Joe Leider

Lead management and nurture tactics have become complicated, and measuring success more convoluted. Long nurture series contain infinite permutations to test: length of an email, types of content, how to deliver, what to send in different stages of the buyer life cycle, even the relative speeds of a nurture track. Segmentation rules can further complicate what used to seem like a simple exercise: passing good leads to sales to make more money.

Market research can help you assess your strategy, discover what your prospects want and give you feedback on how you can meet their expectations. Surveys can be an ongoing exercise, interspersed different points of engagement to figure out how a prospect’s psychology is changing while he receives your efforts.

How can market research define your lead management strategy? Well-planned customer visits, focus groups and surveys will help you:

• See how a potential prospect views your product buying cycle
• Determine the attributes of your product among your competitors that are most important in a purchase decision
• Identify the content that has the most impact on a prospect
• Identify the means of communication that correlate most to moving your prospect down the path to a closed deal
• Uncover areas of expertise where potential customers view trust as key to influencing their purchase behavior
• Discover other ways your prospects research products like yours; where they go, which other white papers they find interesting among your competitors’ content, or how your content compares to that of your competition.

Many of these points relate to the competition. In your own company hierarchy, you can forget that competitors are always finding better ways to showcase and sell their products. Prospects, in researching their own purchase, are also keeping an eye on the competitive landscape. Harness that knowledge through surveys to refine and improve your own lead management efforts.

Ongoing surveys can helps you gain insight into how competitors are approaching the same marketing problems you are. With the requisite sample size, proper questionnaire design and appropriate analysis, you can see not only how your products compare in the minds of potential consumers, but you can rate the skill in which you deploy various marketing tactics. For example, prospects can tell you how your whitepapers or videos compare to competitor content according to different criteria. Or the whitepaper can be broken down into attributes, which a prospect can judge separately.

The key is to think of your lead management strategy as a product in and of itself. After all, you are providing content, content that a prospect pays for with time. If you compare the different aspects of your “product” – that is, your marketing efforts – to those of your competitors, then you will develop trigger marketing tactics that suit your comparative advantages. Using focus groups or open-ended surveys will help you discover the attributes that prospects use to frame their decisions, and then a quantitative validation survey will let your prospects and customers rate those discovered attributes against those of your competitors.

Not only will surveys help you re-focus your strategy on what works holistically, but you can also use the answers to score your leads, and help those leads make a psychological confirmation that they do indeed have a strong interest in your products. When you give prospects a better marketing experience than the competition from this feedback loop, you will win more sales.

Some companies do not think about competitors, believing they operate in a vacuum. Others obsess about the competition, but in a way more akin to that ex-girlfriend (or boyfriend) you can’t quite get over. Anecdotal ‘sightings’ of the competitor at industry tradeshows or chatter from prospects and customers force a company to realign their entire strategy every couple months. But this sort of retooling is only a manic reaction to perceived threats. Flipping out every time a competitor chalks up a success or steals a client is not a good way to do business. For a proper competitive analysis, you need to take a step back and collect as many data points as possible. Do not ignore your competitors by any means, but do not fixate on them either. You have no reason to change your overall strategy unless sufficient data tell you to do so. A sales person complaining that “they’re stealing my prospects” is not sufficient data.

What method should you use? Below are six basic steps to conducting a competitive assessment. If you would like a live report, Spyglass Intelligence is now selling a competitive assessment of the magazine publishing industry, from where some of the visualizations below are taken.

1. Understand your industry and the strategies competitors are using: Before you even begin thinking about whether you are “winning” or “losing” vs. your competition, take a step back and try to understand your industry. A good place to start is doing a Porter five forces and/or a SWOT (strengths, weaknesses, opportunities, threats) analysis of your own company and your competitors. By listing perceived strategies along with whether a competitor is doing well or poorly in that area, you can start to see some correlations. Below is a sample assessment of six large, multi-brand consumer magazine publishers with a rating by each of the five forces — the number of plusses equals relative strength in that area (click here for a full article on Porter’s Five Forces in consumer magazine publishing).This part of your analysis is meant to familiarize yourself with the big-picture movements in your industry. It is not where you will draw your conclusions, but rather a baseline for conducting the rest of your assessment.
2. Find data (secondary, then primary research): With just the framework from a SWOT or Five Forces analysis, you will have a high-level understanding of the forces at work in your industry, but you will not have any confirmation as to whether certain business strategies are succeeding or failing. To confirm the hypotheses you made in your first framework, you will need to find as much data possible about your own company, your competitors and your industry as a whole.This data can be classified as either primary research or secondary research. Secondary research is any piece of material already available to you through the work of others (past market research done in-house, investor relations annual reports, trade association numbers, or syndicated reports. Always start with secondary research as it is cheaper, more available, and quicker to compile. Syndicated research may cost anywhere from nothing to thousands of dollars.SAMPLE SECONDARY RESEARCH: VISUALIZATION OF THE TOP 12 CONSUMER MAGAZINE PUBLISHERS

   

   www.spyglassintel.com/visualization-of-circulation-revenue-for-the-top-12-us-consumer-magazine-publishers

   Once you compile your secondary research in an understandable way, you may want to do some primary market research — focus groups, customers visitors and surveys — to dive deeper into how your prospects and customers feel about your products vs. those of your competitors. For this you will want to figure out which features (or attributes) your market finds important. From this, you will be able to compile a competitive strengths inventory of how your prospects and/or customers feel about the attributes of your products vs. those of your competition.

