Lesson 9: Automation

In this day and age, every business wants to be like Amazon.com. So how do you get there? Through marketing automation. This is both software and techniques of increasing sales through preplanned and personalized communications to prospects. I’ll walk you through how this works, and provide the definitions you’ll need for your OMCA exam along the way. The first interaction with a visitor to your marketing is called a contact. This means that they have responded to one of your marketing campaigns. When the contact has give you their name and contact information, this is called a lead capture. It typically happens through downloading a white paper, research report, or registering for a webinar. Through an online form, the lead provides data about themselves and their company. This information creates a record in the CRM, customer relationship management software. Information about the contact’s business is called firmographics. Similar to deomgraphics, it is the characteristics of a company; size, type of company, revenue, and location. When the lead is captured, the form is used to attempt to gain as much firmographics as possible. Like the contact’s job title. This information helps to classify the lead. By knowing information about the company and the lead, follow-up communications can be personalized toward the type of company or the expressed need. These follow-up communications are called lead nurturing. The goal of lead nurturing is to learn about the lead. The CRM can measure and record the contact’s responses to follow-up communications; how much information they read, or engage with, and how often. If enough activity is recorded, and the firmographics match up, the lead is then considered a prospect. This means that they are a target decision maker, or influencer in a target company. Once identified as a prospect, communications are continually personalized and targeted to the content the prospect likes, opens, and engages with. Measuring the prospect’s actions and responses is called lead scoring. This counts all communications that the prospect has engaged with, and information that has been provided. Once this score reaches a specific amount, set by the company, the prospect is considered a sales opportunity. This means that they have consumed enough information, engaged with enough content, and provided enough information that they are open to a sales call and will most likely become a customer. The CRM manages all of the interactions, and follows a set of automation rules to match communications with the prospect. The company sets a threshold for the lead scoring. When that threshold is met, it notifies a salesperson to make a call. When the salesperson contacts the prospect, they’re already familiar with the company, and they are more open to become a customer. According to Forrester, companies that excel at lead nurturing generate 50% more sales at 33% lower cost. And that’s how you start to operate like Amazon.

Central to marketing automation, is the CRM. Customer Relationship Management Software. I’ll walk you through the basic functions of the CRM, and how it enables automation of your sales and marketing. Typically, customer information is siloed. Information is kept by the department responsible for that information. Sales keeps contact and customer information. Customer service maintains service and customer care. And someone else manages loyalty and purchase history. With that information being maintained in different areas of the same company, information is typically scattered, redundant, and, often, incorrectly connected. CRMs enable a dynamic data storage mechanism over the lifetime of a customer. From initial sales contact. To purchases. To customer service and loyalty. All of a customer’s interactions with a company. With this single view, from first contact to lifetime customer, businesses can now measure the impact of communications and the sales process throughout the entire customer relationship. Let’s go through a new customer scenario. Let’s say I respond to an offer through an email, which then causes me to go to a landing page. On the landing page, I register to watch a webinar. The CRM will record my initial contact information, the campaign source I first used, the landing page I visited, the webinar, and the subject matter of the content. Based on these actions, the CRM will follow pre-planned rules for ongoing engagement. Based on the webinars content, I’ll get followup emails and maybe display ads that advertise additional content, like white papers, research reports, or free trials. This process is called a DRIP Campaign. Literally, dripping relevant information in timed releases. Now, the CRM can act as an analytics platform, or it can connect with your web analytics. Emails are a primary CRM contact with prospects. Emails are sent based on a planned schedule. And the CRM maintains records of my interaction with those emails. Social posts, ads, or any other communication, dripped to me. Yes, it measures what links in the emails I click on, which conversion points I act on, and which content I am interacting with. Every time I interact with content, the interactions are recorded as behaviors to determine my level of interest and the content that I’m interested in. As I meet certain thresholds of behavior, then the CRM can change campaigns. For example, there may be an initial DRIP campaign based on first contact. The awareness stage. As I start to look for more information, the CRM determines that I should then receive the next DRIP campaign, focused on decision making. Now, if I take an action, such as viewing the pricing page, the instructions to the CRM can suspend any other campaigns and move me to a closing campaign, making an offer with an incentive, such as a discount if I act now. Of course, none of this is magic. It’s automated. The automation is the result of hours of planning and developing likely content scenarios that will convert a contact, grow leads, ultimately make them customers.

