Miscalculating the ROI of Social Media

May 7, 2010

In Ed Schipul’s Personal Brand Era presentation to the PRSA Georgia crowd yesterday, he cited stats about the of success of small business owner Gary V’s venture into social media marketing as highlighted in popular Social Media ROI: Socialnomics video. The issue I discussed with Schipul afterwards is how the example perpetuates the idea that social media is free. Here’s the mathematical flaw:

$15,000 in Direct Mail = 200 new customers

$7500 for a billboard = 300 new customers

$0 on Twitter = 1800 new customers

Wow! Who wouldn’t jump to twitter with that math? But we have to recalculate the costs here to find the dose of reality.

While $15,000 probably includes design, production, list rental and postage not to mention possible test marketing efforts, it is still a lot, especially if the value of a new client is only $25/each. 

$7500 for a billboard could be a one month rental in a prime area or design, skins and a multi-month rental in a lower rent market (I currently have a client spending just $500/mo for a board in a suburban market). New customer value at that same $25 and you’re breaking even.

1800 new customers with no cost? 18000 of those $25 clients is a fabulous return. But wait a minute.

How did you get the content on twitter? Who wrote it? How many tweets were involved? What did you tweet? Where did your tweets send them? To a website where you had to develop content? Who recorded or wrote that content? What was the cost of the person monitoring your tweets or tweetdeck? What was the cost of the developer creating landing pages for your tweets? And for the copywriter writing your content?

The idea that social media is free is a bit of a smoke-and-mirrors proposal. Social Media has great potential to promote your company, especially with the right offer and to the right audience. But don’t kid yourself into thinking it is free. Budget and plan for it accordingly and you will reap far greater ROI than if you treat it as a “free” medium. And remember, sometimes direct mail and outdoor still have a place in your mix.


Considerations for Attorneys Using Social Media

March 23, 2010

Paul Arne’s ViewPoint in last week’s Atlanta Business Chronicle goes straight to the point of a sore issue I’ve been hearing from our attorney clients of late: exactly what should and shouldn’t I do with social media. In his article, he cites an example where the glowing praises of a client submitted as LinkedIn Recommendation put his partner at risk of violating the ethics rules of the bar association. Before you run to dig up the comment to see if it is something really steamy, I’ll save you the steps. The recommendation read,

“He is as smart as they come in the world… and a tireless worker.”

You and I both understand that it’s not possible for the recommender to know whether this guy is the smartest in the world and would let this pass but for those attorneys who are very precise about everything they put in print, this was a problem.

So say you’re not an attorney, how does this point help you with your planning? Well, consider whether you have any professional memberships or employment obligations that require you to follow certain guidelines about the advice you provide or the accolades you receive. It’s a slippery slope here and while I think the example of Paul Arne’s partner was a bit extreme, it’s a valid concern and one that you need to consider where you’re an individual contributor or a business owner looking to set standards for your team.

BTW, if you’re not an ABC subscriber and want but can’t download the full text of the article, ping me and I’ll share my copy.

Is Microsoft really trying to protect hotmail users from URL Squatters?

March 18, 2010

NPR revealed (to me) this morning that Microsoft has filed a lawsuit against an exercise equipment firm in CA for buying domains similar to hotmail.com in hopes of catching fat-fingered users. So I’m laughing riding alone in my Volvo at the absurdity of Microsoft pursuing this action against a small firm exploring a very popular tactic for capturing traffic. At least they should be happy it is not (another) porn site.

On a more serious note, registering domains similar to your own is a very smart approach, especially if you have a hard to spell or hard to remember domain. For instance, we have a client named Stien. Every time I try to send him email, I spell his name Stein in the classic way of Ben Stein. It would be a logical choice for this man to register both spellings of his name as a URL just in case folks make an error.

For that matter, Microsoft probably should have had the foresight to register these mispelled names themselves. How often do you fat-finger a site and find yourself redirected to the place you really wanted to go to begin with? Businesses are smart enough to already be taking this approach and if they aren’t, they are learning fast.

The other savvy approach marketers are using is to not only register variations of their own domains but variations of their competition, too. Why not? If it allows you to get the traffic you’re looking for, it is a completely legitimate strategy and one you should explore. It’s no coincidence that GoDaddy.com suggests alternate variations on  domains when you register them. Take advantage of their offers then use some creativity and come up with a few more.

As for the exercise equipment company’s domains, you can bet that Microsoft will probably be buying those shortly anyway.

When Direct Mail Can Still be More Effective than Email

January 22, 2010

The WSJ made an excellent point in a piece posted last week about the continued importance of direct mail in the marketing mix of the average small business owner. The article goes on to cite examples of real small businesses who after briefly succumbing to the lure of saving money by cutting their partnership with the USPS, quickly re-instated their previously successful direct mail campaign.

Email sounds great on paper but for most small business, email lists are still an obstacle. They don’t have them and can’t afford to rent them or they can’t find one that matches their target demographics. But they’ve bought into the idea that dmail and postage is too expensive when email is cheap (or free) and so they reign in their dmail budget and do little or nothing in the email space.

Direct mail still deserves a place in your marketing plan though perhaps with a smaller part of your budget.

