Play better offense and defense

Editor’s note: Scott Bakken is president of MainStreet Group, Inc., a St. Paul ad agency.

A prolonged economic downturn can stress out the best Wall Street minds. But for marketers, slowdowns present an especially nerve-wracking Catch-22. When the corporate belt is tightened, advertising and marketing budgets often are among the first to be cut - even as expectations for their performance increase.

That’s why it is important to know exactly how effective (and consequently how valuable) your advertising and marketing is at all times. All of these entities use response tracking to defend the value of their marketing: cable TV companies - who want to find out which marketing tactic generates the most calls; mortgage lenders - who need to determine which newspapers and radio stations get the best ROI; energy utilities - which face increasing competition; resorts - who want to get more scientific about which groups to target; and professional sports teams - who can save thousands of dollars with the slightest incremental gain in response rates.

Why do they use response tracking? Because it offers marketers the kind of defense numbers-crunchers can understand: numbers. It works like this:

  • You assign a distinct phone number to each of your marketing campaign’s tactics - direct mail, TV, radio, newspaper ads, etc.
  • When a customer calls to respond to your advertisement, that call is tracked back to the particular tactic that persuaded the customer to act (thereby keeping them separate from your “business as usual” calls).
  • The resulting response rates reveal how effectively each of your tactics is at generating new leads.

Quantifying marketing’s role in your company’s profit growth gives you real leverage. You can use the data to measure cost-per-response, forecast quarterly growth and gauge future campaign requirements - all crucial components to securing and defending your marketing budget. And by relying on actual, reliable call data, you avoid the errors inherent in old-fashioned techniques like campaign codes.

If nothing else, response tracking can help establish the legitimacy of certain marketing tactics. Take ADVO, Inc., the Windsor, Conn.-based direct mail giant. Even though it’s the U.S. Post Office’s largest customer, ADVO is often asked to substantiate its cost-effectiveness. “Until recently, few of our clients did any tracking of their own, yet they all asked for historical response data from us,” says Bernie Kramberg, ADVO’s director of marketing intelligence. “Response tracking has proven to them that their return on investment far outweighed any perceived drawbacks to ‘marriage mail.’”

But response tracking offers more than just a good defense. It can help you play offense more effectively too. The following are just a few of the ways you can use response tracking to reduce costs, focus your marketing message and improve your return on investment.

Measure the effectiveness of each marketing tactic

Tracking can be extremely important when your budget is tight and you need to get the most bang for your marketing buck.

Jason LaFrenz, vice president of marketing for the Minnesota Timberwolves and Lynx, began using response tracking to avoid spending unnecessary dollars on unproven marketing ideas. “We’ve recouped our investment into response tracking five-fold by making better decisions with our advertising dollars,” says LaFrenz.

Because tracking allows you to monitor the progress of your campaign, you’ll know immediately how well your money’s being spent. For instance, if newspaper and radio consistently perform poorly in your campaigns, you’ll know to cut there and put your remaining dollars where they will count. In fact, ad agencies regularly use such data to steer their media buys within specific publications.

“A particular newspaper was expensive to advertise in,” says a Time Warner Cable marketing executive, “but response tracking proved that it far exceeded the number of responses we got from other publications. This information will help me gauge what level of contract to negotiate those other publications.”

A Time Warner Cable colleague discovered that his print ads weren’t providing him the return he thought they were and ceased a planned $60,000 contract, instead turning to radio buys, which were surprisingly effective.

Find out who your customers really are

A good response tracking system allows you to cross-reference incoming calls with a comprehensive, external demographics database. This provides a clear picture of who’s calling -their age, location, household income, education level, etc. Such information is essential in helping you focus your marketing message and speak more relevantly to your targeted consumers. “We had a year-round contract with one publication, but now we use it only to target college students coming back to town,” says a Time Warner Cable media buyer.

A media buyer at cable firm Charter Communications says that a system he employed used geographic data to discover that many calls came from a particular area that Charter had written off because of a competitor’s concentrated effort in that area. He came to the conclusion that “market factors such as demographics and geographics played a bigger role in response rate than our offer did.”

Test almost anything

Campaign tracking is an invaluable learning tool. By comparing baseline information from campaign to campaign, you can test any number of variables in order to determine more precisely what drives customers to act. Test aspects as fundamental as offer, price, media placement and timing. Or, compare campaign nuances such as hard sell vs. soft sell, short vs. long copy or even red vs. blue typeface. It’s entirely up to you.

One cable TV marketer was forced to accept a cold reality: “[Testing] proved that our creative was rotten.”

Monitor your call center’s efficiency

Perhaps one of the most important ways response tracking can streamline your budget is by pointing out waste. A good response tracking system not only tracks calls that get through to your call center, but also identifies calls that were attempted but not completed. It also separates the number of “unique” callers from repeated callers. Most marketers would be shocked to learn that their marketing often generates far greater response than their call center can handle. Call data can provide vital statistics such as the percentage of busy signals customers received and the busiest calling times during the day. These numbers will allow you to staff your call center adequately and avoid needless sales losses. You can even capture the phone numbers from uncompleted calls and forward them to your company’s sales staff for call-backs.

One company representative (who wished to remain anonymous) confided that, “if it weren’t for response tracking, we would never know how poorly our call center was performing.” As a result, the representative’s company has since hired a third party to handle its in-bound sales calls.

A cable executive put it bluntly: “I’m using this data to slap someone up.”

Refine your mail list

Tracking allows you to identify and eliminate underperforming addresses from your mail list. This results in considerable savings on printing and postage costs. In fact, trimming just 5 percent from a mail list of 250,000 files can save you nearly $3,000 in postage alone. Also, by profiling your existing customer list to identify groups with demographic and geographic similarities, you can better target those customers that your response tracking indicates have a higher propensity to buy - and stop wasting money pitching to those who don’t.

Increase efficiency

Response tracking can’t solve every problem you face as a marketer. It can’t force your ad agency to return your phone calls. It can’t compel your printer to meet your deadline. But response tracking can arm you with the hard data you need to increase campaign efficiency and justify your marketing’s effectiveness - even to those who are used to viewing your department as an expense rather than an investment.