Measuring and Testing Is The Key To Great Marketing

Marketing is basically a combination of 5 things:

1. Behavioral psychology
2. Sociology
3. Math
4. Creative Labor
5. Measuring and Testing

It could be argued, of the 5, testing and math are the most important because through testing and basic math you can monitor what your marketing is actually doing - what's working, what's not and if the numbers jive.

It is very important to test and measure all of your advertising. 

If you're using direct response marketing or advertising you need to be able to measure your response, otherwise you're not going to know if your investment (money, time, opportunity cost) is paying off.

At the very least you need to know the following:

• How many people responded to your offer (did the prospect pick up the phone and schedule an appointment, fill out the form, fax an order, mail their registration, etc.)
  
• How many of those prospects were converted to a sale or appointment
  
• What the new customer or opportunity is worth to your business

Once you determine what the customer or opportunity is worth to your business you can compare that figure to the cost of the ad and you can immediately work out how profitable the ad was, whether you should stop running it, or if you need to find a way to make more money in order to make the advertising worthwhile.

A lot of businesses never calculate the net value of a new customer, or what the lifetime value of a new customer is for their business.  These are first set of numbers you need to look at in order make decisions about a marketing or ad campaign.

So many businesses just allocate a certain amount of money to an advertising budget, spend the money every year…and they're mystified about whether the ads are working or not.

This is nutz!

If your campaigns are working, you want to roll them out on a larger scale. If they're not, STOP and use the money on one of the dozens of other marketing strategies that can bring you a 100 or 200 or 300% return on your investments.

You'll obviously need a system for asking people who contact you for the first time where they heard about you.

One of the best ways to track your marketing and advertising is to set up a separate phone number that only appears in your advertisements and rings directly to your sales team or front desk.

This way you can easily monitor which campaigns or ad sources are working.

Other ways to track your marketing results include:

1. Split testing with unique web pages
2. ID Codes on mail or fax back forms
3. Have your front desk ask every prospect where they came from
4. Ask prospects to check a box or fill out a form identifying their origin
5. Special promotions

Of the 5 listed above web tracking is probably the best, but the down side of web tracking is you're not always able to track which prospects pick up the phone and call your office.

Asking your front desk or salespeople to ask the prospect where they came from is a problem because a lot of times they get misinformation and it immediately takes the focus off of the prospect and puts in on the company. 

Prospects aren't calling your office to help you monitor your marketing effort.

Another thing, when using these antiquated methods (not referring to web tracking), what ever happens to all of this data and how is it being used for future marketing?  If you are doing this by hand be sure to have a log of it in a format that can be used for future marketing.

Other key questions ask when measuring your marketing and advertising include:

• What method(s) are you having the most success with (yellow pages, newspaper, direct mail, referral, website, newsletter, radio, television)?
  
• How much are you spending on each method on a monthly basis and how many inquiries do you get as a result of each?
  
• How many new customers do you need in order to pay for your marketing?
  
• What is your cost per lead?
  
• What advertisements or offers generate the most response?
  
• How many inquiry calls do you receive each week?
  
• How many new customer do you get each month from referrals?
  
• How many visitors go to your website how long do they stay and what do they look at?
  
• Do prospect pick up the phone and dial direct from your site, if so, at what point do they typically do it in their search?
  
• What is your call-to-purchase conversion ratio?
  
• What is you appointment-to-walk-in ratio?
  
• When during the week do you receive most of your inquiry calls?
  
• What zip code(s) do the majority of your customers reside in?
  
• What is the most common objection or cause of customer attrition?

The mistake most people make when testing and measuring their marketing is they try drive their cost per lead down.

It's ok to want to not waste money on marketing and at first blush keeping your cost per lead down makes sense…

But, a better approach is to find ways to make your marketing so successful that you can't afford not to keep doing it on a larger and larger scale.

Once you've developed marketing formulas that generate exceptional results (through measuring and testing) you can afford to pay more for a lead than your competitors, and you should be willing to.

If you can afford to spend more on a lead than your competitor you can drive them out or at least have a major advantage.

And the way to do this is to:

Calculate the net value of a new customer. 
Improve your sales conversion ratio.
Sell at premium prices. 
Sell existing customers more
And develop a strong customer retention program.