   SAMPLE PRIMARY RESEARCH: VISUALIZATION OF SURVEY RESULTS FOR A COMPETITIVE STRENGTHS INVENTORY

   

   www.spyglassintel.com/interactive-market-research-sample-subscriber-survey

3. Create success metrics: While you look at data to further understand your industry, you will want to create metrics to recognize success or failure over time. These metrics could be anything from: a) Size: Total revenue, number of clients, circulation, etc.b) Profitability: Net profit, cash flow from operations, revenue/cost, clients/employees, circulation revenue/issues published, etc.c) Returns: Return on assets, return on equity, etc.

   For non-public companies, your metrics will need to be creative as the array of financial information in annual reports is unavailable. Also, when you choose a success metric, remember that growing large, taking market share and increasing revenue are not necessarily good measures of whether a strategy is working. Sales and marketing tend to obsess about growth, but profitability and returns on investment are far better determinants of success and failure. As an example, Reader’s Digest Association has grown its overall circulation and revenue over the last ten years, but only emerged from a 2009 bankruptcy in 2011. Look for metrics to pinpoint these issues.

 

4. Refine the understanding of your industry based on data: Review your earlier work with Porter’s Five Forces and SWOT to see if they still make sense in light of the new data you have collected. If not, refine and revise your understanding so they fit the overall narrative you are building about your industry.

 

5. Correlate strategies vs. success over different time frames: Try to correlate the different strategies you see your competitors using against your success metrics. Is there a relationship? Has this relationship changed over time? Do those changes make sense?Below is a graphic from our competitive assessment of the top 12 US consumer magazine publishers, that shows a success metric on the x-axis (% growth in revenue per issue) and an overall strategy on the y-axis (% of revenue from single-copy sales).Here, single copy sales does correlate to success in the consumer magazine business, but this correlation has flattened in the last 3 years. Perhaps the recession has hit retail sales of magazines harder than subscriptions, making single copy sales a somewhat less effective tactic to employ in harder times.

 

6. Benchmark over time: Remember that the competitive environment in your industry is always changing. Set aside time every quarter, six months or year to compile the same analysis you did above so you can spot changes as they happen. See which moves your competitors are making, and assess those moves strategically.

To conclude, make sure you have a framework for understanding the possible strategies in your industry, and whether or not those strategies are working. Do not get caught up reacting to every single move your competitor makes with fear and stress. But do not ignore what’s happening in the wider world beyond the four walls of your business. Instead, understand how those in your industry are striving for their own advantage, which seem to be succeeding and failing, and why so that you can leverage your own strengths to create your own business success.

We have all noticed the explosion of SPAM since we started using email. The CAN-SPAM act slowed SPAM for a little while, but not long. In fact, the most aggressive emails we get seem to be the ones we want, Groupon Offers, Living Social deals and, most pertinent to our discussion, those that showcase content within our particular field of expertise. Direct marketers get an array of email focused around different marketing tactics, or the new webinar released by the DMA. Some of us are engaged in these emails, though I suspect many of us keep receiving them out of guilt, or some need to “keep in touch” with our profession without really doing so.

Why do we send and receive so many emails? Because the economics of email favor more interaction. The incremental cost of sending an additional email could be $0.10, $0.05 or even  nothing if you pay a set subscription price for your email platform. The return on investment for email marketing is therefore extremely high. Just 1 response in 100, or even 1 response in 10,000, may mean a positive return on investment. Even in a demand generation campaign where 1 interaction only correlates to a 10% increase in the likelihood to buy, with a product price of $20,000, that 10% likelihood equals $2,000. Therefore, if you pay $0.10 per email (which is high), then you might be willing to send 20,000 emails to get that 1 interaction, for an awful 0.005% response rate.

Do not take this article as an excuse to start spamming your prospects, because while 0.005% may be acceptable from a business standpoint, it seems morally unjustifiable. But it does illuminate the curious economics of email marketing, where incentives always point to more email rather than less. And this means email from everyone. You didn’t think that you were the only one emailing your prospects, did you? If an email recipient is properly researching different solutions to his problem, he probably receives emails from all your competitors as well. That means that, even if you maximize the response rates for emails your prospects receive, they will still receive too many emails than optimal because competitors are doing the same.

