Why Marketing Analytics Is More Than Just A Coversion Rate

When I first ventured into the Marketing Analytics realm so many years ago, analytics were simple.  All we needed to know was how many visitors made it our site and from where, and then how many of those converted to trials and sales.  You can easily satisfy marketing stakeholders by slicing these conversion rates into their area of focus, be it Affliliate, Online, Email, or Offline to name a few.

But, over the years since I have to say that Marketing Analytics have evolved into quite a profound and somewhat complicated science that is even more fascinating.  As time passed and companies struggled to control Customer Acquisition Costs (CAC) and Marketing budgets got slashed at the same time, Marketing execs found themselves having to dig deeper for a few reasons.

First they had to justify their current CAC by tapping into the Finance metric of Customer Lifetime Value (CLTV).  They then had to dive into cancellations to understand Drop Rate to see how many of their new customers were “sticky” versus “loose” (we called these net zero customers, who purchase and leave in the first month).   It used to be that Revenue was key, but many Marketers have learned that Revenue metrics are slow to respond to changes in the acquisition funnel.  Hence the need for Drop Rate and CLTV by acquisition to compliment conversion rates.  But then a fundamental shift in marketing came just a couple years ago.

Social media is the latest marketing fad.  The most difficult thing about this fad is the lack of measurement.  Facebook “likes”, Twitter followers, mentions and wall updates are extremely difficult to translate into a monetary return on investment (ROI).   Successful companies have invested a lot of into creating and maintaining their brand, which pulls money away from more traditional and easily measured channels.  While cancellations and CLTV are not directly impacted here, the health of a social media campaign can only be judged by how much it enhances the brand.  Along side our conversion rates, we see “interaction metrics, such as responses to tweet and wall updates.  You see, if your social media guru is posting stuff that your customers do not comment on, your guru is not a guru.

Not only do marketers  have to know if your customers interact on Twitter, but they also need to know how their customers use their products.  So, marketing should have readily available metrics from the CRM/product/content teams such as % usage rates, % support calls, as well as product personas.   If your company uses the Net Promoter Score, heck, marketing should have access as well.

What does Marketing Analytics look like today?  Well, those conversion rates are enhanced by post acquisition metrics.  However, it isn’t as easy as it seems.  In order to provide marketing with the enhanced data sets they need to compete in today’s corporate world, they need the support of Business Intelligence & Web Development teams to tie everything together.  There is nothing worse than having a great product and not knowing anything about your customers because no one ever thought to implement unique customer tracking on the website.

While Marketing Analytics today are a bit more complicated compared to a few years ago, it is a fascinating place to be.  Marketing is one of the few departments that really need a global view of the company, the product, and the customer to succeed.  As an Analyst, this viewpoint is a goldmine for data geekery.

When wast the last time your Marketing team looked beyond conversion rates?

Data Perspectives – Trial Users

One of the keys to getting customers hooked on your SaaS product is offering a free trial.  Letting someone experience your product for free for seven to thirty days is a great way to establish trust with the potential customer, let them experience the product, and also gain insight into how they will use the product (customer segmentation).

On a recent project, I was reviewing data for a client and noticed a very interesting pattern in the login histories (not really, but we will call it logins since the real data can’t be shared) for trial users.  This particular client offered a 7-day credit card trial with auto convert to a selected plan (i.e. monthly or annual).    What I expected was a nice curve from day 1, declining each day, relatively smoothly and then an increase in logins after conversion.

However, after summarizing the login data for the first ten days of service (including 3 days for the auto convert), I found a sharp decrease in logins from day 1 and day 2, as well as a blip on day 6. See the chart below.