Gone are the days when dropping generic letters or cards to thousands of rented names each month makes sense. In their place small biz marketers are finding that customized communications to a smaller and more targeted list are not only more effective but can help them stand out. Don’t get discouraged because you don’t read “junk mail.” You are not your client and if your communication looks like junk, then you’re doing it wrong.

A personalized package with customized info sent priority mail to your target will stand out. A hand written note on company notecards will get their attention. A humorous postcard with an exaggerated graphic may be just the reminder they need to keep your name and your business top of mind. Complement the sales calls, emails and other tools in your marketing mix with a good dmail piece and reap the rewards ignored by your thrifty competitors.

When Great Subject Lines Fail to Deliver

January 21, 2010

Today I received an email with the subject, “I would like to take you to lunch.” Quick and to the point, it got my attention and made me open it. The problem was once I got inside there was a form letter from a man I do not know trying to sell me something that I could not immediately identify. So I deleted it.

Writing great subject lines, like headlines, is a skill. Remember, these are the attention getters that make people want to read more. Like book jackets and magazine covers, these are the advertisements for what is inside. They shouldn’t be an after thought but instead a strategic part of your marketing effort.

If you’re going to compose a great headline, make sure you can deliver on the inside else it is just more spam. Connect your subject, either directly or with a little humor, to the message inside so the conversation continues. Then be direct and get to the point quickly so you can connect with the recipient and deliver on your offer.

On closer inspection, I believe the sender of my message was marketing something to do with events. A face to face made sense for him to market his services but without a clearer articulation of those in the lead paragraph, with a graphic or in a bulleted list or table, he lost me. Think about that next time you’re trying to differentiate your email from spam.

Mailing List Hygiene and the NCOA

January 18, 2010

When you submit a mailing to a direct mail house, they run your list up against something called the NCOA (national change of address) database. This list of physical addresses is updated quarterly using the information that mailing recipients provide when they move to a new home or office.

In an era of ever improving printing equipment, we’re increasingly seeing businesses manage their mailings in house. Especially for smaller quantities, the benefits of outsourcing your mailing simply for a pre-sort discounted just aren’t realized and if you have the time, patience, staff and equipment to run it in house: go for it. The problem here lies with the quality of the list.

When a business gets the idea to send a mailing, they dig old business cards out from the cracks in their desk drawer, export records from outlook that they collected three jobs ago then pile everything together with their coworkers in Excel. An administrative person (or other poor soul) takes responsibility for “cleaning” the list which essentially means making sure there is data in all of the right fields and presto, they have a mailing list.

The problem is that the people you worked with or sold to three jobs ago have likely made the same migration and now your list stinks just as bad as those business cards you found under the snack food and gooey candy in your desk drawer. And unfortunately even if you could submit your list for NCOA update, individuals don’t file a change of address when they switch jobs so you’re still stuck with junk in your file.

While I’m not advocating you dump those records entirely, it is important to take the time to look at the end product then actively monitor you returns. Make sure you delete records for mail pieces that are returned (pay for First Class postage on the first mailing to ensure you receive those returns). As you slowly add names to your list, be sure each comes with a date attached then don’t be afraid to remove records once you see no activity for a predetermined period of time (this period depends entirely on your business offering). And if you’re unsuccessfully pursuing a certain business that you know is still in operations, it may be time to target a different contact. So pick up the phone and get that name.

Don’t think this advice is just for direct mailers. If you’ve gone to all electronic mailings, the same process and lessons hold true.

Why all this effort? Because owning a list of 500 or even 5000 names that you have never taken the time to clean is just a license to waste money. Scrub that list and you’ll be reaping the reward of a much smaller, much more productive mining effort.

If you’re looking for an NCOA service provider, try Melissa Data.

Perhaps it is time for 5 Guys to invest in new content?

January 15, 2010

As I left Starbuck’s this morning (with a tall cup of scalding Awake tea in hand), I noticed the graphics in the window of 5 Guys Burgers next door broadcasting recognition they had received from magazines and newspapers in 1998 and 1999. I did a double take it first. I mean, it is 2010. These awards were from two decades ago!

Awards certainly lend credibility to a business but when your latest recognition is from 11 years ago it leaves the customer wondering: are they still any good? If they were good enough for press in 1998 and 1999, what has happened since? Dare I eat there now?

The same line of thinking goes for your print and electronic marketing materials. If you’re still passing out a brochure that celebrates the tenth anniversary of your business in 2007, it is time for a refresh. And even without dates, if you know that you haven’t re-written the web copy on your home page in more than 24 months then don’t think your prospects and customers haven’t noticed.

Content is king. It is the vitality of your communications (not YouTube) and what allows you to shout from a mountain top your most important thoughts and offers. You don’t need an award from the Daily News in order to have something to say. Your experience is your credibility. Your customers and prospects look to you for information on your area of expertise and you owe it to give them timely and updated content.

So this January in the time of New Year’s resolutions, make a pact with yourself to update at least one of the following:

1. Press Release Boilerplate — When is the last time you read this thing? Is it even current?

2. Web site home page copy — Make it about what you customer needs not what you do.

3. Corporate Brochure — If you need a printed piece, great. But make it sing!

4. Your Voice Mail Greeting — really, this is a super easy place to distribute content that everyone except you has to listen to.

5. Your autosig — Besides your contact info, what other info could you be sharing here? Add a link today to a special offer from your firm or a quick survey.