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Hi again folks, Jim Novo here.

Tracking the performance of direct marketing campaigns is typically relatively simple - you pretty much know who you are targeting.  But what do you do when the campaigns are not distributed to known targets, the marketing culture is not particularly fond of measuring performance, and you're given the mandate to track Marketing Productivity?  That's what we face in this month's newsletter question.

We also have a couple of great article links on what's going on in the Brand Marketing world, and a blog post on how our old friend Pareto might be messing with your analysis.

Let's get with the Drillin'...

Best Marketing Productivity Articles
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Great Brands Never Rest  (5/25)
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From Target Marketing Magazine, this article embodies what I (and many customer-centric Marketers, I believe) think about when the subject of Brand and authentic Brand Advertising comes up.  The six disciplines of a Great Brand are outlined.

RockStar CMO's Out  (5/4)
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According to AdWeek, CMOs with agency backgrounds (code for Brand-ing folks? As opposed to real Brand Managers) are being replaced by those with a broader career experience across several disciplines.

To access these and other reviews of recent articles on Marketing Productivity with links to the original articles click here.

Sample Marketing Productivity Blog Post
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Waiting for Pareto
May 13th, 2007

Many folks look at the world through the lens of the Gaussian Bell Curve when the real model they should be looking at is Pareto Power Law.  In English, that means when you are “optimizing”, you could be driving towards a suboptimal result if you’re not paying attention to the difference between the two models of behavior.

More on Waiting for Pareto...

You can subscribe to the Blog by e-mail if you want to,
 just go to the Blog home page.

Questions from Fellow Drillers
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Tracking Un-Trackable Campaigns

Q:  I have a background in direct marketing and the measurement of campaigns using defined sources.  Now I am working at a technical or 2 year college and I'm trying to use my previous knowledge and experience to measure our return on marketing efforts in recruiting new students and converting them from prospects to enrolled students.  

I'm looking to measure events and all of the advertising and promotion used to communicate those events as well as  other campaigns.  It's difficult to measure since it may include newspaper ads, direct mail, posters, etc. - not just direct mail with a measurable list to refer to.  

Plus, trying to get the admissions folks to track leads can be  difficult.  They also want to track return on publications (brochures, flyers, etc.)....not sure how one would do that if they are not mailed to  a given measurable list?  

I'm looking to track ROI based on the whole equation....from the # of inquiries who came to an event or responded to whatever all the way to whether they matriculated and enrolled in courses.

A:  I can feel your pain!

I don't think there are any easy answers to this.  You could simply measure what you can measure through the traditional direct methods you are familiar with, and let the rest "ride".  Or, you can try to selectively determine, as best you can, what the value of all these other activities is by engaging in some kind of testing. This will take some institutional willpower and is probably something you can't do on your own. 

In other words, I encourage you to start evangelizing the next generation of marketing measurement at the school.

From your title, I perceive you don't "report to" marketing, but some higher institutional level responsible for Quality and perhaps Productivity /  Accountability for funds that are spent.  It sounds to me like your unit might perhaps report into the Financial area of the school at a higher level, and if so, that's good!

I think I would simply start the conversation with folks in the financial area about some of these issues, and see if you can create some simple tests to get some "direction" on the contribution of the various marketing outlets.

For example, every publication should contain some kind of tracking device.  Sometimes you have to be creative with this idea and it won't always be accurate, but it's better than nothing at all.  If response is generally by phone, then try to get a unique phone number for newspaper ads, brochures, etc.  If response is driven to the web site, get unique URL's put  on each document.  If response is filling out a sheet or card at an event, have them numbered or coded in some way.  Then of course, you need to get the response information - number of phone calls to each number, number of visits to each unique web site URL, number of response cards mailed or  turned in for follow-up.

Implementing a program like this, then finding and getting access to the response info may not be easy, and that's why it would help to have a "higher power", particularly a financial one, backing this effort.  It's pretty amazing what people will do when, for example, the people who control the budget for an area say, "You will participate in this tracking program".

Alternatively, you could go with a test / control kind of scenario where during a quarter, you leave out one particular marketing effort and see if there is an impact on overall Marketing Productivity.  This is more of a "marketing mix" kind of approach and not without some problems, including proving the missing marketing effort was responsible or not for changes in Productivity.  You have to think about how you might pin these issues down in advance - for example, do you have good baselines for "normal" activity?

Whether or not you decide to pursue all of this is somewhat of a personal choice.  Some analysts simply don't think it is their "job" to help create measurable structures - they only measure what can be measured.  Others see the difficulty as a challenge, and want to help build out the structure.  Clearly, if you are going to eventually be responsible for measurement, being a part of the team constructing the measurement paths is a real  advantage to you.  It will involve some politics, but analytics always involves politics at some level.  I encourage you to seek out the support 
you need to make this work.

