My title's ridiculous - I know, I know. It is also ridiculous that my poor blog has been neglected for so long... but no longer! Here we are, delving back into the pudding to find the proof... in other words, trying to figure out how to measure the success of marketing tactics, campaigns, etc.
My recent web wanderings have brought me to a blog post by Katie Paine, who via her blog has introduced me to two new terms of which I've grown rather fond of, rather quickly... "rigor" and "diversity". Paine uses these terms in reference to measuring your brand's strength on Wikipedia. And since, as Paine attests to, Wikipedia dominates organic search listings, this is something that we, as marketers, need to be paying attention to.
"Rigor", again, according to Paine, refers to the number of times an article is edited. "Diversity" refers to the total numbers of unique users (note - not readers, but users). And apparently, especially if you're a big brand, then these stats can be indicators of brand strength - as can measuring the sentiments of what is written about your brand in Wikipedia.
While I value the importance of non-financial measurements, I cannot help but wonder how this information, once gathered, might be acted upon. If you have poor Wikipedia rigor and diversity, what do you do? Or are these just symptoms of a greater disease for which the cure is a brand strategy overhaul? And if this is the case, what are some of the other factors that should be considered? While I love measurement, sometimes it's difficult to seperate what is essential to measure as opposed to what is simply interesting. Food for thought.
Showing posts with label measurement. Show all posts
Showing posts with label measurement. Show all posts
Sunday, March 28, 2010
Monday, January 26, 2009
Exclusive Interview with Zappos' CEO: Measuring Success Through Customer Feedback
According to Tony Hsieh, CEO of Zappos, the proof of the pudding really is in the eating - so to speak. When your focus is providing the absolute best customer service above all else, feedback from your customers is all the proof that you need to show that your marketing is working. Read on for Proof's exclusive interview with Tony.
Katrina: When did you launch Zappos Canada? What metrics did you look at before deciding to cater to this market? Do you have plans to launch any other geographically-specific sites?
Tony: We launched Zappos Canada several years ago in response to requests from Canadians that wanted to be able to shop from us. We actually did not look at any metrics. We do not currently have plans for othergeographically-specific sites, but we do ship internationally to some countries from our regular Zappos site.
Katrina: What types of marketing do you employ at Zappos, and how do you measure the success of your marketing programs?
Tony: Most of the money that we would have spent on paid advertising we instead put into the customer experience (such as free shipping both ways, surprise upgrades to overnight shipping, 24/7 customer service, etc.).We've grown from no sales in 1999 to over $1 billion in gross merchandise sales in 2008. The #1 driver of that growth has been from repeat customers and word of mouth. We really view anything we do to improve the customer experience as a form of marketing because it drives word of mouth.
Katrina: It's clear that customer service is key to everything Zappos does. How do you measure the success of your customer service initiatives?
Tony: We receive comments from our customers and we also randomly survey our customers.
Katrina: As your main sales vehicle, your website is crucial to your business. What types of improvements have you made to this site over the years, and how did you build up the business case for each of these?
Tony: We are actually in the process of launching a new site, which we are internally calling "zeta". You can find it here:
http://zeta.zappos.com/
Our original site was designed primarily to sell footwear. Today, we sell a lot more than footwear, including clothing, accessories, and even electronics. Zeta is designed to handle all the different product types.
Katrina: How is your marketing team structured and how large is your team?
Tony: We have a direct online marketing team that handles our keyword buys on search engines such as Google as well as our associate (affiliate) program. We also have a brand marketing team that handles some of our brand advertising, such as print or TV. Combined, our marketing team is about 15 people.
Katrina: What is your vision for Zappos ten years from now?
Tony: Hopefully 10 years from now people won't even realize we started selling shoes online. We just want the Zappos brand to be about the very best customer service and very best customer experience.
For the Zappos site, click here
For the Canadian Zappos site, click here
For Tony's corporate bio, click here
Follow Tony on Twitter
Katrina: When did you launch Zappos Canada? What metrics did you look at before deciding to cater to this market? Do you have plans to launch any other geographically-specific sites?
