This past week I was tapped to chair the acquisition roundtable at the MediaPost Email Insider Summit at the lovely Kiawah Island Resort in South Carolina. If you ever have a chance to visit this part of the world, you should. I travel quite a bit and get to see some great places, so you should take my word for it. Kiawah Island is beautiful and you will love it.
Credibility and trust are hard won. I have some friends whose tastes are so close to mine that when they tell me a restaurant, hotel, hiking trail, movie, or book is something I should look into, I take them at their word. When it comes to hiring employees for LiveIntent, the same rules apply: recruiters and partners who have a track record of introducing candidates that end up performing well get more ‘reqs to fill.
As well as this method works for restaurants, museums, movies and marketing managers, trust only goes so far in digital marketing. Success in digital marketing is determined by measurement.
When it comes to acquiring new customers online, it’s important to measure ten times and cut after you’ve learned which source is not performing for you. Only by closely monitoring the source of your customers and their subsequent performance post-acquisition can you determine whether that source is valid for you. Does the subscriber open emails you send to them? Do they click? Do they convert? What is their average cart size? How do they perform compared to a control group?
With the analytical tools at your disposal, analyzing the success of your email subscriber and digital customer is not difficult. What will be difficult is deciding when and which subscriber sources to cut.
I call this analysis ‘ROSS’: Return on Subscriber Source.
A close cousin of ROAS – Return on Ad Spend – ROSS is a way for you to look at your acquisition efforts in an ongoing, longitudinal fashion. Here’s how you do it. Let’s focus on email subscription efforts, since capturing email addresses is a pretty common practice and generally considered the ‘top of the funnel’.
Establishing an acquisition program that works with a ROSS methodology requires an organized and methodical approach to data collection that should be familiar to and within the grasp of any direct or digital marketer. Here are the considerations:
1. Consider The Source : First, all of your acquisition sources: the forms on your website, the fishbowl in your store, the search ads you have running, Facebook (or any Social Sign-up), the outbound campaigns you run and the email ads that you buy programmatically all need to have a Publisher ID aka ‘PubID’ assigned. The PubID is the primary key for your customer acquisition efforts. The PubID establishes the quality index for your program. This is the ‘where’ element of the database you are making. If you have a lot of proverbial fishbowls on the top of a lot of ice cream counters, you are going to need a lot of PubIDs.
2. Time is on side your side: Marketers need to time and date stamp every acquisition. When was it acquired? This is very important for analytical purposes because you want to see how a name performs relative to another name on the file. You may find out that some sources produce results and ROI within 30 days and then fall off. You may find that other sources take longer to produce results, but when they do the results are incredible.
3. IP Address: What was the originating IP address of the signup? You won’t have this for fishbowls, so the database must be able to note that a piece of paper led to the signup.
4. Campaign: Campaign can seem like PubID, but often campaign can be a subset or a superset. Was the acquisition the result of a specific campaign? A trade show? A radio ad?
5. Creative: What creative drew the customer?
6. Device or Channel: Mobile, Web, Social, Email, Search. Enough Said.
7. Cost: This is super important. Often when I talk to marketers I hear them tell me that they are acquiring names for $1 using search. That leads – no pun intended – to a discussion of the relative performance of those names. There is an unspoken bias to compare leads to a benchmark cost that the marketer has in her head. Anchoring the CPL (cost per lead) to a familiar benchmark creates ‘cognitive bias’, making a more expensive or even less expensive lead somehow less valuable.
Once you have built your acquisition database around these key data elements, you can begin the ROSS process. How do you define a suitable ROSS?
The relative value of a lead is directly related to the sales cycle and expected performance of a lead for your business. If you are selling swimming pools you should expect a different response from your first email campaign to a new subscriber than if you were selling apparel. You must establish benchmarks and ratios. Some of these ratios would be: open rate, unsubscribe rate, click rate, conversion rate, first purchase post acquisition, average cart size or the number of purchases.
Start tracking these details and you should start to figure out if that $1 lead that you get in bulk is really performing. Maybe those $4 dollar leads are your best customers. Consider the source and you’ll be able to measure your marketing efforts better than ever before. But don’t take my word for it, let the numbers speak for themselves.