What was even more fascinating is how the other analysts and “experts” at the company interpreted this data.  Some of the comments are below:

  • “Wow, people pay us and use less?” – referring to the drop is usage on day 8 after becoming a paying customer
  • “Those auto convert reminder emails are working, driving usage!” – referring to the increase in logins one day prior to trial end on day 6
  • “Looks like we need pay per login” – referring to the sharp decline in logins from day 1 to day 2
  • “If we can get the customer to use beyond day 4, we have them!” – not sure how this really fits in as we haven’t correlated logins with LTV, yet
  • “People are cheap” – referring to the people logging in on day 6 to use the product prior to cancellation
  • “If you are going to login to cancel your auto convert on day 6, wouldn’t you try the product one last time?” – again, referring to day 6

The chart is quite simple, a single line with 10 data points.  What isn’t simple is really what this data means.   In fact, I don’t think we can make a decision directly from this data. Rather we need to further understand what the trial users are actually doing on day 6 and how users with logins on day 7 compare to the users on day 1 (is this a bad a marketing channel).  It would also be great to dive into patterns of logins just prior to churn or trial cancellation.

What fascinates me the most, is not only the different perspectives on the data, but the deeper questions that come out of the data.  Data and customer insights are evolutionary.  The more you know, the more you ask questions and the more the decisions and knowledge evolve.

Those Simple Gifts

A gift does not have to be big nor expensive and it must be given without any expectation of something given back in return.

Receiving a gift from someone, be it advice, an unexpected phone call, or even a small quarter can be powerful tool. It triggers those warm fuzzy feelings that makes us feel great. It makes us feel like we are valued and respected.

Gifts should be a regular part of any customer experience. Whether you give the gift of top notch customer service, free products, or incredible ease of use, gifts can separate you from the competition.

Don’t Forget the Details!

Today, I received my package from Starbucks containing two packs of their new VIA ready brew instant coffee.   It is not available locally here in Santa Barbara until the 29th of September, but you can order it online.  I am impatient so I order one pack of Italian Roast and one pack of Columbia and had it shipped. This was my first time ordering from StarbucksStore.com.

Opening the box, I was surprised to see a wonderful appreciation message with warm regards and a free pack of After Coffee Mints.  After digging through the package and extracting my goodies from the peanuts, I realized that something was missing from this Starbucks experience.  It was the detail of refined packaging with a human touch.

1) The appreciation letter is printed and feels more institutional.  Perhaps a signature at the bottom from someone at Starbucks would make it more personal and make me feel like I am reading something more important than an insert.

2) Opening the box and finding peanuts is old school and does nothing to inspire me to order again.  If Starbucks is going to use peanuts, be creative! Why not use peanuts in the shape of lattes or coffee beans?? Make the experience unique and you make it personal.

While I am extremely pleased with my order, transaction, and buying experience, I expected a more personal, unique experience from Starbucks.  Nothing stood out to me unpacking my order…  so un-Starbucks.

I firmly believe that if you have fun with the details and provide the customer with a unique experience, they will love you forever!

Communication Can…

Communication can be a powerful thing.

Communication can bring synergy to the workplace.

Communication can save customers and increase revenue.

Communication can get you a raise.

Communication can get you through traffic and avoid congested areas.

Communication can get politicians elected.

Communication can solve problems.

Communication can make us happy.

Communication can …

What can communication do for you, personally, professionally, or romantically?

Need Intelligent Software

Today on Seth Godin’s blog, Seth posted a bit of a rant titled The End of Dumb Software. Seth brings up some great points about access Notes and the logic behind 2 am meetings.   Perhaps it has become time for software to be a little more intelligent and user friendly.  I am surprised that a company like Apple has not already given intelligent software with logic.

Building Confidence in Your Customers

One of the most important qualities to companies is that their customer have confidence in their product.  So, how do you build confidence in your customers?  Simple, honest, heart-felt interaction.

Selling
When you interact with a customer, whether it is online, via email or phone, remember that you are NOT selling a product.  You are selling a relationship built of trust from human to human.  Discussing the customer’s needs and your product’s abilities in common terms is the best way to the customer’s heart. Throwing in some simple compliments too won’t hurt.  Even if the customer does not buy, you still want them to walk away with warm fuzzy feelings that you helped them

CRM
Remember, customers are human and do not like unexpected occurrences. Communicate with your customers frequently regarding product upgrades, changes, service windows, and even outages.  No one likes being left in the dark.  Look at it as an opportunity to have fun and communicate in creative ways. When something goes wrong, be creative with your apology. Heck, who can get angry at Twitter’s whale or Cox’s Digi. The more effort you take to talk to the customer and inform them, the more they know you care and that is confidence inspiring!

