Pear Analytics

Below is a video tutorial of an example of how you can correlate offline media efforts to web traffic, and essentially understand the effectiveness of your offline media.

I use Clicky Web Analytics to help measure the the effectiveness of offline media because it can track visitors down to the street level. All of the other analytics tools I have used only go to the city level. (caveat: this isn’t exact, so don’t knocking on people’s doors or anything! Use this for relative measure of density in areas of a city).

How can marketers use this data? Well, I can drop a direct mail piece and a few days later see if I have a concentration of visitors in the neighborhoods the piece was dropped. You can do the same thing with billboards as well, although it may be more beneficial to place the boards in the areas with the most concentration (or least if you are after brand awareness). This could even work great for a nation-wide television campaign, to where you could follow-up with direct response marketing to the areas with the highest concentration of visitors.

Anyway, watch this short video and if you’re not already using this tool, get Clicky!

No Comments »Tags: analytics, Clicky, offline media, Web Analytics

A story written by Laura Lorek (@lalorek) of the San Antonio Express News – February 25, 2009
Every Friday at 4:15, Salesby5 has a “pity” party in the lobby of its offices on the North Side that lasts 15 minutes.

“It’s not a happy hour,” said Erik Darmstetter, founder and CEO of the company. “We spend a few minutes feeling bad about the economy and then we get on with business.” Their business is helping companies improve sales.

PHOTO BY DELCIA LOPEZ/STAFF delopez@express-news.net Nan Palmero (from left to right) and Erik Darmstetter of Salesby5 and Ryan Kelly of Pear Analytics meet at the Salesby5 office. Salesby5 and Pear Analytics are two of the recent S.A. startup companies.

Darmstetter offers guests one snack-size bag of potato chips on a paper plate to share and a drink from the bar that contains some beer and sodas and a few bottles of booze.

Despite the gloom and doom, Darmstetter and Nan Palmero, one of Salesby5′s six employees, see opportunity in the recession as businesses struggle to maintain and to increase sales.

Palmero, who is active on Twitter, a microblogging site with millions of users, views social media and networking as a way to share knowledge and to tap into diverse resources. That’s helping to foster an entrepreneurial spirit locally, he said.

In San Antonio, dozens of small startup companies have sprouted in the last year, including IncSpring, Blellow, Pear Analytics and Third Party Code. The entrepreneurs often work together, meet for lunch and exchange ideas on Twitter.

“Many times, the very best companies are started in down times,” said Dennis Murphree, founder of Murphree Venture Partners in Houston and a Rice University professor of entrepreneurship. “The best thing about down times is you’ve got no where to go but up.”

If an entrepreneur has a good idea, in good times or bad, funding will come, Murphree said. Microsoft and Dell were both started in economic downturns, he said.

The problem is that Texas lacks a strong venture capital industry, Murphree said. Eighty percent of the funding comes from out of state. Less than 25 venture capital companies exist statewide, he said.

That’s why many entrepreneurs turn to savings accounts or friends and family to start up their ventures.

After being laid off from his banking job last October, Wes Wilson founded IncSpring, a freelance marketplace for graphic designers. It makes money every time someone sells a corporate logo, domain name or Web site design on the site. The sellers come from 131 different countries, and the average sale is for $475, Wilson said.

“2009 is the year of the entrepreneur,” he said. “Everyone is looking to create their own brand.”

That’s what Mandi Leman, founder of Blellow, is counting on. She’s launching an online marketplace and social network for freelancers in test mode this Sunday to 1,000 people. The public launch is scheduled for March 13 at South by Southwest Interactive in Austin.

“Any group that needs a place to collaborate or connect can join,” said Veronica Jorden with Blellow. “We’re targeting entrepreneurs and freelancers.”

The hope is experienced entrepreneurs will share their knowledge and expertise with people who are turning to freelancing as an alternative while jobs are hard to find, Jorden said.

Ryan Kelly founded Pear Analytics, which analyzes data for companies, a year ago. Companies are turning to measurement tools to improve the performance of their marketing campaigns online and to make sure they get what they pay for, Kelly said.

“Very few companies understand analytics and what’s involved,” he said.

Vid Luther, who earned $150,000 in 1998 working for New York-based DoubleClick, started Third Party Code in 2008. It acts as the “outsourced chief technology officer” for companies. He works with IdeaGin, Blellow, Salesby5, IncSpring and Pear Analytics.

“People who have worked for bigger companies are getting laid off,” Luther said. “People are getting more creative and risk taking.”

No Comments »Tags: erk darmstetter, sales by 5, san antonio startups

I came across this excellent four-minute video by Phil Fernandez, President and CEO of Marketo, and he explains the importance of nurturing your sales leads into actual sales. He says that 50% of your leads are not yet ready to talk to a sales person, and are not ready to purchase. By properly engaging with these prospects, through webinars, emailing white papers, etc., we can, over time, get 70% of these leads ripe for sales. This is the “consideration” stage of the Awareness – Consideration – Purchase steps in all marketing efforts, as described by colleague Steve Patti of Polarity. Here is the video:

2 Comments »Tags: ROI, sales funnel, sales leads

I am a big fan of WordPress, primarily for it’s search engine performance. I have been ranked to #1 or #2 for some select search terms relatively quickly (less than 1 month), and I can usually find a new blog post indexed within a couple of hours. Here are my favorite WordPress plugins, and feel free to vote for your favorite at the end:

1. All in One SEO Pack – this is a great plugin that will help manage all of your SEO automatically. Each time you post a new blog it will attach a title tag, meta description and keywords per the settings that you determine.