Be advised, there's a major distinction between being able and willing to pay more for a lead than your competitor and throwing more money at marketing in hopes it'll pay off.

The reason a lot of marketing professionals and business owners have a hard time wrapping their mind around spending more money for leads, and in most cases they try to reduce their cost per lead, is because they don't have a definitive and clear picture of the relevant numbers, which is totally a function of measuring and testing.

In our call tracking system we actually offer our customers a way to enter the total cost (dollar amount) of an ad campaign into their call tracking system and the system automatically calculates the cost per lead based on the number of prospects who call from the specific ad.

All of this data is housed on a password protected website and the business owner or marketing professional has access to the data whenever they need it so they can definitively calculate response rates and make good decisions about their marketing campaigns.

But it doesn't stop there.

Measuring response rates alone isn't enough.

You've got to tracking the customer acquisition process all the way through till the prospect buys.

Here's quick story to make the point:

Some of the most important lessons I learned in college came from my experience playing Division III football.  I played outside linebacker for Hampden-Sydney College, a small school in Virginia.

I can remember one home game we were up 14-0 going into the half.  We went into the locker room thinking we had em.

The third quarter rolled around and the visiting team came out determined to fight back and take the lead. 

We got complacent because we thought. We're up two touchdowns. We can keep playing like we've been and ride it out.

Well that would have been ok for some opponents, but not these guys.  The visiting team turned the tide and won the game 21-14.

It was a demoralizing loss. 

The simple lesson we learned the hard way that day is that a football game is 4 quarters.  We went out and played 2 and the other guys played all 4.

We were in the right position to win, but didn't follow through.  I've never forgotten that.

You've gotta play all 4 quarters to win consistently with your marketing and that means tracking the customer acquisition process all the way through until the prospect buys.

No business is ever able to go to the bank and deposit advertising response rates. 

Response rates count, but customer conversion pays.

Just because your advertising generates response doesn't mean you're getting a ROI.  At this point in the customer acquisition process (you've gotten them to respond) you need to measure what formula or method consistently converts those prospects to customers.

The difference between success and failure is a function of (just to name a few):

• The type of language your sales people use
• How the prospect is qualified
• How they're handled by the front desk
• The attitude and tone of your staff
• The prospect's perception
• The consistency of their experience with the expectation that was created by your ad

The way to measure this is to track your call response. 

Using our call tracking system you can actually record calls that come directly from your marketing and advertising and hear how prospects are handled on the phone.

• Hear what their reaction was to your ad
• Listen to how it made them feel
• Find out what triggered them to act

This is the kind of insight you need to know to build an exceptional marketing system for your business.

Up to this point we've talked a lot about measuring, monitoring and tracking response, so now let's talk about testing.

What should you be testing in order to improve response and customer conversion?

The three core factors to test are your message (offer), medium (delivery) and market (audience).

Let's start with message.

You need to test your offer.

But before you can even get to the offer you need to test your headline.

The headline is either the sentence that goes at the top of the ad or if there's no sentence it's the first words of the ad. The purpose of your headline is to grab peoples' attention.

Your biggest challenge is getting people to read your ad let alone for the ad to produce a result. So your headline isn't designed to sell your product it's just to get people to read your ad.

Your headline should speak directly to your readers not about you. If your headline has the name of your business in it, you are probably off the mark.

Imagine you owned a company selling home security systems. Which of these headlines do you think would be most likely to get the reader's attention?

Smith's Home Security Systems - Your Families Safety Guaranteed

Is your Family's Life Worth The Price Of Your Monthly Utility Bill?

Be bold with your headlines. Test different versions to see what works best. There's no rule book you have to follow except what works.

By simply testing your headline you can produce a 20-200% increase in response, but again you have to monitor your response and one of the best ways to do that is with call tracking.

Once you've found proven ways to get people to read your ad you need to find out what will compel them to take action.

This is your offer, perhaps it's:

• A free report
• A special limited time gift offer
• A discount for people who act based on the ad
• A free audit/check-up/consultation

 Whatever it is you need to test and find what works.

Testing your medium (delivery)

This is probably the most expensive thing to test, but well worth the expenditure when you find out what works.

What marketing strategies or source works best for your business?

• Website
• Yellow Pages
• Newspaper
• Magazines
• Direct Mail
• Trade Associations
• Newsletters
• Radio
• T.V.
• Speaking

You can go crazy sub-categorizing these sources and really drill down to find those unique sources that work best. 

