- Dear Anonymous,
- Can we create a financial pro forma? An earlier column of mine gives some background on pro forma, in which a fictional CMO aligned his team to improve accountability and get more value from his Web analytics data. As part of that effort, he established a 12-month series of mandates. One of them is to “create a financial pro forma for the value of site behaviors and goals.”
- Can we allocate 5 percent of the next digital campaign budget to post launch analysis and optimization? Here are some background numbers to start this part of the conversation. Let’s suppose your site has lead generation as the KPI (define). In one year, the company converts 2.38 percent of all site visits to leads, for a total of 2,800 leads per month. With its average lead closing rate and the average value of the close, your site’s manager can determine that the lead’s value is, for example, $213. The current monthly value of the leads will generate $596,400 (2,800 leads multiplied by the $213 lead value).
A 5 percent increase will yield a new conversion rate of 2.50 percent. That will add 140 additional monthly leads and result in an additional $29,820 per month, or $357,840 annually. The numbers only go up from there. Although this model assumes the lead quality remains the same, it’s easy to see how improving just one KPI by a small amount can lead to large improvements in the bottom line. If you model this for a number of your KPIs, you can make your case fairly quickly.
- Can we create a forum for people to be rewarded for taking risks by leveraging optimization programs rather than being penalized for risk-taking? What better way to get people to pay attention to statistics than to give them a real incentive to do so? Rewards don’t need to be large. A simple gift card to a coffee shop can do a world of good.
You want ideas? Bake cookies for the CMO’s administrative assistant. Ask, beg, do whatever it takes to get in front of her. Be persistent. Convey why you want this meeting; this is constructive feedback versus whining. You’ll get it.
Here are some topics for discussion. First and foremost, your CMO will want to know about the ROI (define). Provide her with data and analysis on the correlation between on- and offline advertising spending. Typically, a well-run advertising campaign generates highly predictable and effective results in the Web channel. If your CMO has those figures in hand, she will be better able to understand the importance of your conversation.
Do you have a monetization model in place? Walk her through what it takes to get there. Bring up buzz words like advertising spend mix and evaluation of investment prioritization and business group/employee performance. Bottom line: speak her language.
Here are some other points for discussion:
Anonymous, in your last letter you asked, “If the new design outperforms the old, we’ll go through the process to republish. If it fails, I figure this is a great way to demonstrate the need for a testing environment. What do you think?”
Excellent point. You definitely need a testing software program (Omniture has a fantastic product called Test&Target). Building this culture of analysis and testing is critical. You mentioned some smaller programs you’ve begun to track. Keep doing this and discuss your efforts with your CMO. It only makes a stronger case for your argument. Once you start collecting more of these small wins under your belt, there’s a sudden insatiable appetite for testing across the whole organization.
Let me know how the meeting goes. If your CMO is worth her salt, she’ll realize how valuable this info really is.
Also, I’ve got a great recipe for chocolate-chip oatmeal cookies, if you’re in a pinch.
Remember all of this when you’re CMO someday.
Are you doing something similar? Have questions or need clarification? Shoot me an e-mail, and I may include your story in an upcoming column.
Marketers need to know what’s in their data and trim out the filler to provide continuous, data-driven ROI for their brands.
As consumers, we live in a real-time world. We have the technology to access the information we need, when and where we want it, and the "when" is usually "now."
A new starter in Team SaleCycle recently asked me the following question… “Wouldn't they just come back anyway?”
American Apparel's chief digital officer discussed the future of retail, the importance of delivering value to the consumer, and strategies for an IoT and omnichannel world.