapped to your chest, it’s very easy to see when something changes. You engage in some cardio and your heart rate goes up.

However, if you never measure your resting heart rate, it’s hard to tell just how much of an impact different workouts have on you.

In marketing, if you are running radio, TV, direct mail, branded delivery trucks and search marketing at the same time, and you ask my team to tell you which is working, it’s nearly impossible.

Why? Because nothing has changed. Your heart rate is never at “rest”. We haven’t isolated any variables.

Instead, if you are running radio, delivery trucks and search marketing, and then ask us to track the effect of an upcoming TV campaign, now you have a baseline and a change to measure.

Even when our customers don’t tell us about these changes ahead of time, we often notice the spikes in our data shortly after an effective offline change.

To your success in accurately tracking your marketing,
Bryan

P.S. To my knowledge, there’s no other company that offers this level of data analysis for small businesses with internet budgets as low as $800/month. Contact me if you’d like to increase your leads by only investing in marketing that you know is working.

Do TV & Radio work for small business? How to measure broadcast media

The more difficult question to answer is, of course, HOW do I determine if broadcast media is working for me?

This isn’t 1950 with 3 TV stations. You have to generate interest before you can generate a lead

Ok, one more question, what is the goal of your broadcast media? Go ahead. Take a second to answer that question.

To generate leads and grow your business, right!?

Actually…
No.

This isn’t 1950 with 3 television channels and a captive audience. If your goal with a TV ad (by itself) is to generate a bunch of phone calls or walk-in traffic to your business then you’re shooting for the stars.

The goal of broadcast media is to generate interest.

Hopefully enough interest to get them online visiting your website or searching for your business and what you do.

From there, it’s up to your internet strategy to take over because the TV ad did its job.

This presents 2 massive shifts in the way people market using broadcast media.

  1. Your message to pique curiosity and generate interest is MUCH different than one to sell a product. A “direct-response” TV or radio ad may focus on a special offer or discount. One that is just designed to generate interest instead focuses on what you need to do to get people to take the next step.
  2. You can now track the performance of your broadcast media to probably the highest degree of accuracy ever.

Don’t get me wrong, TV ads that market Black Friday Specials, discounts, coupons and offers absolutely can work assuming a few criteria are met.

  1. People know your business already. In other words, they trust you.
  2. People know where you are. They know how to find your business if it’s retail or how to get a hold of you for service.

If those 2 criteria aren’t met, they’re going to either ignore you or do additional research.

Guess where they are going to do additional research?
Online.

Generating Interest Not Leads

Studies show that up to 31% of Americans browse the internet WHILE watching TV.

The current way 1/3 of Americans watch TV

The current way 1/3 of Americans watch TV

So let’s put this in perspective.

Most people watch TV at night when your office is closed.

About 1 in 3 do so with an iPad, laptop, or other internet-enabled device at their fingertips ready to do further research on things that catch their attention.

Which means for 15-60 seconds you have a potentially captive audience primed to learn more about your business, products and services.

But…

Only if your ad is more interesting than the one that came on 30 seconds earlier and the one that comes on 30 seconds later.

And once they find your website, they must be engaged enough to stay on your site long enough to fill out a contact form.

Remember, it’s after hours so if your goal is to get them to call you the next day when you are open to generate a “lead”, best of luck. That’s a much harder task.

Tracking Broadcast Media

The 2nd major advantage of redefining your goal to Generate Interest instead of a Lead is now we can track the impact of the ad…

We can track visits to targeted landing pages and the number of online searches for your business before, during, and after your ads are running.

We can break it into the time of day or segment the months when the ads are running and when they aren’t.

How accurately can you track broadcast media?

First off, how accurately can you track it now? Not very well, huh?
So any tracking would be a step in the right direction, right?

In one market, I was able to see a 135% increase in branded searches sustained over several months while running a TV campaign compared to without running any TV ads.

Additionally, the low performing month was during the normal seasonal peak and the increased search months were during slower times of the year. So the results were actually even more drastic than the 135% increase we measured.

Now are you ready for the scary part?
The data we gathered wasn’t for our client’s TV campaign. It was for his competitor’s TV commercials.

Get your competitors to pay for your marketing

Let that digest for a second. We can watch a TV ad that your competitor has spent thousands or 10’s of thousands marketing and not only measure it’s impact, but also get into the middle of the process.

In other words, when the TV watcher types “competitor” into Google, we can pop-up and cut them off at the pass.

Are you doing this right now? If not, hopefully no one else is doing this to you.

