How one company achieves measurable returns on its marketing investment.
Three years ago, Cisco-Eagle assembled an in-house marketing team with collective skills in Web development, graphic design, database management, market research and other areas. All have specific experience in the material handling industry. The team was organized in part around many of the business principles contained within the criteria of the Baldrige National Quality Award criteria.
The marketing team’s mission is straightforward…to increase Cisco-Eagle’s visibility, build an appropriate image, and create new business opportunities.
The Starting Point — A Fiscal Year Planning Process
Cisco-Eagle’s marketing objectives are defined and prioritized during an annual fiscal year planning process. Ours begins in the winter with a review of our corporate business objectives and goals for the upcoming year. A preliminary marketing plan and budget aligned with company objectives are created. Activities, cost estimates and timing of expenditures are included. Goals and accompanying measures for each activity are also identified.
The marketing team meets with each sales team to review the marketing plan, review the sales team’s FY plans and sales goals, and identify any additional marketing activities required to support our collective efforts. Sales and marketing work in a coordinated way. The direction of sales is defined in great part by the information, data and resulting initiatives that marketing creates.
The plan is then submitted to the Leadership Team for review and inclusion into the corporate business plan. The final marketing plan is posted on the corporate Intranet. Twice monthly, during corporate-wide business “huddles,” the expenditures and activities are revisited relative to plan.
Customer and Market Information
It is difficult to successfully pursue market opportunities or effectively address customer needs without accurate information. Capturing information is an ongoing process owned by specific individuals using a wide variety of data capture tools and methods. A good starting point is to identify ways to begin capturing current customer data, potential customer data, and data that assess relative market share. With the exception of the fork truck business (using ITA numbers), market share tends to be one of the more challenging areas to address. Some of the approaches used by Cisco-Eagle for data capture include the following:
Market Potential Assessment — A relative market potential is created for each geographic area in which we work. Various criteria are weighted and included in the mix, such as industrial real estate inventory levels, absorption and vacancy rates, the MHITAP market analysis, Sales & Marketing Management Magazine’s annual survey, the USBEA manufacturing and distribution output forecasts, and SIC factors (20s/30s/50s). Many commerce websites provide the ability to drill down further into specific market segments in which a company might have significant exposure.
Core Research — Data are captured on an ongoing basis from the print media, selective database acquisitions, and specific industry, association and financial services websites. Sales teams can request company-specific or SIC-specific research by completing a request form on our corporate Intranet.
Quarterly Customer Satisfaction Survey — This is directed to those with whom Cisco-Eagle has done business in the past quarter. Response rates are 25-30%. Customers have the option to respond in either Web or print form, and results are posted on the company’s Intranet for all associates to view. The last question on each survey asks, “How did you find Cisco-Eagle, Inc?” This provides an indication of the marketing team’s performance of visibility and image initiatives.
Targeted Surveys — We periodically target a representative number of both current customers and pre-screened potential customers for receipt of a Web-technology survey. The intent is to determine what Web-based tools they use, or would like to use in the future (e-mail, Web conferencing, extranets, B2B apps, etc.). This is a small, but important, audience.
Another example is a 30-day campaign in which all Cisco-Eagle associates ask incoming callers “How did you find us?” The associates simply check the box of the appropriate answer on a 3 x 5 inch card. We have discovered that two activities account for almost 60% of those who initially find their way to Cisco-Eagle.
Post Implementation Audits — These audits are conducted after the commissioning of systems that meet pre-defined criteria. The audit focuses on what went well, what did not, what might be done better next time, and if we met the business objectives for which the project was created.
Database Refreshment — It is difficult to overestimate the importance of this activity. Names and addresses change and database records invariably go stale. Every mailer, brochure, e-mail, phone call or event invitation that targets an incorrect recipient is a loss in time and money. Records contained within a marketing database should be cycled through a refreshment process. Ours occurs primarily through a scheduled telemarketing effort which consumes approximately one week per quarter. Size of the database dictates the cycle. All our database records make it through this process within approximately 24 months. These calls also serve as an excellent opportunity stream.
Benchmarking Marketing “Best Practices” — This should be a gimme, an excellent way to benefit from the lessons learned by others. Try to target three or so leading companies a year, with at least one of these coming from outside the material handling industry.