Data is the life blood of marketing automation. It drives the entire customer relationship. In this video, I’ll guide you through the important aspects of data and marketing automation. The first contact with someone starts recording data. Regardless if any information has been provided. The CRM is recording all methods that drive visitors to the website to properly track the effectiveness of campaigns. Let’s say that you search for something, visit a site, and then leave. But you see an ad in your social feed later, click on that and ultimately purchase, register or provide your email address. The CRM records how you became a lead, by the registration or purchase. But it also connects the data to your first visit, enabling companies to measure attribution. That is, how effective each channel is, and contributing results. The CRM records the content you are interested in, how you got it, and the campaigns that are effective, in bringing you back. What you click on, and what you view is measured as behavior. These determine your level of interest as a prospect and your activity as a customer. Because of this, data quality is a significant issue. Email addresses have a massive turnover rate, about 30% a year, because of job changes, address changes, and more. Maintaining a quality list is important. Since sending information to old or outdated email addresses can cause a company to lose money and reputation. So ensuring that your list is up-to-date, that contact information is up-to-date, and any status changes of customers is critical to maintaining a clear communication stream through your CRM. Also, laws and regulations have made it mandatory to disclose the information you maintain and how it is being used. Leads and customers have the right to opt out at any time and this must be processed immediately. Now, in this world of data, there are two types of data, that we are concerned with. I mentioned earlier that what you click on and view is your behavioral data. This is called implicit data. I like to refer to it as non-verbal, it’s based only on your actions. If you click on a link and an email, that is recorded, and it is an implicit action, as the system is measuring your interests based on actions. So the CRM derives that you must be interested in the content that you click, watch, download, register for, and convert on. This data is implicit. Now, the actual data that you provide through forms, phone conversations, and other interactions. The words that you directly communicate or type. That is explicit data. Data that you have directly given the company about you. Your name, your title, company name, issues, budget, timeline. This is highly valuable data, as it provides the context to the implicit behavioral data. It helps the company target you better. Knowing how the data is collected, what kind of data is collected, and how that data is organized is central to marketing automation.

Have you ever received a cold call? Someone trying to sell you something, and they don’t know you. Annoying, isn’t it? Well lead scoring is a feature of marketing automation that removes that annoyance and streamlines a company’s approach to sales. I’ll explain how. Many companies have products that require significant investment, and so there are multiple decision makers and the process can take months to unfold. That is what is meant when there is a 12 to 15 month buying cycle. This scales to smaller companies as well, where there may be only one or two decision makers, but it’s still a significant investment. Automation enables companies to measure the amount of online interactions a prospect or prospects from a company make during the sale’s cycle. Like website visits, video views and email clicks. This measures how interested a prospect is and what content they engage with. Lead nurturing is the place to start, and for some companies it may be enough. This can range from a single email-based nurture campaign, to hundreds of different scenarios for others. To get another view of the nurturing process, CRMs can provide lead scoring. What is being scored by the automation process are the amount of interactions and the type of interactions a user has with a company over time. Lead scoring takes into account the implicit, behavioral data, such as website page views or email opens. Those types of actions may only score a single point. If the prospect watches a video it can be worth two points. If they register and attend a webinar that could be worth eight points. As a side note, each company builds their own scoring systems. It’s largely based on measuring the process over and over and knowing how many points contribute to a qualified lead opportunity. Now, lead scoring also measures the explicit provided data. Getting a name can be worth 10 points. Getting a budget and a timeline for a decision can be worth 10 points each as well. As you can tell, getting information directly from the prospect is worth significantly more. The advantage of lead scoring is that the company is typically using a content marketing strategy to provide information important to the prospect and personalized to their interests, and it moves them through the buying cycle. As the prospect interacts with the content, it adds to their point value. Phone calls or emails are not actively pushing sales, but using explicit data gained to increase points. Then, when a specific threshold is reached, a sales call is made to the prospect, who is now considered a marked qualified lead. Based on the number of actions and how recently those actions have taken place, the sales call is usually a formality. Without the awkwardness of a cold call, this lead is now a priority for sales, as they have demonstrated enough interest and activity to make them a likely customer. Through lead scoring, companies are able to efficiently approach the sales process, by focusing on qualified prospects that have demonstrated intent, which is significantly more successful than making cold calls.