Tony: We launched Zappos Canada several years ago in response to requests from Canadians that wanted to be able to shop from us. We actually did not look at any metrics. We do not currently have plans for othergeographically-specific sites, but we do ship internationally to some countries from our regular Zappos site.
Katrina: What types of marketing do you employ at Zappos, and how do you measure the success of your marketing programs?
Tony: Most of the money that we would have spent on paid advertising we instead put into the customer experience (such as free shipping both ways, surprise upgrades to overnight shipping, 24/7 customer service, etc.).We've grown from no sales in 1999 to over $1 billion in gross merchandise sales in 2008. The #1 driver of that growth has been from repeat customers and word of mouth. We really view anything we do to improve the customer experience as a form of marketing because it drives word of mouth.
Katrina: It's clear that customer service is key to everything Zappos does. How do you measure the success of your customer service initiatives?
Tony: We receive comments from our customers and we also randomly survey our customers.
Katrina: As your main sales vehicle, your website is crucial to your business. What types of improvements have you made to this site over the years, and how did you build up the business case for each of these?
Tony: We are actually in the process of launching a new site, which we are internally calling "zeta". You can find it here:
http://zeta.zappos.com/
Our original site was designed primarily to sell footwear. Today, we sell a lot more than footwear, including clothing, accessories, and even electronics. Zeta is designed to handle all the different product types.
Katrina: How is your marketing team structured and how large is your team?
Tony: We have a direct online marketing team that handles our keyword buys on search engines such as Google as well as our associate (affiliate) program. We also have a brand marketing team that handles some of our brand advertising, such as print or TV. Combined, our marketing team is about 15 people.
Katrina: What is your vision for Zappos ten years from now?
Tony: Hopefully 10 years from now people won't even realize we started selling shoes online. We just want the Zappos brand to be about the very best customer service and very best customer experience.
For the Zappos site, click here
For the Canadian Zappos site, click here
For Tony's corporate bio, click here
Follow Tony on Twitter
Thursday, December 25, 2008
Back to Basics: Calculating ROI
Most of the marketing positions I've held have required me to demonstrate how my department's activities have produced a significant return on investment (ROI). I've learned that this seemingly simple concept is not as cut and dry as it might appear - even if we leave social media marketing and perhaps even traditional advertising out of the equation. Yet demonstrating the value of marketing activities has always been how I've proved that what I am doing is worthwhile.
Jim Novo, author of Drilling Down, makes the point that because there are so many ways of calculating ROI, the best way to calculate ROI is to use an equation that your company (ie your Board or CEO or CFO) finds relevant. How true. (You can read Novo's full article here.) Perhaps this should be step one in any quest for demonstrating accountability in the marketing department - determine what metrics the big bosses want to see.
In the earlier parts of my career, I did just that. When I calculated ROI, I took into account only the cost of acquisition and the resulting profit of a campaign (this was all that my "big bosses" wanted to see from me for a long time). As I progressed and became the manager of a department, however, I had to account for additional factors including the cost of staff salaries (my "big bosses" became even bigger bosses - CEOs and the Board and the like). My understanding of ROI changed as a result, and has continued to change with increasing responsibility and "higher" perspectives. The "higher up" I go, and the more I reflect, the more and more factors I believe I need to take into account. The more I learn about measurement, the more I believe that the results of the calculations I have relied upon only give me a glipse into the effectiveness of my marketing activities, and therefore how limited I have been in my ability to substantiate the value of marketing activities that relate to longer-term profitability goals.
The type of ROI calculation I am most familiar with - ie profit/cost of acquisition, is what Novo refers to as "simple ROI". As Novo points out, although this type of calculation is important, the results demonstrate only "front-end profit." These results ignore other important factors like the effect on the brand, customer loyalty and repeat purchases. According to Novo, these are all factors that can be measured, too, but the calculations are somewhat more complex. I'll delve into these areas in due course in this blog. I have always known that these factors were missing, but to date I have been unable to really find adequate methods for quantifying marketing's contribution to these areas.
