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FutureNow Article
Friday, Oct. 24, 2008

Attaching a Dollar Value to Marketing Efficiencies

By Bryan Eisenberg
October 24th, 2008

In the column, “Online Marketers Can Weather the Financial Crisis,” I offered action items for dealing with the economic downturn.

My goal is never to be a doomsayer, but rather to be prepared for the reality of the market — good or bad. And that includes recommending common sense actions to shore you up and provide a bullet proof vest for more difficult times.

Reality is, when down times arrive, most companies first look to the marketing department to trim costs. This is not because marketing has the least value; it’s typically because marketers usually do a poor job of tying marketing to direct revenue. This is easily fixed.

Conversion rate optimization should be the last thing you should consider trimming. Here is why.

Shot Across the Bow

We are already beginning to see signs of the economy slowing, “The New York Times” reports on brick-and-mortar sales:

    Sales at Dillard’s dropped 12 percent, compared with a 7 percent decline last year. J. C. Penney’s same-store sales fell 12.4 percent, compared with a decline of 3.7 percent for the period a year ago. Sales at Kohl’s decreased 5.5 percent, compared with a 3.2 percent decrease last year. At Bon-Ton Stores, same-store sales decreased 4.6 percent, and they declined 3 percent at Target.

And, here is Heather Daugherty, research director at Hitwise, discussing the Web economy:

    At Hitwise, we have been tracking these various economic indicators very closely and are now seeing a similar trend in visitation to the websites of retailers, particularly during the past few weeks where the economy has become top-of-mind for the majority of Americans. Last week, traffic to a custom category of 500 retailers (excludes auctions, classifieds, DVD rentals, and book/music/DVD of the month clubs) declined 5% from the same week during the previous year.

The number above that is causing online marketers to lose sleep is the 5 percent decline in visits. For most of us, a decrease in traffic means an equal decrease in sales.

So what happened to this traffic? Did all of these retailers decide they needed less traffic? Did they stop buying ads? A few perhaps, but not all 500 retailers. This is direct result of consumer’s behaving differently due to economic concerns.

Could your company survive a steep decline in traffic? A 10 percent or 20 percent decline?

Take Control of What You Can

For starters, marketers must acknowledge they have far less control than they think. They must also get a firmer grasp on what they do actually control.

You do not have control of the economy. While you may have some influence on the search engines, they are not under your control either.

So now is a good time to get serious about what you do control: the customer experience. By optimizing the experience you reduce the risk of taking a steep incline.

If you need to understand the math or you are trying to get buy in from your organization have them read this column.

Tying Efficiencies to Dollars

Last but not least, you should not be using traffic or even conversion numbers exclusively. Everything you do should be tied to a dollar value. Not only will this show the value of your work, it could also help you sort out priorities.

What are you doing differently in light of the economy? Let me know.

*Cross posted in ClickZ.

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Comments (9)

  1. Now is def. the time to make your customers and clients feel very warm and fuzzy. Customer service should be at its peak because it will be increasingly difficult to bring in new clients but also hold onto existing ones. While other big players might be cutting back on marketing now is the time to hit it even harder. From an SEO standpoint companies might find it easier to poke through there competition online now than ever before.

  2. Hi Brian, for us this means more connections to real people, via Twitter and blogs and offline networking events. It means finding out how we can provide value to their lives and their business. It means more sharing, and more focus.

    We don’t anticipate a steep decline in anything we do – but we will be more selective of who we spend time with. It’s not a $$ thing, it’s a connection thing because the connections drive the $$.

    This article is fab! Sent to my Twitter followers as a must read.

  3. I’m with Nick – this is the time to dig in and really impress your customers. It’s amazing to me that so many big companies in serious trouble, like the major banks, seem to be providing worse service than ever before (and it was pretty lousy before, IMO).

    I’ve encouraged a couple of clients whose industries are in a rough spot to invest in site optimization and testing, and we’ve managed to keep them stable while all of their competitors are losing ground. When the markets recover, all of this investment should mean real gains.

  4. Although alot of the comments are about site optimization, but similar actions apply to traditional marketing. Now is the time to make ceratin every dollar is spent most effectively. Unfortunately, during down times marketing is not going to be as effective. Yet cutting back on marketing is also wrong. Building and enhancing your customer relationship is key and marketing has to be the primary driver especially during the dreaded recession.

  5. As a citizen of a country with a developing economy (South Africa) our currency has devalued against the dollar and that has really pushed up my marketing spend on google.

    This has forced me to stop being lazy and optimize more, looking for better and more targetted keywords.

    Other than that, I’m reading about efficiency to help me on my way.

    Counting everything that I do as cost is a principle that I’ve always tried to follow, but if I look at it, I’m spending a lot of time on marketing.

    But I guess if I don’t have the clients that I need, time to throw in some more time! I try to work smart thought, not just quantity.

    Any other tips?

  6. The discussion on customer service is very appropriate; in these days of impersonal service and convoluted web experiences, simply facilitating customers contacting you can make a difference.

    I would also say that focusing on the most efficient and effective marketing extends from tactics to customers as well. Understanding the value of your customer as well as the strength of the relationship can help you prioritize your spending not only on the right channels, but on the right customers as well.

  7. I agree that it’s time to show quality to your customers because at this point of recession everyone is making a wise decision on how their business will grow.

  8. I can’t agree more about customer service. I was unfortunate enough o have to call Dell the other day. The 3rd person I was transferred to spoke english finally; however, their limited training and scripts they must follow was unable to solve my problem.

    Well trained, and preferably local, customer service is such a winner these days and will earn my business in a second.

  9. The 3rd person I was transferred to spoke english finally; however, their limited training and whose industries are in a rough spot to invest in and testing, and tactics to customers as well. site optimization the other day. scripts they Understanding the value of your customer we’ve managed to keep them stable while all

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Bryan Eisenberg, founder of FutureNow, is a professional marketing speaker and the co-author of New York Times and Wall Street Journal bestselling books Call to Action and Waiting For Your Cat to Bark and Always Be Testing. You can friend him on Facebook or Twitter.

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