Metrics are the indicator of a successful campaign. They help to identify what’s working and what’s not working. They also provide a value which can be compared to other campaigns. For lead generation, you’ll need to know the value of a lead and the cost of developing a new lead. First, to identify the value of a lead. In order to get this, you’ll need to know the value of a customer. This calculation is expressed as LTV, lifetime value. As a simple equation, multiply the average transaction of a customer by the amount of transactions per year and then how many years someone is a customer. Based on your business, this can become complex, as you figure in upsells, cross-sells, or subscription-based products. In our simple example, if we have an average purchase of $300, two times a year for three years, our average lifetime value is $1,800. Now let’s say it takes 100 leads to get a sale. So, we divide 100 leads into an average lifetime value of $1,800. Now, we know the average lead value, $18. Once we have this number, it shows how much we can afford to spend on marketing. Ideally, we don’t want to exceed spending more than that $18 per lead value, as it would take away from our profitability. This is why we measure our marketing campaigns, channels, and offers, in order to see which are delivering the best leads at the lowest costs. Attribution measurements help us to see how different channels contribute to the results of the campaign. For example, if someone found us through paid search, and then organic search, and then through a display campaign, we would want to be sure each channel gets credit for the lead. We also want to measure the value of the offer. This is where you measure the difference between a free demo or a discount, which offer creates more leads. For email, we can calculate the value of a campaign by the amount of revenue or leads generated. Dividing the revenue or value generated by the amount of emails sent, you get a revenue per email metric. This metric can be used to compare against other campaigns for effectiveness. You can look at the overall revenue generated by your entire email list and divide that by the number of subscribers. This will provide you with a value per subscriber, which you can use to value new subscribers. Similarly, these campaign metrics can be applied to social media, tracking the revenue or value created from social media campaigns. Divide that by the number of followers, and you can see the value of a follower. Bringing big numbers down to practical, per customer, per user, per email, or per follower revenue calculations, enables you to see a comparative approach to revenue, generated by different campaigns, channels, and offers. This lets you make better decisions in deciding on spend and investment in order to find the least expensive, highest quality leads.

How many times have you made a decision based on points, miles, or rewards? Probably more than you realize. Loyalty and rewards programs build loyalists from a customer base, here’s how. The benefits of building a more loyal customer or loyalist, are clear. First, it increases the brand identification of that customer. If I’m a member of a specific brand’s loyalty program, then I’m more likely to stay in that hotel or fly that airline. In addition, the more loyal I am to a brand, the more it increases my customer lifetime value. As a brand, if I create more loyalists out of my existing customers, I automatically increase their value and their spend. When developing a rewards or loyalty program, businesses usually start with the RFM model. Recency, the date of the last purchase, frequency, how often the customer shops, and monetary, how much the customer spends. These three measurements can provide an insight into your best customers as determined by how often they buy, how much they spend, and their most recent visit. Simply establishing a percentage of your best customers to this measurement, enables a place to start when developing a rewards or loyalty program. Creating a loyalty program for a business provides one-to-one communication with the customer. It also enables the company to collect additional data on customers, which can then be used to tailor offers based on needs and preferences. The types of programs vary. Most loyalty programs are based on points. Purchases amount to points, which can then be redeemed for products or discounts. Starbucks is an example of this simple point system, where each purchase earns you points towards a free drink. Building from this is the tiered point system. There are two variations to this. One example is where customers earn a $5 certificate for every $100 of purchases. Second, where your points build and you attain levels of membership. For airlines each level provides additional benefits, such as no bag fees, expedited check-in, or more miles when booking. Another type of loyalty is the paid loyalty program. This is where customers pay more for a higher level of service. It sounds ridiculous, but a recent estimate placed the number of Americans paying for Amazon Prime at 80 million. That’s 80 million members paying $100 a year. This is even more amazing when you factor in that Prime members spend an average of $1,300 a year compared to non-Prime Amazon customers who only spend an average of $700 a year. It proves that people are willing to pay for a better customer experience. Loyalty is highly effective when it creates an inner circle mentality among loyal customers. This is a very powerful concept. When rewards are exclusive to a small group, it reinforces loyalty to the brand and rewards those who spend the most. Other methods of creating an inner circle are through products betas, where specific people are asked to try or test new products. This also works for B2B companies through user groups. Also, companies bring in customers to help develop or modify their products for other uses or applications. In a sense, promoting the hacking of a product in order to reach new customers. If you’re like most people, you’re probably a member of at least 20 rewards programs. Why? Because we like to be rewarded for our loyalty.

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