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Management Insights
Improving the Profit Impact
By Chris Nelson, Managing Director, Advanced Marketing Solutions

Believe it or not, improving profits is commonly overlooked and this is primarily due to compression.

Make ROI a Priority and Keep Score

In today's business environment, there is more work (marketing projects and tasks) that needs to be done in less time, and maybe with fewer resources. When marketing programs are compressed they are usually placed on a fast track; launching one program quickly with an eye toward the next one. Very often this creates a domino effect and leaves no time for making ROI analysis a priority. Consider what could be accomplished with fewer dominoes, spaced farther apart for a better result.

If at all possible, slow things down and build in analysis as a requirement of every marketing effort. And challenge and require every internal or external resource with clearly demonstrating the ROI value.

Develop a formal scorecard for each specific effort within your marketing budget. If you selected targets of sales leads by rank, revenue by quarter/year by program or product, what was your percentage of target? Were you at 90-95% of target. It's all about keeping score. Keep an eye on database accuracy and the value of information. An accurate database provides a tool for generating revenue and profit. What is the current percentage score for accuracy? Remember that these scores translate into profits.

Selecting Resources and Tools

What are the right tools for the job? And how do we make sure that the chosen resources get it done? Answering these questions is one of the keys to reaching revenue and profit milestones.

In assigning resources, consider several factors:

First, provide teams with specific missions and deliverables. Example, generate 30 leads/sales per product per week, increase event attendance by 40%.

Second, stretching resources too thin is common in the rush to do run many campaigns and keep the sales pipeline full. But remember that when too many things are being done, too few things are being done well.

Third, hold resources accountable. To accomplish this, schedule regular deliverables (daily lead reports, call volumes, and sales updates, etc). Whether Marketing is supporting a direct or indirect sales channel, make your resources provide ongoing operations assessment. Create a sense of teamwork and accomplishment, reward performance and recognize milestones. Value must be visible.

When selecting the tools (such as communications vehicles), balance the requirements of a particular situation (time-sensitive efforts, etc) with the cost-effectiveness of the tool. For instance, when generating awareness or educating prospects about your company or product, a less expensive tool with broader reach (such as advertising, press releases, personalized email or direct mail) works well. And using personalized and professional B2B telemarketing to qualify sales opportunities is more effective than an all-in-one approach (inform-educate-qualify).

Consider using the selected tool at the best time for the best result. Example, sending personalized business email between Tuesday and Thursday and 10am and 2pm local time avoids having your messages stacked up with the junk mail and spam. Also, leverage communications and maximize the impact from your resources and tools. Avoid isolating each marketing efforts and creating islands of effort and expense. Instead build bridges across efforts. Example, notify of upcoming events when following up on a direct marketing campaign or product announcement.

Measure Progress to Fuel Profits

What are the metrics for success? And how do we build on that success to fuel profitable programs?

The best way to measure success is to run a test or pilot effort. Prove that a program will work by running a 200-call pilot, or 1,000 permission-based, personalized emails. With a large enough sample size this will provide an indication of effectiveness, enable real-time ROI evaluations, contain expenses, and allow for feedback and the necessary modifications.

Establishing rally points and milestones allows marketing programs to be paused. This provides an opportunity to analyze and apply feedback and, as an example, address unforeseen product training issues. There are always challenges that come up during program implementation. While things can be done on-the-fly, it is better to rest the team and share results and strategy. Choosing speed over a measured pace often forfeits quality sales opportunities.

Look to recycle leads after reviewing four possible outcomes. Understand why deals have been won or lost. And recognize leads that have died (lost funding, company closed) versus leads that have gone cold. These are the four outcomes. Many leads become hot, cool off and go cold and then become hot again. There are always dormant volcanoes, but sales reps and dealers are driven by their monthly and quarterly numbers. So these leads should be recycled and not abandoned. Let marketing nurture and harvest them, bringing them back to the sales channel when they re-develop.

Develop a Customer Retention Program

Corporate data structures are typically divided into three parts (marketing/prospects, sales opportunities, and customers).

AMS worked on a program recently where the customer database of a nationally recognized manufaturer was 40% accurate (required no change). Our mission was a Clean Sweep effort to update the database to 85% accurate. AMS efforts brought it to 95% accurate and generated $5.2 Million in quoted new business from a $75,000 program. These types of efforts can be done on a rolling basis, quarterly, bi-annually, or annually and typically provide significant ROI. If you choose to outsource, expect the annual outreach cost to be $5 to $8 per customer contact (depending on the efforts made to reach them) and weigh that investment against the revenue from an average purchase.

Simply making the effort defends and extends revenue. One thing we've found during Clean Sweep programs is that customers that have gone to competitors from lack of attention. Remember, studies have shown that it is 7 times less expensive to keep customers than to find new ones. Build a communications calendar. Personalized monthly email newsletters can include products that they've purchased, announcements on training, events or upgrades. At an absolute minimum marketing or sales should call them once per year.

Provide continuing benefits to customers. They can provide you with a solid revenue and profit foundation, assist the sales effort (testimonials, word of mouth, etc) and help to develop and test new products that provide a competitive advantage. So why is marketing to customers becoming a lost art? Rediscover it to improve your profit impact from marketing. Establish customer round tables, breakfast seminars, sneak peeks at product and event announcements. Don't take customer loyalty and future business for granted; it must be earned through repeated action. Customer marketing is an integral part of improving the profit impact.

Prepare a Profit Horizon Strategy

What are some of the strategic elements for improving the profit impact? And how do we make these things happen?

Reviewing the business model and its objectives in a strategic light is the first and most critical step. Going off-site provides a quite environment free from distractions. It allows us to evaluate quarterly reviews and "signpost" marketing reports and discuss results and direction. Walk through an outline process using categories such as the ones in this article. Determine program effectiveness and examine and discuss each category and element to develop a comprehensive fiscal year plan with the tactical details.

Should you outsource? Evaluate your resources, time and expertise to determine if an internal option, outsourcing solution or combination is best. The right outsourcing investment can provide flexibility, expertise and lower costs through scalability and economies of scale. If you decide to outsource, seek vendors that provide guidance as well as services.

Chris Nelson is the Managing Director of Advanced Marketing Solutions, a marketing/sales support and lead management firm that implements programs to maximize client revenue and profit impact. For a free consultation to see how your marketing programs could yield a greater ROI, visit or call Chris at 508-486-9700.

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