The major purpose of the offer is to persuade customers to accept the call to action. This is best accomplished by matching the offer to the value proposition for each segment. We will look now at the mechanics of preparing an offer. There are four elements of the offer message: offer details, goals and measures, offer value, and call to action. All may be varied by customer segment, although the offer details, goals, and call to action may be the same for all segments. If the value is the same for all segments, then you have not identified any that are meaningful and actionable. This may be your intention, but make sure that it is a conscious decision or go back to the drawing board. In any case, don't waste your time trying to measure differences between segments when all the message elements are the same.
We must be very clear that everyone involved with the project understands exactly what is being offered, the desired result, and how we will be able to tell whether the project has been successful. We need first to be sure that we completely understand what the specific offer actually is. The entire project team (from finance to manufacturing to product marketers) will participate in this step. Valencia's offer is shown in Table 18-4.
Offer | Offer Details |
---|---|
1. Trade-in discount | 15 percent off 825 or |
20 percent off 827 or | |
25 percent off extra filter | |
2. New service contract with reduced rates | 35 to 50 percent rate reduction, depending on configuration |
The details describe the specific offer elements that must be clearly represented in the offer message.
Next, we have to determine the objective of the offer to be made. What is it exactly that we hope will happen? The goals need to be measurable (and the measurements decided up front) so that we know when we have achieved them.
Like any company, XYZ's goal, frankly stated, was to increase company profit – period. Generally, increasing revenue or reducing cost can accomplish that; these are the guidelines we use to determine our goals. The offer objective(s) must deliver one of these two company benefits, and we have to understand how it will happen so we can measure results.
XYZ's main goals for Valencia were to sell a specified number of new 82x series systems and to reduce the number of 815 and 817 installed products under support contract. Table 18-5 outlines the stated objective for the Valencia project.
Objective | How Impacted | |
---|---|---|
Sell 150 Series 825 or 827 systems to the targeted customers within six months | Increase revenue | High margin from new 82x products |
Reduce number of support contracts on 815 and 817 systems owned by targeted customers by 35 percent | Reduce cost | Reduce 81x machines on support contract because cost to deliver has gone through the roof. |
We're hoping customers will take us up on our offer because we have been able to persuade them of its value. (Remember that customer loyalty means loyalty in the absence of contradictory information. That's right, only customer disloyalty is truly emotional and can't be overcome, no matter how convincing your argument). How do we measure success?
Obviously, one way to measure success is to count the number of orders for these products that come into the call center from the targeted customers. But what about calls that came from the target audience but instead of placing an immediate order they asked for more information? Surely, that is a better response than ignoring the whole thing. For any type of offer there is a continuum of possible responses, as shown in Figure 18-2.
So how should we measure success? Obviously, some of these actions are hard to measure. How do you know that a customer has put the offer into a folder to talk about with her sales rep instead of tossing it into the garbage? You won't know unless you can spend the money to call every customer and ask – and that's simply not feasible. We can measure results only when the customer takes one of the actions that involve actually contacting the company. All of the “below the line” actions count as initial failures, even though some will actually produce results down the line.
Hmmm, this is a dilemma; we have some customers who just called for information and others who didn't even call. But it's very likely that some of them will eventually make a purchase.
So how do we measure the full impact of the project? We apply common sense and experience. We also need to count project response calls that don't produce an order and project initiated purchases that come through the sales force. To track project calls, we need a way of knowing what precipitated the customer's response. Measuring direct sales rep orders means, well, do we have to get the sales rep to tell us? No. Sales reps should spend their time in front of customers, not sitting in front of a computer entering data that doesn't help them manage their accounts. Let's get real; no sales rep really believes that anything beside his own sales technique influenced any of his customers to place an order anyway. We're not making much progress so far, but there are some good approaches that do work.
One such approach that works very well is the lead management funnel. Put all inquiries into your lead management system. Once there, it's marketing's responsibility to contact the lead and ask questions agreed on with the sales force about what constitutes a qualified lead that should be passed to the sales force (see Figure 18-3).
Once qualified, the lead should be passed to the direct sales force or to the outbound telesales team depending on the project and the desires of the customer. Steven's Lead Generation Handbook provides some excellent information on lead qualification and conversion.