In regards to web metrics, Novo suggests a very interesting model. It seems rather straightforward. In order to calculate the ROI of push campaigns where information is gathered through a company's website, especially where the campaigns are complex, Novo suggests that we might examine the revenue over any given period divided by the number of, let's say, unique visitors to the company website to determine how much each unique visitor is "worth". For example, if my revenues over one week are $1000, and I have had 100 unique visitors to my site, then by this calculation, each unique visitor is worth $100 to me.
I think this is a useful calculation, but I'm not sure I'm satisfied with assuming that my revenue is directly related to the number of uniques to my site. I think there are too many factors at play for this to be an accurate measurement. Still, I think that demonstrating the relationship between increases in uniques and increases in revenue are definitely worth looking into. If these were plotted in a graph over several months, or preferably, over several years, this would yield a benchmark for the ideal number of unique visitors to help stimulate revenue. I find this intriguing. I think this might be the case for a number of different methods of measurement - they are incomplete on their own, but taken with other relevant metrics they become more useful.
In fact, the more I come to understand about measuring the effectiveness of marketing activity, the more I believe that any marketer worth her salt needs to create a system of interconnected metrics to attempt to show progress towards company goals. Granted, this picture will always be incomplete because we cannot measure absolutely every effect for want of time, however if we choose a variety of the most important metrics, we will surely arrive at a more complete picture... and that complete picture may just save our marketing budgets (or our jobs), and I am convinced will absolutely allow us to speak from a stronger position when the big bosses want to see measurable results.
Jim Novo, author of Drilling Down, makes the point that because there are so many ways of calculating ROI, the best way to calculate ROI is to use an equation that your company (ie your Board or CEO or CFO) finds relevant. How true. (You can read Novo's full article here.) Perhaps this should be step one in any quest for demonstrating accountability in the marketing department - determine what metrics the big bosses want to see.
In the earlier parts of my career, I did just that. When I calculated ROI, I took into account only the cost of acquisition and the resulting profit of a campaign (this was all that my "big bosses" wanted to see from me for a long time). As I progressed and became the manager of a department, however, I had to account for additional factors including the cost of staff salaries (my "big bosses" became even bigger bosses - CEOs and the Board and the like). My understanding of ROI changed as a result, and has continued to change with increasing responsibility and "higher" perspectives. The "higher up" I go, and the more I reflect, the more and more factors I believe I need to take into account. The more I learn about measurement, the more I believe that the results of the calculations I have relied upon only give me a glipse into the effectiveness of my marketing activities, and therefore how limited I have been in my ability to substantiate the value of marketing activities that relate to longer-term profitability goals.
The type of ROI calculation I am most familiar with - ie profit/cost of acquisition, is what Novo refers to as "simple ROI". As Novo points out, although this type of calculation is important, the results demonstrate only "front-end profit." These results ignore other important factors like the effect on the brand, customer loyalty and repeat purchases. According to Novo, these are all factors that can be measured, too, but the calculations are somewhat more complex. I'll delve into these areas in due course in this blog. I have always known that these factors were missing, but to date I have been unable to really find adequate methods for quantifying marketing's contribution to these areas.
In regards to web metrics, Novo suggests a very interesting model. It seems rather straightforward. In order to calculate the ROI of push campaigns where information is gathered through a company's website, especially where the campaigns are complex, Novo suggests that we might examine the revenue over any given period divided by the number of, let's say, unique visitors to the company website to determine how much each unique visitor is "worth". For example, if my revenues over one week are $1000, and I have had 100 unique visitors to my site, then by this calculation, each unique visitor is worth $100 to me.
I think this is a useful calculation, but I'm not sure I'm satisfied with assuming that my revenue is directly related to the number of uniques to my site. I think there are too many factors at play for this to be an accurate measurement. Still, I think that demonstrating the relationship between increases in uniques and increases in revenue are definitely worth looking into. If these were plotted in a graph over several months, or preferably, over several years, this would yield a benchmark for the ideal number of unique visitors to help stimulate revenue. I find this intriguing. I think this might be the case for a number of different methods of measurement - they are incomplete on their own, but taken with other relevant metrics they become more useful.
