Tag Archives: roi

Groupon therapy anyone?

I’ve long resisted the urge to externalise my confusion around the hype surrounding Groupon. It feels like there’s this growing bandwagon that is building momentum, and like any high-profile and growing channel, it sometimes takes bravery to put your hand up and say “sorry, I don’t get this”.

After reading three excellent articles in The EconomistNew Media Age and Marketing Week this week, I’m left scratching my head and wondering if I’ve missed the point somewhere. I’m now feeling brave, so up goes my hand…

My understanding of Groupon was that its power came from a combination of reach and relevance. Targeting very localised offers would help promote local businesses and encourage product/service trial through a sales promotion.

So I signed-up. I commute into London, but my home town isn’t on Groupon. So I chose London as the nearest City, which is a compromise in itself. Here’s an example of one of these ‘local’ offers I received on day 2.

Some speed-boating fun off the Kent coast, which doesn’t feel either well targeted or relevant for my interests. I confess to having a low irritation threshold for things like this, but I’m sure I’m not alone.

But before the ‘localised’ model has been fully scaled, it seems that the strategy may be changing, and that Groupon is positioning itself as ‘an alternative form of marketing to TV or Press’, with a daily reach via email in excess of 5 million (NMA). So with the potential change of direction to focus on major and high street brands, I decided to do some maths on the recent ASOS deal, by way of an example: 

  • ASOS Sells 50,000 £20 vouchers for £11 each (Cost of discount £9 x 50,000 = £450,000)
  • According to The Economist article, Groupon ‘typically charges businesses half of the discounted price of a voucher’ (50% of £11 x 50,000 = £275,000)
  • Total cost to ASOS = £725,000. My maths tell me this works out to be a cost of £14.50 per £20 income generated (72.5%) from each of the 50,000 vouchers sold

Now, maybe the average online order value for a brand like ASOS will be able to absorb this kind of cost per acquisition within the increased basket value of the final order (I’d love to see a case study on income and profitability outcomes from this promotion).

BUT how many small, local businesses (who I thought were at the core of the original Groupon idea) can afford to spend £72.50 to attract £100 of revenue? Those that think they can may not be there to take advantage of any future business from loyal customers acquired through this channel.

Can someone enlighten me? Have you got any real-life Groupon deals where you’ve become a loyal, repeat customer off the back of a heavily discounted offer? My gut feel is that most Groupon customers are transient bargain-hunters. Or, in the words of one of my Twitter contacts, “…it’s not sustainable reach, granted – but who am I to argue with my £150 spa treatment for £24.”

Should marketers act like they own the business?

I’ve been in marketing for over a dozen years now in a number of different B2B sectors and businesses. One of the constant challenges throughout my career to date has been the variability in how marketing is perceived by ‘the business’ (the collective noun that marketers often use to describe non-marketing stakeholders and decision makers).

 More often than not, when perceptions are negative, it’s down to the fact that the marketing function has failed to demonstrate and communicate the value created through its efforts. Often, there is no direct alignment to the business strategy and objectives.

This isn’t a new problem, and I can’t say I’ve not been guilty of this at times in my own career, but the scale of the challenge is as high as it has ever been.

A recent CIM/Deloitte survey revealed that a mere 7% of respondents ‘always set KPIs clearly for each initiative’, and only [maybe the same?] 7% ‘always set clear accountabilities for objectives’. 

By my maths, this means that a staggering 93% of Marketers must be hoping for the best when embarking on marketing programmes. If we don’t know what to expect and we don’t know who’s responsible for success or failure, it is no surprise that marketing teams sometimes struggle to articulate the value they create.

Is acting like you own the business the answer?

So, should Marketers think (and act) more like shareholders when developing marketing programmes? I believe so. If you think (and act) as if you owned the company you work for, and imagined it was your money you’re investing in marketing, would you sign off on the investment?

Here are three ways that marketers can demonstrate they are thinking (and acting) like the owners of the business when building and implementing their marketing plans:  

1) Aligning marketing objectives to business strategy will help to tangibly demonstrate the value you are adding to the business. This isn’t easy (only 37% of organisations ‘think their business strategy is clearly translated into marketing objectives’ according to the CIM/Deloitte survey) but it shouldn’t stop us trying.   

2) Define truly SMART objectives that demonstrate the clear line of sight between business strategy and marketing strategy. Set the right metrics and make sure you take accountability for achieving them.

3) Communicate your plans and progress in the context of how it is supporting the achievement of the business strategy.  Keep communication open and two-way. Tell the broader business what you are doing, how it is going, and gather feedback from functions that are critical in the achievement of your objectives (sales, finance, operations etc). Repeat.

I’m keen to hear your views on this. What are the benefits and drawbacks of thinking like a shareholder? What are the challenges of adopting such a mindset?

B2B Telemarketing: 3 critical success factors

In a recent B2B Marketing Magazine feature on Telemarketing, I was interested to see that 70% of respondents to a survey of 200 B2B Marketers said that the technique was either ‘critical’ or ‘very important’ as part of their demand generation activities. With such a high number, I am still amazed to experience so many examples of it done badly.

Having managed both in-house and outsourced Telemarketing teams in the past, I have seen first-hand how powerful this technique can be for lead generation and appointment-setting campaigns. I also know how hard it is to do consistently well.

Having recently moved jobs, I have been inundated with cold calls from a wide range of marketing service providers. Some of them get the firm’s name wrong, and too many try to close an appointment without establishing if I have the time, appetite or budget to enter into any form of dialogue, no matter how exploratory.

In my experience, successful B2B Telemarketing depends on a number of critical success factors:

  1. Start with good quality data  We all have data challenges, but how have you gathered that this person is in the market for the goods or services you are about to try to sell to them, and how confident are you that the demand might be there? 
  2. Enhance it with research  I know that outbound telemarketing is often seen as a numbers game, but the art is in making the recipient of each call not feel like it is! Take time to do some basic research into the company AND the individual you are trying to target, BEFORE you pick up the phone. If you get the name of my firm wrong (as happened to me recently), this is unlikely to impress me.
  3. Hire and retain only exceptional people who are capable of building a credible rapport on the phone, sometimes over a period of several months. Demonstrating that you understand and are actively listening for information that can help me to solve a business problem will always help.

Does any of this resonate with you? Have you been on the end of great (or dreadful) B2B Telemarketing experiences? How did they make you feel, and did they win your business?