To your broadcast media success, Bryan

P.S. There’s a reason my team only works with 1 business per market and won’t take on direct competitors as clients. What we learn about your market is just too valuable to get into the hands of your competitors. So take 2 minutes, get in touch with my team, and take control of your internet marketing before you waste another dollar on untested methods that you still aren’t sure are working.

Small Business Marketing – Lead Generators and Implementation

So far I’ve addressed the structure for your Marketing System, your company’s Vision, Mission, and Culture, and how to develop a Strategy and Clarity in your marketing plan. Finally, we get to look at actually generating leads. When you think marketing, this is what pops into your head. Yellow page ads, trade shows, direct mail campaigns, e-mail marketing, Google Adwords, websites, magazine ads, Television, and newspaper ads are a few that come to mind.

At this point, we’re not going to discuss how to create great copy, structure strong offers, or even track the response. At this point in your Marketing System you need to simply outline your Lead Generators according to each revenue stream along with all of the steps for implementation. So how do we do this? There are basically 3 steps.

  1. Write down all of your current marketing programs.
  2. Track which revenue streams each program markets.
  3. Outline all of the steps to effectively implement each marketing piece.

At this point you should already have 3-5 primary revenue streams for your business. Keep in mind, when I say Revenue Streams, that does not mean 3-5 products or services. Each stream can have dozens of products or services, think of a stream more like an area of expertise. Most strong businesses can’t effectively become experts in more than 3-5 areas.

Obviously some of your marketing will overlap revenue streams such as a Yellow Pages ad (though these are dying or already dead for a lot of businesses), Trade Show, or Google Adwords. Your website and direct online marketing, such as Google Adwords, that leads people to your website should have a specific page to address each revenue stream (area of expertise).

So to get an idea of what the Lead Sources and Implementation stage looks like, here’s a quick example. For this example I’ll assume I’m a flooring company who resells and installs flooring.

  1. Revenue Stream #1 – Residential Flooring
    1. Direct Mail Postcards
      1. Goal – Get consumer to come to our showroom.
      2. Budget – $1500
      3. Timeline – Will be mailed first week of May with a follow-up post card 2 weeks later.
      4. Pricing/Offer – Free upgrade to premium option with post card for the next 30 days.
      5. Sales Training – Sales Leader will introduce at next week’s team meeting to all sales, office, and service personnel
      6. 4.5 Points of Copy –
        1. Problem – Worn out, unattractive, hard-to-maintain flooring.
        2. Solution – Newer options that are easier to keep clean and look much better.
        3. Why us – Best Reputation <Testimonials>, Best Prices <guaranteed>, Professional installers
        4. Why now – It’s our slow time of the year so we can afford to upgrade your flooring choice for free.
        5. Risk Free – Stop in or have one of our flooring experts visit your home for a risk-free assessment and quote.
      7. Tracking – Offer is only available on this card
    2. Radio Ad
      1. Goal – Get consumer to visit our showroom
      2. Budget – $300/week
      3. Timeline – 30 :30 second spots per week thru April, May, and June.
      4. Pricing/Offer – Half price carpet padding
      5. Sales Training – Marketing leader will introduce to team at 3/31 Team Meeting.
      6. 4.5 Points of Copy –
        1. Problem – Worn out, unattractive, hard-to-maintain flooring.
        2. Solution – Newer options that are easier to keep clean and look much better.
        3. Why us – Best Reputation <Testimonials>, Best Prices <guaranteed>, Professional installers
        4. Why now – N/A (not enough time to address in 30 seconds)
        5. Risk Free – Stop in or have one of our flooring experts visit your home for a risk-free assessment and quote.
      7. Tracking – Offer only available through radio. Have flooring experts ask people if they listen to 103.7.

And you would continue to do the same thing for each Revenue Stream and Lead Source while keeping your Target Customer, USP, and Positioning Strategy in mind for each step of implementation. In your manual, you’ll want to keep a copy of the Direct Mail Postcard and script of the radio commercial. Preferably your manual will also be digital so you can store an MP3 of your actual radio ad along with a print-ready PDF of your postcard so you can tweak and reuse. Your manual will also include the results of your ad. Those results will include the # of leads, # of sales, and total $ amount of those sales. You’ll compare those numbers to your total cost of the lead source to determine what you paid to buy each customer along with the $ in sales/$ in marketing. The most important number to determine the effectiveness of that lead source and whether you’ll invest in this marketing again is the dollars of revenue generated per dollar in marketing spent. I generally keep all of this information in a single spreadsheet aggregated for the year called my Marketing Analysis spreadsheet that looks something like this:

Lead Source       Date Ran     Cost     # of Leads     # of Sales     $ in Sales     Cost per Lead     Cost per Sale     $ in Sales per $ in Marketing

Direct Mail PC    5/5/11        $750          7                       3                 $9,237             $107                      $250                               $12.32

To learn more about theses numbers and the math involved reference my previous blog on Scientific Advertising. Since you’ve never done this before, getting your marketing manual up-to-speed will take some time and effort. However it’s worth its weight in gold and it’s a commitment to work ON your business that will make your life easier and more profitable down the road. Once your manual is together, maintaining it with habitual rigor will be a lot easier. Make it habit to reference your manual before doing any marketing and then updating it afterward.

