Promotion effectiveness

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Understanding the effectiveness of a particular marketing campaign in the b-to-b space isn't easy. The sales cycle can be lengthy, and tying revenue and incremental sales to any particular program is difficult.

At best, measuring overall promotion effectiveness may come down to the sophistication of internal screening processes that produce quality leads.

"Any of the current measurements of marketing ROI are actually a measure of organizational effectiveness, not promotional efficiency," said Erik Madsen, director of marketing and strategic planning at Adtrack. Pricing, follow-up, competition, sales training, new channel partners and many other factors determine the effectiveness of any campaign.

"A whole lot of stuff goes on to make a sale that doesn't have anything to do with a promotion," Madsen said.

Sometimes marketing success doesn't even imply a closed deal, experts say. A campaign could have generated interest, but the prospect then bought from somebody else. The success comes from having found the right lead to begin with, one that expressed interest and the capability to buy.

Coding prospects

Adtrack clients attach what it calls "sales-action-taken codes" to every prospect. For instance, "sold" represents an obvious success, but "bought from other" can be considered a marketing coup. "Future lead" is not as powerful but still positive, as are "proposal made" or "sale pending."

Negative codes might include "no interest," "no budget" and certainly "not qualified."

"More than half of all marketing groups in businesses still count the number of leads as the prime metric, instead of how many prospects marketing screened and decided were good," said Jim Lenskold, president of marketing consultancy Lenskold Group.

Of course some b-to-b campaigns can be tied to results.

"Say you run a promotion in a print ad and publish a toll-free number that's specific to that ad," Madsen said. "Eventually expressions of interest get collected, qualified, ranked and distributed to sales. You can look at the campaign and see how much significant positive interest it generated compared with other events."

Getting quality leads to sales is important for more than just increasing closed deals. Pushing poorly screened leads hoping that sales does the qualifying by itself strains the sales function beyond its capacity. Contact dates get further out, buying cycles lengthen and good prospects get lost.

"Basic ROI math is, if you reduce the number of leads through careful qualifying but get the same amount of sales, it looks the same," Lenskold said. "However, your ROI goes up because of the reduced cost of closing that set of leads."

A company that uses sales-action-taken codes is Daniel Measurement and Control, a $300 million subsidiary of Emerson Electric Co., manufacturing metering equipment for the oil and gas industry. Its lineup of codes include: "sold," "quote made," "future prospect," "bought other," "information only," "no contact" and "competitor." The company's campaigns are limited to trade journals ads, trade shows and its own Web site.

"Our reps realize and appreciate the fact that they are receiving qualified leads," said Russell Barnhill, U.S. sales manager at Daniel Measurement. But he added that even an apparently negative assigned code—given, for example, to a prospect only seeking information—could be valuable.

"If the lead turned out to be a student doing a research paper, we wouldn't want a sales rep to drive 200 miles to see him, but he might turn out to be a design engineer one day," Barnhill said.

Daniel Measurement's lineup of sales- action-taken codes "is definitely a marketing initiative but it's also an opportunity for salespeople," Barnhill said. He estimated that incremental sales have risen 1% to 2% since 2003 after implementing Adtrack's lead management methodology.

Alignment Needed

Promotion effectiveness as determined by lead quality underscores the linkage, and the need for close alignment, between marketing and sales.

"We have a tremendous focus on making sure leads are qualified and are ready to talk to sales," said Dennis Head, senior marketing manager at telecommunications solutions company Avaya. Head protects what he characterizes as his department's "brand"—its reputation with the sales side.

"I have fights internally at times with people who say they have such and such a lead and to just send it to sales," Head said. "But if you start putting junk in there, sales won't give you the time of day."

The way to avoid junk and a means of gauging the effectiveness of marketing is through a thorough screening and qualifying process, he said.

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