2. Google XML Sitemaps – this is a nice way to keep Google automatically informed of any updates you make to the site. XML is the protocol Google prefers to get updates, and you can monitor your sitemaps using Webmaster Central. While this won’t directly affect your search results, it will give the crawlers an efficient way to gather information from your site.

3. Redirection – this plugin will take care of all your 404 issues and properly redirect them to existing pages. This can happen if you go back and change your slug on a a page or blog post. Google Webmaster Central also has a utility to detect your 404′s. This one will only work for WP 2.7.

4. Tweet This – one of my favorite plugins, where it will include a Tweet This, Ping This, Digg This or Plurk This button (various styles) at the bottom of your post. Not sure why they chose Plurk over Stumble, but the new release has nice Apple-ish buttons and more control over where you want the buttons shown.

5. WPtouch – my new favorite plugin which re-draws your blog layout fit for an iTouch or iPhone. I love the simple layout and ease of navigation. Really simple to install.

6. AddToAny – this plugin will incorporate a dropdown of all social media links. Works similar to Share This, but the button itself has more recognizeable bookmarks that folks are familiar with.

7. Math Comment Spam – an additional filter to Akismet, this plugin will add a field to submit a comment that will be “2 + 4 = ” and the person submitting will simply need to enter the answer. This plus Akismet, and I have gotten zero spam so far.

Based on these plugins, which one is your favorite?

No Comments »Tags: SEO, wordpress

If you like tinkering with your website, then you have probably heard of A/B or multivariate testing. This is where you can quickly test new things on your website, such as copy, images, call-to-action buttons, placement, etc., and see which combination effectively leads to more conversions. A/B testing is essentially testing two versions against each other that could be completely different, where as multivariate testing assesses multiple areas of the page and tests all possible combinations. So, if you had 3 versions of a headline, 3 versions of an image, and 3 versions of a button, you would have 27 possible combinations in a multivariate test.

Traditionally, multivariate testing has been where each possible combination gets equal play; meaning each combination is displayed equally to your traffic. Once a visitor is exposed to one of the test combinations, they are given a cookie so that each time they return while the experiment is still in progress, they will see the same combination. Google Website Optimizer is considered a traditional multivariate testing tool, where their algorithm will determine the winner based on how many combinations you have, and how many visitors is required to statistically determine a winner.  Their model shoots for a 12% minimum improvement in conversion rate at an 80% confidence level.

Now we have what’s called adaptive multivariate testing, which is offered by a company called Hiconversion. What they do is the same multivariate set up, but instead of giving equal play to each possible combination, they only test page combinations that are consistently performing in producing conversions. They claim that their methodology dramatically reduces the amount of traffic required to reach a statistically correct “winner”. This real-time adaptation also reduces the amount of loss leads or sale conversions that a typical test can produce.

Courtesy of Hiconversion.com demo presentation

This is sort of how Google AdWords works when you opt for the “auto-optimize” feature, which instead of displaying your ads evenly, they display the best performing ads more often.

Well, I personally was never a believer in AdWord’s optimization feature. I thought they determined a “winner” way too early, and so I’ve always turned off the optimization feature, and did my own split testing within the ad groups themselves.

I also had the same disbelief for the Hiconversion tool initially. First of all, how could you really determine a winner if all combinations were not played evenly? If one was played more than the other, then of course that combination would win!

So I began to ponder about the mathematics involved with this (I know…that’s what I do). First let me start by saying that I do not know how the Hiconversion algorithm works (I did ask them, but they said they would have to shoot me), so this is just my rationalization.

Let’s imagine that our multivariate test had 100 possible combinations. As the testing starts, each combination gets equal play, or 1%. The algorithm can quickly see which combination is starting to get higher conversion rates until it reaches a point to where it begins to test itself. (Bear with me). So if a few combinations are “starting” to look like good performers, the algorithm might say “OK, you got 5 conversions on 100 plays in X time…let’s see if you can get the same 5 conversions or better for the next 100 plays in the same time period.” If the combination meets or exceeds the mini-test, it moves up to the next “level” where it is now played 3% of the time, where if it doesn’t, and lets say it falls to 4, or 3, then perhaps it stays among all of the other combinations that are tested at 1% play. So the combinations in the experiment keep getting tested in this manner until there are only a few left, where a “winner” prevails. All of this happens very quickly, and in real-time. It’s kind of this survival of the fittest scenario because the combinations that can’t leap into the next levels, actually get played less and less over time, since the ones that are performing are eating up their play time.