Retention
Let your customers go, but be sad about it. Holding a customer hostage is not going to help them or your business. Allowing your customers to leave when they want, opens up the front door and builds their confidence.  No one will buy a car that they are going to be stuck with.   When they cancel for reasons within your control, listen, listen, listen. While you lost them now, making it clear that you heard them loud and clear during cancellation gives them confidence in returning later.  Let them leave on a heart-felt, positive conversation.

By following some simple rules, you can build an overwhelming amount of confidence in your customers.  So much so, referrals may some drive more business than your outbound marketing campaigns.  If so, this is the best compliment a business can have… you know your customers are confident in your business, interactions, and product.

YouTube Is For More Than Laughs

When I saw this article by Medical News Today, I did a classic double take of the headline:

Clues To Brain Injury Symptom From YouTube Videos

When I talk about patterns and collecting data, finding new, cheap, and creative sources of data is often what separates the truly remarkable from the ordinary research projects.   Conducting brain injury sympton research via YouTube’s “funny” videos is certain a cheap and creative way to help save someone from sustaining further injuries:

Their findings could have immediate value in helping coaches make educated, objective decisions about whether to return an athlete to play after a blow to the head.”

You can read the rest of the article at the headline above.

This is further proof that social media has a growing value, not just in terms of marketing, sales and collaboration, but in helping our society make smarter decisions.  Since patterns, creativity, inspiration and data are four of my lenses, I might start taking another look at Twitter; not as a marketing tool, but as a resource for learning more about human behavior patterns.

Cheers!

Lessons in Customer Experience

Today I had the pleasure of seeing both sides of customer experience; the good and the bad.

First, the bad.  I received a voicemail from the membership department of the gym I am a member of (Goleta Valley Athletic Club), announcing that I had won some free personal training sessions.  I was stoked, especially after spending many thousands of dollars with one of their trainers over the past few years.  Finally, something free. Not quite.  After speaking to the gym and informing them of my history (they didn’t know who I was and never looked at my account), they said I was ineligible because I had already been training.  The drawing was for new members only. Make sense, although the gym just shot themselves in the foot.  Here’s why:

1) No where was there fine print to announce that current members already training with a trainer were ineligible.
2) Pronounced me winner before getting their facts straight.  How hard is it to look up a name?
3) They announce me as a winner and then revoke the winnings, never offering any type of compensation.
4) At no time prior to the announcement did the gym bother to check my history, which would have eliminated my entry, prevented the phone call and I would have been none the wiser.
5) Even after knowing my membership status and becoming aware of my value to their, did they seem to care.

While apologetic, the gym has burned one of their more valuable members.   I have a call into the general manager to discuss the problem further, so I will keep you all posted.

(Update 9/5 – I was at the gym today and they clearly changed all the signage and wording around their alleged drawing to “win free personal training.” The entry forms clearly state that the drawing is for first time clients only.  I am happy to see the gym being more transparent with their eligibility rules.)

Now, the second; the good.  On the heals of being treated poorly by the gym, I went to a popular, health food eatery here in Santa Barbara.   I was so impressed with the service, I couldn’t help but leave a $3 tip in their tip jar.  The gentelman whom took my order was courteous, answered all my questions, and showed sincere interest in helping me make the right salad choice.  They even gave me a discount because it was Labor Day weekend (not quite, but I’ll take it).  Not only that, but the food was brought to me with a smile and a huge Thank you for choosing them. They even shook my hand.    In addiiton, the receipt not only has coupons that I will actually use, but it details the nutritional value of my meal.  The transparency, service, and food blew me away.  I am so happy that good people and good companies still exist. (Check out Silvergreens – Santa Barbara)

It is interesting to me that both of these experiences happened back to back.  After getting burned by my gym, I was not happy to have to order food.  But the food experience was so good, I left smiling! After sharing these experiences, I hope you walk away with the power to think about your day to day experiences with the people you choose to do business with.  Please make your own decisions based on the customer experience.  If companies value you, they will show it.  If they don’t, walk away and give your money to the ones that do value YOU.  It is the power of the consumer.