You'd be surprised at the kind of results you get if you actually tracked your response from some of the more traditional methods.

Some of our customers felt like they had to run traditional advertising in the Yellow Pages, because everyone in their industry was doing it. 
After tracking their results they found that they got absolutely ZERO inquires from their ad.  Now maybe that's a function of their message and maybe it's the medium.

They eventually got radical and pulled the ad all together, spent the same amount of money elsewhere and realized a 300% return.

Just because everyone else in your industry is doing something doesn't mean you should follow suit.  9 times out of 10 you're better off doing something totally different than what you're competitors are doing.

But, again you've gotta test to know what works. The most successful marketers use a series of strategies to promote their products and services.

To use a worn out, but appropriate cliché, don't put all your eggs in one basket.

Be sure to avoid becoming dependant on any one marketing source or form of advertising.  That's another reason it's so critical to test various medium and to have mastery over several.

This a warning to those businesses that are relying too heavily on the Internet for leads.

Diversify.

Before the national do-not-call list registry, outbound telemarketing was a fundamental core marketing strategy for a lot different businesses.  When the do-not-call laws went into affect it drove many businesses to their knees, never to recover.

Testing your market (audience)

One of the best examples I can think of to make this point is a company I had the opportunity to learn about firsthand through a client, Williamson-Dickie Mfg. Co.

You may know them as Dickies.

Dickies is the worldwide leading manufacturer of workwear and uniforms. They make all kinds quality garments that are known for comfort and durability.

Dickies originally started in 1922 as a small bib overall company and transformed itself to the largest workwear manufacturer in the world.

One of their keys to success was their extensive growth through out the 90's when Dickies realized and developed an unlikely customer base. 

The growing Grunge and Hip-hop youth counter culture (which was actually trendy throughout the 90's) adopted Dickies brand as a hot fashion.

It was and unlikely and surprising market, but highly lucrative. After Dickies identified this new market they began marketing directly to this demographic.  Soon kids all over the United States could walk into their local Wal-Mart or Target and buy a pair of their favorite kaki work pants.

I guess the gear made a statement about their "rugged independence"????

Prior to their knowledge about the new fashion appeal Dickies never tested this market.

They went after the more traditional workwear market they always had, same as their competitors.

This new market gave them a distinct advantage over their traditional competitors and put them in a category unto themselves.

Now whether Dickies built this market as a result of testing is questionable…

It's probably more accurate to say they stumbled upon it, but the fact that they were able to identify this niche market and capitalize on it is an important point.

Most businesses never test new markets. Their marketing is generically designed for a broad base of potential customers.

The most successful marketers are able to pin-point unique characteristics about their best target market and design campaigns that go directly to these groups through the most appropriate medium.

Here are some simple examples of testing your market:

• Run a three wave direct mail campaign to two separate zip codes in your area…run the exact same message using the exact same medium and see which zip code produces more response.
  
  
• Run a 15 minute infomercial or a series of 30 spots on an alternative cable channel during a rerun time slot that appeals to unique viewers. For instance if I were a cosmetic suregeon or a dentist I'd consider running an ad during reruns of America's Next Top Model as opposed to paying for a prime slot during Oprah or Desperate House Wives.
  
  
• Sponsor off the beaten path events that your competitors are neglecting. For instance, if I were a traffic/DUI attorney I'd consider sponsoring the half-time show at the local Monster Truck Show.
  
• Put together an endorsed mailing with the help of one of your happy existing customers.  If their a member of club or association get that mailing list and send the members a message that includes a lift letter from their fellow member (on the happy customer's letterhead) saying how great your product or service is.

Measuring and testing is the key to great marketing, but you have to have the right tools to monitor and capture relevant information to make good decisions. 

Hands down, call tracking is one of the best tools to help you do this because it gives you practical data over the course of your entire marketing campaigns and shows you precisely what's working.

Not mention all of the insight captured using our call tracking system is easily accessible online and can be used for future marketing purposes. I highly recommend anyone who is serious about measuring and testing their marketing use New Call Solutions call tracking system.

For more information about measuring and testing your marketing I recommend you look into the work of:

• Dan Kennedy
• John Resse

Copyright © New Call Solutions 2007

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