If there is "pressure" for measurement, someone wants it to happen. Start by finding these people and having a conversation about how it could happen, the strengths and weaknesses of the measurements, the internal challenges you will face.

When taking on something like this, it's usually best not to try to change the world all at once, but one step at a time.  So, for example, looking at the overall "unmeasurable budget", what is the largest line item?  If it's "newspaper", that's a place you probably have the largest leverage.  Implement there first, keeping in mind that this single implementation might help you down the road.  For example, getting a unique phone number and results tracking for newspaper may teach you a lot about how to get this done for other marketing devices.

The finance people should be able to provide you with some idea of the net "margin" of a course and any other financial ideas that come into play.  Then it's a matter of asking if the spend on the media generated positive  results.  If the margin on a course is $500, a newspaper ad costing $1000 that only generates 1 student is not a great investment - but it might be the best one relative to other vehicles.  This part is not really your call.  Your job is to bring the data to life so that people can understand what they are spending and what they are getting.

There could be plenty of reasons why "losing $500" on a newspaper ad is OK - there is "brand exposure", for example.  In this case, the brand exposure only costs $500 versus a perception that it costs $1000, if the student  generated is included in the formula.  This may be a very positive result of the measurement for many folks in the institution.  That judgment is really for someone else to make.  Now at least they are making it on a full set of facts as opposed to perceptions.

Q:  However, how long do you keep measuring enrollments?...they may not enroll  based on one campaign...might take a few hits before they actually become students.

A:  Sure.  What seems reasonable?  Given an annual budget cycle, let's say reasonable is 12 months.  One benefit from your tracking is you will be able to probably put some numbers against this eventually.  If you get calls to a brochure number 2 years after it was issued, then the number is 2 years for a brochure.  Newspaper calls stop coming in at 4 weeks, it's 4 weeks for newspaper.

Q:  The other issue: the marketing folks only want to measure up to inquiries--what they have control over.  What's the best way to only measure the return on that...it's before a "sale" or "enrollment" even occurs.

A:  Well, sometimes you simply have to decide what is "best available".  You certainly can start by measuring inquiries, especially since it's pretty clear in this case marketing lacks some control over key conversion  elements - financial aid, student abilities, and so forth.  Down the road, it's possible that certain types of media generate lower quality inquiries with lower conversion rates.  You'll get there.  

For now, you could apply the "average conversion" to any lead to get down to the financial part of the game.  If all leads on average convert at 25%, then just use that.  Then when tracking gets a wider reach, try to drill into it more deeply.  To do this, you'd have to get access to enrollment data, of course.  But you don't have to get "all the data, all the time".  You could do a sample of a couple of months and go through it by hand to match back to inquiries, if you have to.  You certainly would not be the first to do something like this 
to pin down an issue - it happens all the time.

Whether you want to do something like a "by hand count" or see it as part of your job is really more of a personal choice.  You can certainly - and analysts often do - blame a lack of knowledge on system problems, politics,  whatever.  Just can't get the data.  For some people "don't know" is not acceptable - they have to find the answer, whatever way they have to do it - even if it is by hand!

Q:  Does your book give an education example?  We're not "selling" a product and "sales" deals with # of credits taken by students & price per credit plus funding we receive from the state gov't based on the number of FTEs generated.  It seems like such a different animal so I'm struggling to figure how to do ROI for an educational services provider.  I have created an Excel template based on how I calculated ROI for other industries but haven't tried it yet.

A:  Sounds like the "profit" side of it is a bit complex with the outside funding, but I'm sure you can get to a "value per FTE" somehow. Just start with something, and make it better as you move along.  If you have to, simply take "all revenue" divided by number of FTE's and you at least have a  place to start.

The book doesn't have extensive educational examples but there are several related discussions in past newsletters, see:

Predicting Student Churn

Profiling Library Customers

I have a lot of interest in these educational measurement scenarios for a variety of reasons.  Keep me posted on how you are getting along and ask any questions you might have as you make your way through.  If I can be of help let me know!

Jim

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That's it for this month's edition of the Drilling Down newsletter.  If you like the newsletter, please forward it to a friend!  Subscription instructions are top and bottom of this page.

Any comments on the newsletter (it's too long, too short, topic suggestions, etc.) please send them right along to me, along with any other questions on customer Valuation, Retention, Loyalty, and Defection here.

'Til next time, keep Drilling Down!

- Jim Novo

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