In fact, the more I come to understand about measuring the effectiveness of marketing activity, the more I believe that any marketer worth her salt needs to create a system of interconnected metrics to attempt to show progress towards company goals. Granted, this picture will always be incomplete because we cannot measure absolutely every effect for want of time, however if we choose a variety of the most important metrics, we will surely arrive at a more complete picture... and that complete picture may just save our marketing budgets (or our jobs), and I am convinced will absolutely allow us to speak from a stronger position when the big bosses want to see measurable results.
Wednesday, December 17, 2008
Can trust be measured? Daryl Mather thinks so.
Related to loyalty, but not to a loyalty program, per se, Daryl Mather, Senior Reliability Consultant at Meridium wrote an interesting post about measuring trust. The article seems to target professional consultants, however the concepts apply to all types of, well, "reputation marketing" for lack of a better term.
What I love about the article is that it actually talks about REAL NUMBERS. And for me, REAL NUMBERS equates to accountability.
Mather suggests that trust can be measured in the following ways:
- % of business from repeat clients (Mather says 30% of your work should come from repeat customers)
- % of business from both passive referrals and auto-referrals, where passive referrals come from clients who refer you to others, and auto-referrals are the result of your blog, press about you, etc.
- quote strike rate - ie, how many quotes are accepted vs the number sent out
These are really simple metrics that could be used for many purposes. Substitute "quotes" for "personalized letter and brochure" and you have yourself a recipe for direct mail metrics, for example. Mather's post focuses on a client-consultant trust relationship, but this could easily be translated into a consumer-brand relationship. Essentially using Mather's metrics as a foundation, you could build a scorecard for any type of business trust relationship.
What I love about the article is that it actually talks about REAL NUMBERS. And for me, REAL NUMBERS equates to accountability.
Mather suggests that trust can be measured in the following ways:
- % of business from repeat clients (Mather says 30% of your work should come from repeat customers)
- % of business from both passive referrals and auto-referrals, where passive referrals come from clients who refer you to others, and auto-referrals are the result of your blog, press about you, etc.
- quote strike rate - ie, how many quotes are accepted vs the number sent out
These are really simple metrics that could be used for many purposes. Substitute "quotes" for "personalized letter and brochure" and you have yourself a recipe for direct mail metrics, for example. Mather's post focuses on a client-consultant trust relationship, but this could easily be translated into a consumer-brand relationship. Essentially using Mather's metrics as a foundation, you could build a scorecard for any type of business trust relationship.
Saturday, December 13, 2008
Measuring Social Media Marketing
In doing some research for this blog, I came across a great little article, written over a year ago by Michael Brito, Senior Marketing Manager, Yahoo! for the Search Engine Journal.
It's worth a read.
Brito suggests that measuring the effectiveness of social media isn't all that complicated. If you're using social media to drive traffic to your website, then you can use traditional web marketing measurement metrics (say that three times fast) such as "unique visitors", "time on site", etc.
In terms of measuring social media "at the source", so to speak, the metrics are quite similar and essentially boil down to how many interactions are had between target audience and interface.
At the end of the article, Brito points to the idea that these metrics still have to be related back to revenue, but doesn't give any suggestions as to how this might be done. I see this as key - afterall, if we don't know how much money ouractivities are bringing in, then is there a point to participating in the whole social media sphere at all? Looks like I'll be doing some more research on this topic.
It's worth a read.
Brito suggests that measuring the effectiveness of social media isn't all that complicated. If you're using social media to drive traffic to your website, then you can use traditional web marketing measurement metrics (say that three times fast) such as "unique visitors", "time on site", etc.
In terms of measuring social media "at the source", so to speak, the metrics are quite similar and essentially boil down to how many interactions are had between target audience and interface.
At the end of the article, Brito points to the idea that these metrics still have to be related back to revenue, but doesn't give any suggestions as to how this might be done. I see this as key - afterall, if we don't know how much money ouractivities are bringing in, then is there a point to participating in the whole social media sphere at all? Looks like I'll be doing some more research on this topic.
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