Another major benefit is that you can train someone else to take over your marketing with ease. Whether that person is a team member, ad agency, or even a new owner because you decided to sell your business, providing a Marketing System Manual will be the most valuable item you can pass along to them and they know it. As a business broker I can testify that small businesses who have created manuals, systems, and processes like these throughout their business will ALWAYS fetch a higher price than a similar business without these in place.

To your marketing success, Bryan

Scientific Advertising

I finally finished Scientific Advertising by Claude C. Hopkins this past weekend and HIGHLY recommend it. The whole book is around 75 pages and can easily be read in a little over an hour.

There are 2 primary concepts that literally jumped out at me as I was reading. The first blindingly simple, yet profound, teaching of Claude C. Hopkins is simply:

“Your object in all advertising is to BUY new customers at a price which pays a profit.”

Did you hear that?

Just like when you go out to buy a car, or parts, or insurance or anything else for your business you expect (even demand) to get something in return for your money, your marketing is no different.

If you’re not verifying that your marketing is cost-effectively buying you new customers, then you are most likely just throwing money away.

The second point that Claude makes is really just a further clarification of the above statement. On the last page he highlights the fact that pretty soon all advertising agencies will only get paid based on the results they deliver.

Is that how you pay your advertising agency?

“The time is fast coming when men who spend money are going to know what they get. (hahaha, if only that were true in marketing today) Good business and efficiency will be applied to advertising. Men and methods will be measured by the known returns, and only competent men can survive… Enormous advertising is being done along scientific lines… We (advertising agencies) shall be prouder of it (advertising) when we are judged on merit.”

Does that describe your advertising agency?

Now it may be fair to assume that with the advent of new tracking methods such as Pay-Per-Click, Click-Thru-Rates, custom 800 numbers for each direct mail piece, etc. etc. that advertising agencies are indeed moving in that direction.

I would tend to agree, except… Scientific Advertising was published in 1932!

Now do you see why it’s so important to understand the concepts of “Scientific Advertising” that he promotes? For 80 years we’ve been able to track the results of our advertising dollars in terms of the cost/lead and cost/sale and yet we still aren’t demanding that from our advertising agencies (or from ourselves if we handle our own marketing).

It seems to me, however, that times may be changing.

Yesterday I was speaking with a gentleman who does sets primarily for TV commercials. He’s done it for over 30 years and has done sets for commercials, movies, TV shows, and music videos and so seems to have quite a range of experience.

In his personal opinion, TV advertising rates have dropped off so much over the last few years he imagines it will nearly disappear entirely within the next few.

Obviously I questioned him on that, but he insisted that, whether it’s simply a byproduct of the economy or not has not been proven yet, but if not, TV commercials are on the way out. Could that be because businesses are finally demanding results from their marketing or dropping it altogether?

In practical terms, this is how you hold your advertising agency’s feet to the fire.

  1. Track the following:
    1. Cost of advertisement
    2. Number of people who inquired because of it
    3. Number of people who purchased because of it
    4. Lifetime value of each customer
    5. Profit Margins
  2. Calculate the following:
    1. Cost of advertisement/number of people who purchased because of it – This gives you your “cost/sale”
    2. Lifetime value of customer x Profit Margins – This gives you the profit you’ll make off of each customer or “profit/customer”
  3. Compare the following: your “cost/sale” to “profit/customer” – If the “cost/sale” is higher than “profit/customer” drop that marketing project or figure out a way to improve it in a jiffy.

Let’s throw in a few numbers to make the point clearer.

  • Cost of advertisement: $1000
  • Number of people who inquired because of it: 10
  • Number of people who purchased because of it: 4
  • Lifetime value of customer: $2000
  • Profit Margings: 15%
  • Cost/Lead = $1000/10 or $100
  • Cost/Sale = $1000/4 or $250
  • Profit/Customer = $2000x.15 or $300
  • Our Profit/Customer ($300) is greater than our Cost/Sale ($250) so we keep the marketing

Keep in mind that you should always be improving your marketing to be more cost-effective.

