Saturday, February 05, 2005
To Kill A Marketing Channel
When it comes to marketing, not all channels are created equal. Despite our best efforts at success, sometimes nothing we do seems to generate the necessary return. It may be time to kill off that channel and allocate the marketing resources elsewhere. Now before you run to get that fat trimming knife, let's be clear: this is an entire channel at stake, not just a single initiative, so you'd better be sure you've got some measurement tools in place and have been tracking data for some time to make an informed decision.
Not too long ago I was asked to make a recommendation along these lines with a channel we call "Conferences." The company had participated in at least 6 major industry conferences during the course of the year and at an average of $15,000 — $20,000 to attend/sponsor each, the question became "are these giving us the bang for the buck we want?"
Thankfully, we had been tracking employee development time on each initiative so that this measure plus the cost of the event sponsorship gave us the data we needed for a fairly straightforward Expenses metric. Next, because we captured lead data according to prospects, qualified leads and opportunities, we could determine a cost-per-prospect, cost-per-lead or cost-per-opportunity (with the latter being the most important). While we did a decent job of bringing in prospects, our cost-per shot up dramatically for qualified leads and opportunities because very few initial prospects converted into true new business opportunities.
From a numbers standpoint, it was clear — our Conferences channel was not a good spend of marketing dollars this year and therefore it would likely get little or no resources in the next year. This brings up an interesting point: while it's easy to get caught up the numbers game, we also must consider other less tangible value that a channel may bring. In the case of our Conferences channel, because of the high-level attendee audience in our key demographic, there was value to being seen at such events. It helped position and credential company management as thought-leaders in the industry. Because of the brand positioning value of some of these events, we ultimately chose to attend only one or two of the conferences in the next year.
In the end, be certain you've adequately examined all of the benefits and returns of a channel — both tangible and intangible — before you let the knife fall.
Not too long ago I was asked to make a recommendation along these lines with a channel we call "Conferences." The company had participated in at least 6 major industry conferences during the course of the year and at an average of $15,000 — $20,000 to attend/sponsor each, the question became "are these giving us the bang for the buck we want?"
Thankfully, we had been tracking employee development time on each initiative so that this measure plus the cost of the event sponsorship gave us the data we needed for a fairly straightforward Expenses metric. Next, because we captured lead data according to prospects, qualified leads and opportunities, we could determine a cost-per-prospect, cost-per-lead or cost-per-opportunity (with the latter being the most important). While we did a decent job of bringing in prospects, our cost-per shot up dramatically for qualified leads and opportunities because very few initial prospects converted into true new business opportunities.
From a numbers standpoint, it was clear — our Conferences channel was not a good spend of marketing dollars this year and therefore it would likely get little or no resources in the next year. This brings up an interesting point: while it's easy to get caught up the numbers game, we also must consider other less tangible value that a channel may bring. In the case of our Conferences channel, because of the high-level attendee audience in our key demographic, there was value to being seen at such events. It helped position and credential company management as thought-leaders in the industry. Because of the brand positioning value of some of these events, we ultimately chose to attend only one or two of the conferences in the next year.
In the end, be certain you've adequately examined all of the benefits and returns of a channel — both tangible and intangible — before you let the knife fall.
Joseph Mann Saturday, February 05, 2005
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