Kevin Hillstrom: MineThatData

Exploring How Customers Interact With Advertising, Products, Brands, and Channels, using Multichannel Forensics.

April 20, 2008

A Sample Multichannel Results Meeting

The day starts with an "integration meeting", to discuss the performance of the Early April Sale event.
  • The E-Mail Marketing team is delighted to announce that 19% of customers opened the e-mail campaign, compared with 18% last year. 32% of those who opened the e-mail campaign clicked through to the website, and 2.98% of those customers purchased something online (spending $165 each), yielding a $-per-email of $0.30, a full two cents better than last year. The CMO (Chief Marketing Officer) asks if the e-mail campaign drove store traffic, the e-mail marketing team stares at the CMO, unable to answer. The CMO asks if the campaign was profitable or not ... again, no answer.
  • The Catalog Marketing team appears embarrassed to share results. Response rates dropped from 2.2% to 1.9%. The catalog drove $3.10 to the phone, online, and store channels, and drove a total of $743,000 profit, compared to $840,000 last year. The CMO demands that the catalog marketing team improve their performance, and wants an action plan to do so by May 1.
  • The Online Marketing team had budgets frozen at $100,000, in spite of the fact that they caused 22,400 orders at a CPA of less than $5. The CMO asks if this activity was profitable, the online marketing directors thinks so, but can enthusiastically say that the CPA was $13 last year.
  • The Retail Field Marketing team thought the newspaper inserts were well executed, and that the radio ads were funny. The CMO praises this team for moving advertising in a "brand-right" direction.
  • The Web Analytics team suggests that traffic increased 9.2% vs. last year, conversion rate increased from 2.44% last year to 2.56% this year, and that average order value improved from $175 to $181. The CMO asks why the website performed better, the "WA" team suggest a well-designed landing page. The CMO asks if the website drove more retail sales or less retail sales compared with last year, the "WA" team do not offer an answer.
  • The Social Media team noted that there were 147 references to the sale event this year, 104 positive, 43 negative, for a net score of 61. Last year, there were 96 references to the event, 63 positive, 33 negative, for a net score of 30. The most common complaint was a lack of pricing parity between the website and the catalog ... the website took steeper markdowns once the first three days of the sale indicated that results were well below forecast.
  • The Business Intelligence team analyzed customer behavior during the sale event. They noticed that comparable customers spent the same amount this year as last year, across channels, indicating customers abandoned catalog marketing for store purchases. The CMO notes that retail comp store sales decreased by nine percent, so this finding doesn't make any sense. The "BI" team is asked to go back to the drawing board, and see if there are errors in the database that cause this contrary business finding. The Business Intelligence team says that sales decreased because of a fifty percent decrease in new customers during the sale event. Since the catalog and online marketing teams increased their customer acquisition budget, and the retail field marketing team did more radio advertising than last year, folks generally don't believe the results. The Business Intelligence team also comments that the e-mail campaign drove an additional $0.12 into stores, based on mail/holdout results, but nobody believes this finding, because comp store sales decreased. The BI team also shares that the share of multichannel buyers purchasing during this event actually increased, though nobody believes this result because comp store sales decreased.
  • The CMO asks if this attempt at integrated marketing "worked". Was this a successful multichannel marketing campaign? The team believes that the catalog marketing effort really dragged down the performance, or it would have been a successful campaign.
  • The CMO asks for a total sales and total profit comparison, this year vs. last year. Nobody takes leadership on this topic, as all in the room feel they don't have the "systems in place" to accurately calculate this for the CMO.
  • The CMO agrees to outline the performance of all activities "on the back of an envelope", estimating the profit of all activities. The Business Intelligence team is worried about "double counting" transactions, though nobody really understands what this concern is all about.
Ok, folks, this is a typical multichannel results meeting. In this case, everybody reports to the CMO, so you don't have silos competing against each other.

What is wrong with this meeting?

What metrics should be used to analyze the results, this year vs. last year?

Who should own measurement of this event?

Who should be responsible for determining the advertising budget for next year's event? What additional data do you need to properly allocate advertising dollars across e-mail, catalog, online, newspaper, and radio?

What is your Rx, your prescription, for analyzing the next sale period in late June?

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