Outreach activities generally fall within the categories of print, Web, events and special projects. Activities can address an audience at large or focus on a segment of the market, with a message tailored to that segment. Cisco-Eagle leans toward the latter (i.e., auto dealer parts departments, paper finishing plants, beef and pork distribution, tire plants and others). As the specificity of the audience and message is increased, the campaign becomes measurably more effective.
Targeted direct mail campaigns include mailings on 60 to 90 day intervals that continue for one year. The intent is to create visibility and a lasting image within that segment. The primary goal is not always immediate business generation; however, all mailings should provide a response vehicle (postage paid return card or otherwise). All responses are tracked and logged into a marketing database.
An ongoing effort is made to grow a library of Cisco-Eagle case histories, in both print and electronic form. The latter are useful for the website, targeted e-mail content and for submittals for publication. One of the marketing team’s objectives is to grow the library to sufficient size and depth of content to effectively address any of the business segments in which we currently work, or desire to expand. Additional print collateral in the form of catalogs, brochures and various flyers are also created in-house.
Web-marketing can become a key element of an integrated material handling marketing approach. Material handling industry applications for the Internet are almost endless. Electronic activities include a corporate website, online tools, online catalogs, corporate Intranet, customer extranets and e-mail campaigns.
Many outreach activities are created solely to drive customers to a website. Customers generally find Cisco-Eagle’s site using search engines, or through our proactive efforts to drive them there. We have significant control over both and are areas in which we invest significant time and dollars. Traffic comes from our ability to create and position the site so the search engines provide a high traffic count of relevant site visitors.
Currently, Cisco-Eagle receives between 7,000 and 8,000 unique visitors each month, resulting in multiple daily requests for information, proposals and follow-up calls. Although a number of these are unusable (student requests, foreign requests, irrelevant requests), many become immediate online purchases, and in some cases, lead to sizable systems projects. To date, the largest project to originate from our website has been $1.2 million.
Activities are measurable, either directly or indirectly. Our preference is to have a direct measure that relates “revenue generated” to specific marketing activities. In many cases, this is possible; for those that are not, we have created a “critical number” measure.
A critical number is an indirect measure that if found to move in the right direction will most likely lead to success with an ultimate measure (i.e., revenue). Assume a decision is made to create another website to market conveyor. Initial measures might be the number of unique visitors to the website or the number of relevant online requests for information about conveyor. Web tools are easily available to measure these areas.
Another measure might be identifying those new proposals or new customers who came to us via our website. This is simply a periodic cross-reference with our proposal log or new customer list. Another simple barometer is to ask, “How did you find us?” when responding to a caller.
These are four or five potential critical numbers (only one of which requires minimal sales associate assistance), because if they move in a positive direction, ultimately, so will revenue. These types of measures are the primary determinants of how marketing resources are allocated.
The success of marketing activities that are measured directly by the revenue they generate are handled differently as they need to exceed the next best use for those dollars. If a company achieves a 5% ROI, then the marketing investment is divided by .05 to determine the sales revenue necessary to restore those dollars back to the bottom line. In other words, if I can achieve $20,000 of revenue on a $1,000 marketing investment ($1,000 ? 5%), then the activity is a go.
A less conservative approach might call for a multiple of the investment in Gross Profit dollars. If I wanted a 3 to 1 return on non-commissionable Gross Profit, then that $1,000 marketing investment would need to generate $3,000 in gross profit that would not be further diluted by sales commissions.
An additional benefit to fact-based, measurable marketing campaigns is the willingness of vendors to financially participate in these efforts. There is less reluctance to invest in an activity that has a track record or game plan for achieving measurable goals. A significant portion of the funding for Cisco-Eagle’s marketing activities is provided by our vendor-partners.
The essence of marketing is capturing information about customers and markets, then using that data as the foundation for creating executable, measurable activities that are in alignment with a company’s business objectives. A roadmap makes this possible. That roadmap is built during an annual planning process in which our marketing team is an active participant.
|Meet the Author
Chris Doyle is marketing manager at Cisco-Eagle, Inc. in Dallas, Texas.