Our tagline at HRmarketer is "Publicty. Traffic. Leads". Whether a client is using HRmarketer.com or working with our HRmarketer Services Group we are measured (or at least we prefer to be) by these key metrics - how much publicity we are getting the company (online and print), how much traffic we drive to the company's web site and how many qualified sales leads we deliver. A related fourth metric is SEO - improving a company's organic search engine rankings.
On the surface, these metrics seem fairly straightforward - certainly easier to measure than traditional PR or print advertising.
Here are two examples.
Example #1: A client who recently began working with our HRmarketer Services Group saw traffic to his web site increase 162% in the first four months of working with HRmarketer. Nothing else had changed so the increase, he agreed, had to be a result of our work. But the client was unsure if the increase in publicity and traffic was leading to more business. Fair question. While the client said he had never been busier and was having trouble keeping up with leads, he said many of those leads were from trade shows he had recently attended and from existing client referrals. The traffic we were generating was a result of the SEO work we did for the client's web site (a one time investment), ongoing search-optimized press releases and online/print placements. We had yet to do any direct email marketing campaigns tied to a content download (a sure fire way of generating leads and easy to measure) or any PPC campaigns so we couldn't show for certain how the increased web site traffic was impacting revenue.
Example #2: Another client of ours realized similar improvements to their online visibility, site traffic and sales leads but again, questioned whether or not our efforts were resulting in increased sales revenue. Once again, while we could easily show how our marketing and PR activities were impacting the key metrics mentioned above, it was difficult for us to show specific examples of how these metrics impacted revenue.
In both of these examples, life is good for the client - the phone is ringing more, leads are coming in and deals are being closed at a greater rate than they were prior to us working with the company. But it is not always easy to show specifically how our efforts are contributing to the sales revenue.
Whether you are a HR vendor or a marketing/PR firm, I'm sure you can relate. It is difficult, and frustrating, to prove your value to your customers month to month. It can be especially frustrating when a client looks at a specific time frame (e.g., last quarter) and asks the question, "what kind of ROI have we received from our investment in your services"?
An article I recently read titled PPC Accountability: Is Tracking ROI Actually Hurting Your Business? sheds some light on this dilemma.
The article says (read the entire article - it's quite good):
For [many companies], measuring return-on-investment (ROI) seems to be the Holy Grail of pay-per-click (PPC) accountability. Everyone seems to be working toward the day when they can measure and adjust their PPC campaigns by the actual profit-contribution-per-dollar-spent. After all, it just makes good business sense, right? Not necessarily. While this may sound like blasphemy to some, for many e-commerce companies and Internet retailers, measuring and managing PPC campaigns by ROI could actually be hurting their growth and profits.What does this have to do with measuring marketing and PR?
Analyze the PPC campaigns of a typical Internet retailer and you'll often find these campaigns are primarily producing new customers and very little repeat customer activity. Intuitively, this makes perfect sense. Many new customers will initially find the retailer by conducting a search then clicking on a PPC listing. Less likely, however, is that these customers will follow this same search-to-PPC path when making subsequent visits or purchases. These customers are already familiar with the retailer and know what they have to offer. And, as existing customers they are probably receiving regular follow-up communications from the retailer. So, for subsequent purchases there’s little need for these customers to use a PPC listing.
Any multi-line Internet retailer should know that a new customer is often worth far more than the revenue and profits associated with their initial transactions. For some online sellers, the initial transactions are just the tip of the iceberg as those customers return again and again, over a longer period of time.
When LTV (lifetime value - the net-profit generated over the period of time a customer remains active.) is considered, it’s easy to see how a new customer acquired through PPC could be worth much more than just the near-term revenue associated with their initial purchases. It should also be easier to see how an Internet retailer’s growth and profits could be negatively affected by PPC decisions based on near term ROI measurements.
A lot. Let's say a customer pays a vendor $10,000 to search optimize their web site and then pays a retainer of $5,000/month for ongoing marketing and PR including media outreach, distributing monthly press releases (search optimized), sending direct email campaigns, etc. The results, as we have mentioned, are measurable increases to the company's visibility and web site traffic, sales leads and organic search rankings. What is not easily calculated is the LTV of these metrics and activities.
How do you place a value on the fact that when a HR buyer types into Google "applicant tracking systems" your company shows up on page 1? While it may have taken 3-6 months and an investment of $40,000 to achieve the page one Google ranking (based on the SEO and monthly marketing/PR activities) the company will realize benefits for months, sometimes years, from this ranking. You can say the same thing about a press release. Some companies will question the value of a single search-optimized press release (how much did I pay you for that!). But that release may result in numerous online placements and inbound links to your web site. And because these online placements and links don't go away, the client will realize benefits for a long time. And what about the value of a white paper that gets downloaded by hundreds of HR executives and circulated around C-Suite hallways? Or a Podcast that is available on iTunes?
But what have you done for me lately?
And that is the problem. Our problem, not the customers. Whether we like it or not, as vendors, we must work hard on finding ways to measure the value of our services. Fortunately, new technologies are being introduced regularly that are making it easier to measure the value of various marketing and PR activities.
But for many marketing and PR tactics, there is still a level of subjectiveness. A starting point is getting the client to appreciate the concept of LTV and working together to find ways to measure the LTV of your product or service - it will be different for each client and for each type of marketing or PR activity. It's going to be challenging but it's a conversation worth initiating with your customers.
In the meantime, maybe we need to lobby for a "Marketing and PR Firm Appreciation Day". We have one for Secretaries, why not marketing and PR firms :-))
Posted by Mark Willaman
Labels: LTV, measuring marketing and PR