Marketing Whims
Whim: 1. An idea, vision, passing thought, or fool notion. 2. What It Means.
Saturday, April 08, 2006
The Problem With Marketing Measurement (Part 1)
Problem #1: Marketers don't distinguish the point of influence from the point of sale.
Here's my point: Nearly four out of ten credit card applicants who researched their decision online went to a Web site as a result of a direct mail offer -- more than those who went to a particular site as a result of a banner ad or email offer (source: Forrester Research). And many of these online researchers went on to apply for a card online.
So who should get credit for the sale -- the direct mail channel or the online channel? In most financial firms, the online channel would get credit for the sale.
The problem here is that while the online channel took the order, it wasn't the channel responsible for creating awareness of the offer, and may or may not have been the channel that influenced preference.
This can lead firms to make some bad decisions. At one large brokerage, low response rates for direct mail offers is prompting execs to consider shutting down the direct mail channel for acquiring new customers. But what they don't know is whether or not new accounts opened online and over the phone are from customers who entered into conversations with the company as a result of a direct mail offer.
After all, for highly considered decisions like mutual fund decisions, IRAs, and 529 plans, should this brokerage really expect that new customers will open new accounts and send money in response to a piece of paper they get in the mail?
In the past, maybe this firm experienced 2% response rates for campaigns. But with increased product sophistication, more investors researching their decisions, and the greater availablity of information online to help investors validate their investment decisions and submit account applications, is it really any wonder that account opening forms submitted through the mail is slipping?
But the decline in order submitted through the mail does not diminish the channel's role in creating awareness of the offer.
Financial firms of all types should follow the example set by Capital One whose direct mail offers provide offer codes for prospects to enter online (which helps not only measure the effectiveness of the campaign, but offers prospects the added convenience many consumers look for in order to apply online).
What is your firm doing to determine the point of influence?
For more on this topic, please go to my active site, Marketing ROI: Whims From Ron Shevlin
Here's my point: Nearly four out of ten credit card applicants who researched their decision online went to a Web site as a result of a direct mail offer -- more than those who went to a particular site as a result of a banner ad or email offer (source: Forrester Research). And many of these online researchers went on to apply for a card online.
So who should get credit for the sale -- the direct mail channel or the online channel? In most financial firms, the online channel would get credit for the sale.
The problem here is that while the online channel took the order, it wasn't the channel responsible for creating awareness of the offer, and may or may not have been the channel that influenced preference.
This can lead firms to make some bad decisions. At one large brokerage, low response rates for direct mail offers is prompting execs to consider shutting down the direct mail channel for acquiring new customers. But what they don't know is whether or not new accounts opened online and over the phone are from customers who entered into conversations with the company as a result of a direct mail offer.
After all, for highly considered decisions like mutual fund decisions, IRAs, and 529 plans, should this brokerage really expect that new customers will open new accounts and send money in response to a piece of paper they get in the mail?
In the past, maybe this firm experienced 2% response rates for campaigns. But with increased product sophistication, more investors researching their decisions, and the greater availablity of information online to help investors validate their investment decisions and submit account applications, is it really any wonder that account opening forms submitted through the mail is slipping?
But the decline in order submitted through the mail does not diminish the channel's role in creating awareness of the offer.
Whim: Financial services firms need to track new accounts opened across channels and tie those account openings back to their direct mail (and email and banner ad) campaigns to measure the influence of direct mail.
Financial firms of all types should follow the example set by Capital One whose direct mail offers provide offer codes for prospects to enter online (which helps not only measure the effectiveness of the campaign, but offers prospects the added convenience many consumers look for in order to apply online).
What is your firm doing to determine the point of influence?
For more on this topic, please go to my active site, Marketing ROI: Whims From Ron Shevlin
Ron Shevlin, 4:43 PM
2 Comments:
Anonymous, at 12:26 PM
No, Ron's not joking (the guy never even smiles... just stare at him for a few hours..)
BUT, to be constructive, think AIDA, Awareness-Interest-Decision-Action. In most cases Awareness comes from many different sources, then prospects gain Interest through interaction with one, maybe two (e.g. on-line and a call to a call center for more info). What you want is the Interest point(s) to proactively support Decisions. You MIGHT then get the customer off the phone, onto the web-site, for Action. Only simple value props will be handled with one vehicle.
What do I know,... I read Shevlin!
BUT, to be constructive, think AIDA, Awareness-Interest-Decision-Action. In most cases Awareness comes from many different sources, then prospects gain Interest through interaction with one, maybe two (e.g. on-line and a call to a call center for more info). What you want is the Interest point(s) to proactively support Decisions. You MIGHT then get the customer off the phone, onto the web-site, for Action. Only simple value props will be handled with one vehicle.
What do I know,... I read Shevlin!
Direct Mail...? you have got to be joking...I see direct mail following the same path as newspapers...dying a slow death. Direct mail has morphed into web banner ads..and email marketing .that's where the action is now.. direct mail will continue to increase in expense due ever increasing postal rates!
agree?
Mike J.
I'll register later..:)