Measuring ROI on B2B marketing activity in a multi-channel environment.
Most B2B marketers today struggle to measure and allocate expense and return to various marketing efforts. The interrelationships between sales and marketing activity like direct mail, email and telephone sales, for example, are complex and confusing. It’s tough to know true cause and effect when dealing with multiple communications activities to both customers and prospects.
Here are a few “best practice” suggestions.
- Where possible, make sure all the activity you undertake has a built in tracking mechanism or “source code” so that you can directly track as much as possible. This may be accomplished by using unique 800 numbers, pre-coded fax order forms, unique URLs or landing pages. Most B2B marketers can directly track 30-60% of their orders these days but the trend is downward.
- Conduct “match back” data processing of sites/individuals and orders/sales to marketing activities such as mailings, email campaigns or telephone contacts. Merit Direct (www.meritdirect.com) has the best B2B match back logic and software, check them out. You will have to establish allocation rules that will reflect your assumptions about which activity had the most impact on delivering the customer/order. For example, if you mailed a catalog within the last month and sent an email within the last week and the customer ordered something from the catalog and from the email you may wish to give the catalog 75% of the credit (for promoting the item ordered) but the email 25% credit for, theoretically, reminding the customer they needed to order. Yes, these rules are somewhat arbitrary but hopefully intuitively better than no allocation rules at all or giving 100% credit to the last activity regardless.
- Make sure you examine your online order to see which ones came from proprietary or branded search terms and which came from non-branded terms. If the customer did a Google search on your brand name you can hardly give your web team (and investment) credit for the full value of that order. Most B2B merchants take the majority (i.e. > 50%) of their orders online today but their offline marketing activity still “makes”, instigates or creates the demand in the majority of cases.
- Make sure you are looking at recency, frequency and monetary at both the site (discrete geographical address) and the name/individual level and comparing changes to your marketing programs. In B2B the site creates the need/demand and the individual is usually just the order processor. Individuals also come and go but site need/demand remains and you should measure your ability to maintain and grow that revenue year over year.
- Provide your customers an explanation of why the source code you are asking for is important and what’s in it for them. Also, test giving them incentives like special pricing, advance sale notice and added services. Properly train, incentivize and monitor your customer service reps also to collect the tracking information and monitor them for success.
- While you do you best to track and allocate at the order level never forget to monitor the “big picture” first. Track total mailings, e-mailings, and phone calls monthly and quarterly and compare that to overall trends in revenue and new site and name acquisition. It helps to have the big picture relationships in your mind before you go granular with tracking of specific programs and codes.
Comments or questions are welcome.