Of course, this still leaves us with the question of how to recognize that a project related purchase has been made if the customer didn't take the exact action called for (e.g., place an order using the toll-free number provided).
One of the most effective means, and one used often by catalog direct marketers, is to slightly change the product number for each project. For example, a two-digit suffix appended to the end of the product number can track up to 100 different projects for the same product, and if you combine letters and numbers you can track even more. When the order is placed, we get the information that identifies the source of the order. The problem: Many companies have legacy systems that don't know how to handle a product suffix and can't process the order.
Another mechanism is to ask the customer for the media code printed on the offer. Variations include a dedicated post office box or toll-free number used only for that project. Sometimes, companies can set up their phone system so the customer is asked to enter a “telephone extension” after they've reached the call center. This is another familiar direct marketing method, but unfortunately it doesn't work very well when sales reps take the order. Variations of this method include special e-mail accounts, fax telephone numbers and so on.
A final method is to use the information you can collect to determine an approximate result. Match the site (household or business location) of any order placed during the project timeframe to the target list. This may slightly overstate results (some target companies may have already been ready to buy the new product). In most cases, the overstatement is minimal. And remember that we don't need perfect measures. We just need to look at the relative differences across projects.
Okay, let's get down to it. What did XYZ decide to measure? The metrics for the Valencia project are shown in Table 18-6.
Performance of | Metric |
---|---|
Orders | Toll-free number orders for 825 and 827 products |
Number of total 82x purchases by target customers | |
Leads | Number of inquiries |
Overall project | Number of calls |
The project team wanted to know how many calls were received, how many inquiries were received (and later turned into qualified leads and finally sales), and how many customers did exactly what the offer asked them to do (buy via the toll-free number). Maybe most importantly, XYZ measured all the orders for 82x products placed by targeted customers during the six-month project period.
The value statement should be customized for each customer segment. Customized does not necessarily mean personalized, but it does mean that we use knowledge we have about the customers to make the offer appropriate and appealing to the customer's particular value proposition. Of course, personalization does make messages more appealing to customers. Whenever possible and appropriate, we should use customer information to actually address individuals.
The caveat for business-to-business marketers is that job churn can make it very difficult to know that the person you're contacting is who you think he is, or that he is the appropriate person for the message. B2B marketers are often interested in reaching the person holding a certain position (President, Manufacturing Manager, and Chief Information Officer), so they address the message to an individual and his title. Nothing gives a message lower value than inaccurate personal information.
XYZ's offer values for each of the Valencia target customer segments are shown in Table 18-7.
Segment | Customer Value Proposition | Offer Value |
---|---|---|
Laboratory |
| Reliable, high quality, protect your expensive equipment investment, safeguard health. Proof: |
Small mfg shop |
| Efficient, reliable, green, economic. Proof: |
Theaters, auditoriums |
| Reliable, air quality: high comfort of patrons, economical. Proof |
Exercise rooms |
| Reliable, economic, health. Proof: |
Miscellaneous | Depending on needs, modular choices that
| Modules that can work together as your needs grow; Reliable, economical. Proof: |
Here is my sole piece of “creative” advice: All of the message components must be appealing, must be clearly stated and easy to understand, and must include some tangible proof points. Proof points include hard data and examples from real installations or live benchmarks that give evidence that the product really is more dependable, costs less to support, etc. As an example, XYZ had extensive test results from their alpha and beta test installations showing that the number of failures was nearly 60% lower and the meantime between failures more than doubled for the 82x products. Making a value claim without proof points is too reminiscent of our proverbial emperor's new clothes. Did anyone say “Vaporware?”
Now we will determine which media we will use for both the communication and response.
The call to action is just what it sounds like. What specifically do you want the customer to do? This includes specifics about both how to get in contact your company and what the customer should do after they reach you. For Valencia, the call to action is shown in Table 18-8.
How to Do It | What to do |
---|---|
Call 1-800-CALLXYZ, and ask for extension 19. | 1. Place an order. |
2. Request more info or sales rep visit. |
The message must contain an easy-to-find and highly visible request for action if you really want anyone to do anything about it. Never make it hard for customers to give you the response you're hoping for!