In other words, even though we’ll make $50 profit on that advertising program, if we can improve our marketing or sales process to increase the number of people who purchased based on the same advertisement to 5 (an increase of 25%) our profit would double (increase of 100%) to $100 per customer.

To get some practical ideas on how you can better track your lead sources to determine your cost/lead and cost/sale be sure to check out my blog about why Asking your customer “how did you hear about us?” is a waste of time and what to do about it…

To your Scientific Advertising success, Bryan

Asking your customer "where did you hear about us" is a waste of time and what to do about it…

A few days ago I was reading Michael Corbett’s The 33 Ruthless Rules of Local Advertising. In his book, he points out one of the biggest flaws I’ve seen in businesses – you cannot rely on a prospect to accurately inform you where they hear about you. In other words, a customer cannot provide you with accurate information on which of your lead sources are producing the most profit. Here’s why:

As Michael tells the story, he was working for a business that was having a big sale one Saturday. Prior to the sale they did a lot of advertising in the local market and wanted to determine which marketing project paid off. To do that Mike and his boss stood at the door all day and asked every customer where they heard about the sale. 30% said TV, 20% said Newspaper, and 50% said Radio – Good to know, right? Except they never had a TV ad. When they asked people if they were sure they heard about it on TV everyone assured them that they had.

Your prospects don’t know and don’t care where they heard about you.

So now what? To wisely invest your marketing dollars, you NEED to know where your leads are coming from. Michael suggests just watching sales to determine if the marketing worked. However, what if you’re running multiple marketing promotions at once? After all, who isn’t? You may have a direct mail piece, yellow page ad, website, a radio slot, and be sponsoring your local high school sports events all at the same time.

The internet marketing guru’s have this one figured out. They may have 100 different ways that they are marketing their products, but they always know exactly where the leads are coming from by tracking the “referral sites” to their website. (If you’re not familiar with “referral sites” your webpage can be setup to track which other webpage people visited that lead them to your site.)

In the “physical” world if you’re running multiple advertisements you have 2 options:

  1. For print ads (i.e. yellow pages, direct mail, newspaper, magazine, website etc.) provide a coupon. Have each coupon be unique (preferably a different color) with a unique promotion ONLY available with the coupon (and obviously void with any other offer). The different color is useful because even if they forget the ad at home, they can generally remember the color so you’ll know exactly which one they’re talking about.
  2. Simply offer a unique promotion. Your radio ad, TV ad, announcement at the high school event etc. should all include a different promotion when they go to your business and mention it.

Note: Make the yellow page ad your “weakest” promotion. In other words, if they hear you on the radio and pick up the yellow pages to find you, you want them to tell you about the radio promotion, NOT the yellow pages promotion.

What about referrals? – Well you need to incentivize (I’m aware that I just made up that word) your referrals. You need to offer something to the referrer for providing the referral. If you do that, the referrer will be sure to tell you about it. 😉

Also, make sure your promotions provide some sort of exclusivity. Generally items are made exclusive by offering a time limit, quantity limit, or “previous customer” discount. If you look at any good online information marketers, the good ones (i.e. Yanik Silver, Perry Marshall, Jim Edwards) ALWAYS make their materials “exclusive”.

Here’s the other “excuse” I hear from business owners all the time about why tracking lead sources is a waste of time. They claim that you can’t really ever know which lead source brought them in. Maybe they did hear your TV ad and radio ad and saw your newspaper ad and finally one day decided to call. I agree that in your market, having your name synonymous with your product is very important and to some extent all of your marketing projects should be helping to do that (if they’re structured properly with your Unique Selling Proposition). But here’s the thing. Who cares if everyone in the world knows that you make widgets if no one is buying your widgets??? The reason you offer promotions is because even though your prospects may have heard your name in 10 different ads, the ad that brings them in to buy something is the one you need to know about.

Do not confuse “activity” – people calling or stopping by because they heard your ad – with “profitability” – people actually BUYING something because they heard your ad. Online affiliate marketers are great at distinguishing between the 2. They don’t pay a dime to anyone for any marketing UNTIL someone buys a product! Don’t you wish you could do that in your business? Imagine setting up a deal with your local newspaper, radio station, or TV channel where you paid for the ad by giving them a percentage of sales that came directly from that ad. If you ever manage to negotiate a deal like that please let me know about it.

To your success, Bryan

P.S. The “other” way to track all of your lead sources is to offer unique phone numbers, email addresses, or web addresses with each ad and promotion. That can get a little more inconvenient for the consumer to try to remember that information however with the proliferation of the internet, VOIP phone services, and email, at some point I imagine you’ll see this happening more often. It’s already becoming popular in direct mail marketing.