That means, to maximize response rates to your emails (clickthrus, downloads, webinar attendees, direct sales), you may need to send more or less email. Say, for example, that prospects decide who to choose by the perceived level of engagement from a prospective vendor. You send email once per two weeks while your competitor is sending emails every day. That difference in engagement may lead your customer to believe that the competitor has more supporting material, and thus better products. But what if one of your prospects just cannot stand the aggressive communication? Then your competitor’s email series will turn him off, and you may end up with the sale.

You may be thinking, “But I don’t know what my competitors are doing.” And you won’t. Even if you signed up to receive every email they send, the combination of activity-driven triggers on a competitor’s site means that there is no way you can figure out how they approach various prospect segments in your market.

So you’re stuck. You and your competitors send more than enough emails to your prospects, knowing full well that you are competing for his attention. That is the economics of spam, and it is leading marketers to the sort of anecdotal judgments about email marketing that should have been long banished by more effective analytical tools.

There is an answer, and that is to survey your prospects and customers. After nurturing prospects and customers for a certain period of time, ask them questions about which other competitors they considered, and who else they are receiving email from. Conceptualize your demand generation strategy so that you can divide it into attributes, allowing prospects and customers to score those attributes vs. competitive marketing programs. You will notice differences — in scores by competitor considered, between customers vs. prospects, from segment to segment, etc. All these variations will point you towards your own competitive advantages that your marketing should showcase, and the weaknesses you can work to improve.

Market research is somewhat more subjective than measuring exact response rates, or correlating views of certain content to direct sales. But in sacrificing objectivity, you will start to look at metrics that really matter instead of those metrics which are just available. It is always better to find inexact answers to pertinent questions, than exact questions to irrelevant answers. And with ever more email being sent by more and more companies, simple clickthru and conversion rates are becoming less relevant every year.

As a publisher you may be thinking, why should I even worry about lead scoring? Lead scoring is for longer sales cycles, where you have to think twice before passing a prospect to a highly-paid sales professional. Circulation marketing is about finding the right tactics for prospects, then converting those prospects en masse to paid subscribers.

This view misses the multi-dimensional nature of direct marketing. Two conversion tactics may yield dissimilar results, with highly varying ROI and gross sales. The chart below shows three scenarios using three different direct marketing tactics…

In this example email yields the highest ROI ($6,000 revenue / $300 cost), direct mail the highest profit ($15,000 revenue – $3,000 cost) and telemarketing the highest sales ($50 x 600 conversions). The obvious choice here is direct mail as it yields the highest net profit.

But it feels like a missed opportunity to increase sales, if only you could capture that higher conversion rate on telemarketing. Lead scoring helps you have it both ways. You can profile best-performing prospects by different factors, then use those factors to determine who will receive higher-cost marketing. To illustrate this, assume that prospects with different levels of web activity convert to paid subscribers at varying rates:

You can approach more active prospects with costlier marketing. Assuming that your segment divides nicely into thirds, you could email low-quality leads, send direct mail to those scored with medium activity and call those with high activity, with the below results:

Using this simple strategy, we can add “Mixed” to our list of promotions below:

In this case, email still yields the highest ROI, but a conversion strategy utilizing mixed tactics per varying lead scores maximizes sales and increases our profits from $12,000 (direct mail) to $24,900 (sending email, direct mail or telesales based on lead score).

When a lead stems from a source with poor conversion rates, or has a poor demographic profile, then you would score him low and send campaigns up to a certain cost level where ROI remains acceptable. When another lead comes from a better source or has a “buyer’s” job title, he could receive expensive follow-up efforts like direct mail or telemarketing. Maybe some combination of the two converts at an even higher level, enabling you to conduct multiple, multi-channel follow-ups over an extended period of time.

Incorporating web activity can help you score with better data than even demographic or source. When an identified prospect clicks on a certain piece of content, you can use that click to showcase a related information product. And the more activity a prospect takes, the higher up the chain you can send them so that an expert, expensive sales representative may even get such a great list of prospects that she can make a huge profit, even at higher cost.

Think of lead scoring as a segmentation strategy, but one that breaks out your segments to the most granular level, allowing you to measure how each segment performs according to various tactics. Putting that information together, you can run multidimensional campaigns to prospects based on compiled profiles. If someone clicks on an email, send him another. If he clicks twice, call him. If he expresses some interest, follow up even more.

In addition, as information providers, you may want to expand into corporate sales of information packages. But how do you qualify your thousands of subscribers as corporate leads? By adding subscribers to various nurture tracks, you can send them “meta-information” about your content, gauging their interest by talking about a group subscription. Their activity in that series can then build up a lead score, which you will then use to qualify for a sales follow-up.

Build your lead profile on a combination of demographic profile and recent activity, and then report on the differing response rates of each group across different marketing efforts. Using those results, you can then construct a lead scoring program that will preserve ROI where necessary, but go for profitability when the opportunity presents itself.

Below are two related articles:

• Using Marketing Automation to Sell Group Subscriptions
• Moving Beyond Implicit and Explicit Scoring