Anyway, that’s my take on how it might be working, but again, I didn’t design the tool. My ultimate experiment would be to do identical experiments in Google Website Optimizer and Hiconversion and see if they arrive at the same result. Of course, I can’t be experimenting with all of our clients leads and sales, so maybe I’ll try this on my site one day.

10 Comments »Tags: A/B testing, conversion tracking, conversions, multivariate testing

Amidst the worst financial crisis since the Great Depression, companies are slashing jobs, slowing growth and cutting costs. One of the first costs to get cut are usually in marketing and advertising.

Marketing in a down economy requires you to measure the performance of each campaign.

The problem is the direct correlation between marketing and advertising efforts, and your sales needle. Companies are pressured to cut costs, yet maintain or grow sales, even in down economies. They are going to be forced to do more with less, and be more efficient with spending.  Well, the reality is that you should be doing that anyway and your agency should be helping you achieve better marketing performance.

Are you measuring the results of your marketing and advertising efforts? What if you end up cutting something from the budget that is working? The concern is that companies are widely slashing efforts with high acquisition cost, cutting loyalty and reward programs – all of the things that could be producing the best results.

We recently wrote a post on measuring the lifetime value of the customer, and here is another example of how we can use this kind of data to make these crucial decisions.

In the simplified example above, we look at four different types of marketing channels.  Each has a varying cost per acquisition (or the cost to get a new customer), and we assume that each new customer channel contributes the same net margin per month over varying tenures  (a.k.a. lifetime value of the customer).

If you are not measuring cost per acquisition and lifetime value (LTV), you may be quick to decide to slash the efforts with the highest costs – in this case everything except direct mail.  This is precisely why we like to compare each of these using the Effectiveness Ratio, which is defined as:

Effectiveness Ratio: Value / Acquisition Cost

where Value equals Net Contribution Margin/Mo. times Tenure.

We can quickly see that eliminating paid search would be a detriment to long-term sales.  If we had to cut costs, perhaps we should cut public relations and direct mail in this example.  Also, I am not discounting the sheer number of customers that each channel produces either, hence this is a simple demonstration to point out the importance of marketing measurement, and the types of measurement you should be making.

I’m Not Measuring This Way – How Do We Get Started?

There are some basic data capturing mechanisms you can use to get started on the path to better marketing performance.

1.  Track the source of the sale. Having your front desk attendant asking “how did you hear about us” may not be the most accurate way of measuring leads, so we use software applications to help track the lead all the way to a sale, such as Salesforce.com, or if you want to control the software on your server, you can download a free version of Sugar CRM.  Also, use things such as dedicated 800 numbers or unique website URL’s to segregate promotional offers on print or broadcast channels.  Online advertising continues to be the easiest to track and one of the most cost-efficient channels to producing sales.

2.  Track Spending Per Channel. Track your spend on each campaign effort separately.  Ask your agency to breakdown the costs of direct mail, paid search, and other things rather than sending invoices with general “agency fees”.  Agencies markup media buys, including online buys, so know what they are and how it affects your ROI.  Now that you have your campaign costs and leads broken down into each channel, you can now effectively track ROI and cost per acquisition.  This will factor directly into your net contribution margin and should be subtracted from the revenue earned from sales.

3.  Track Customer Spending – use your CRM system, or if you are a retail organization, your POS system to track customer spending.  Try to uniquely identify the spending by customer ID or email, rather than just by store location or geography.  This gets you to the additional granular detail to further segment your data later by usage and spend, and can do wonders in your lifetime value calculations.  We can also develop patterns to help re-tool marketing efforts by being more relevant and targeted.  From this data is where lifetime value calculations are born.

Are you ready to roll up your sleeves to track the right data and get lean and efficient in your marketing?

3 Comments »Tags: better marketing performance, cost per acquisition, lifetime value, LTV, marketing performance tracking

You’ve probably seen one of these recent Bud Light commercials from their new “Drinkability” campaign. I’m still wondering what the hell “drinkability” even is….sounds like another made-up ad agency phrase, like “brand immersion” or “holistic ideation”.

So while the ad agency is worried about coining phrases like “drinkability”, we’re off worrying about “measurability”. The agency will argue that these types of phrases “resonate through to the consumer” and that it creates “brand recognition” – all true points. But how do you measure the impact of this campaign, and was it the messaging that drove more sales, or the fact that you bought more reach and frequency in your media buy? There is a direct correlation between buying X more dollars of media will result in Y more dollars of sales, but at some point, it levels out and you end up spending more to get nothing. Do you know where this point is?

What if you turned off the advertising for a while? What was the impact?

We had a discussion today about the disparity between brand promise and consumer experience. How does Bud Light measure that? Ideally, you would like for everything you say in your marketing and advertising to live up to your customer’s every expectation. What happens if it doesn’t? How is social media going to affect my brand if I can’t deliver on my “drinkability” promise?

Well, I’m sure that Bud Light and their agency have it all figured out. In fact, I’m going to pick up some Bud Light right now!

2 Comments »Tags: brand promise, marketing, measuring broadcast