Email is the most-used tool in the marketer's arsenal—but there's a pretty good chance your CEO just doesn't understand its contribution to the bottom line. Unfortunately, that's because most marketers don't get it either. And, as long as we don't get it, we also won't get the boss's ear long enough to get the resources we need.
Email marketing suffers from what I call the resource-to-ROI imbalance. Poorly done email still delivers pretty good ROI, so it's hard to justify the need for more resources.
But without those resources—namely, dedicated email specialists—you can't implement the best practices that could take your ROI from good enough to great.
Let's say you want to increase your annual email marketing budget from $300,000 to $500,000.
Make the standard plea for that budget increase "because you really need it," and you'll probably get a swift, no-brainer "No." Make the case that you can produce an extra $8 million from that $200,000 spend, and your CEO will probably say, "Make it happen."
Here's a three-step process for talking business with the boss, instead of weighing him or her down with marketese:
- Clarify the one strategic thing email does best for your company.
- Document why your current approach is leaving money on the table.
- Paint a clear and credible picture of what the new resources make possible.
Clarify what email does best
Most CEOs don't understand the "business purpose" email serves, because it's used for everything from marketing campaigns to shipping notifications to saying hi to Bob. This makes it hard to pin down what email is actually worth—until you get crystal clear on the strategic role and function of email in your company.
You start by assessing all the different ways your company distributes email externally. How much email is going out to customers, prospects, and partners? Who's sending those messages—other marketing teams, sales, customer support, IT? Pin down who's doing what, and then ask why.
Now take a step back and ask yourself, from a strategic marketing perspective, what email does best. For ecommerce and retail-oriented companies, this tends to be fairly straightforward. Email increases sales and customer loyalty by regularly driving customers to your Web site and retail locations.
But what if you work for a B2B company? It could be that you use your monthly newsletter and lead follow-up emails as the primary way to move prospects to a "ready-to-buy" stage, thereby increasing the productivity of your sales force.
Come to a consensus with management on the core role of email in your company, such as building brand relationships, retaining customers, driving revenue, generating leads, or a mix thereof.
Now build your entire marketing program around this one core function and directly correlate improvements to your email processes with tangible business benefits.
Demonstrate what's wrong with your current approach
Consider hiring en email-marketing expert to conduct an audit of your program. Outsiders serve as a credible "voice of authority," and they often find opportunities for improvement that you could never have envisioned—such as how to dramatically improve deliverability, increase opt-in conversion rates, or reduce list churn.
The audit should evaluate the "process" metrics that demonstrate how well-executed your email program is. Things like open, click-through, and bounce rates, unsubscribe activity, and spam complaints are indicative of larger issues, like the health of your lists or whether your subject lines are compelling.
But don't make the mistake of forgetting that you are probably the only one concerned with your process metrics. Your CEO could care less.
"Output" metrics are the lifeblood of the boardroom. The boss wants to know how email marketing is moving the company forward. Did it generate more revenue, increase brand awareness by 20 points, or get 10% more prospects to sign up for demos?
If email's one core role, for example, is converting second-tier search-engine-marketing leads into top-tier leads that the sales force can pursue, that's the starting point for your ROI analysis.
Your baseline ROI calculation should spell out how much it currently costs to achieve email's core strategic goal. Don't forget to include the cost of employee time, because unworkable internal processes are an often-overlooked bottleneck on the road to ROI.
Now put your ROI calculations in context by benchmarking your company against industry averages and best practices, which you can find in the trades and analyst reports. Showing how you stack up against competitors, and more importantly the leading practitioners, is the most eloquent argument you could ever give that your results are phenomenal or just ho-hum.
Prove the bottom-line impact of new resources
This third and final step is what turns the incessant marketer's whine for more resources into music to the CEO's ear.
You go beyond the usual plea for another full-time employee and perform a fact-based "gap analysis" of how much it costs to achieve your goals.
The gap analysis is where you turn pesky process metrics into a business case. If you're only getting 75% deliverability in the inbox, you need people with the right skill sets to redo your permission, opt-in, and authentication processes to reach a goal of 95%. If you close that 20% gap, how much would those additional opens, clicks, and conversions move you closer to your strategic goal?
This process also empowers you to justify shifts in marketing strategy. For example, your thought-leadership newsletter may prompt prospects to sign up for five demos per month—but your strategic goal is 25 demos. Closing that 20-demo gap may require a different approach, increased frequency, or an entirely new lifecycle-oriented email vehicle, so you present the costs and benefits associated with these changes to your program.
You should, of course, make sure your budgeting requests are in alignment with your company's "resources culture." For example, if your CEO prefers outsourcing, then recommend increased usage of an email marketing agency, your ESP, or freelancers.
Putting it all together results in a compelling business case:
- You present the current state of affairs: You currently spend $300,000 on email software providers, staffing, and designers, and you generate $6 million in revenue.
- You explain what's possible: If we invest $500,000, we can generate $14 million in revenue.
- You explain how you'll close the gap—that tighter list segmentation, higher deliverability, and reduced list churn affects your strategic goals by X percent or Y dollars. This forces you to be conservative with your forecasts, and convinces the CEO that you have the ability to accurately measure the improvements and hold yourself accountable.
Conclusion
Speaking the language of business, the only language your boss understands, is the key to getting the email-marketing resources you need. The best time to do your business-case analysis is right now, one tiny task at a time, in the summer months, when things are slow.
The week before budgets are due is not the time to start your analysis from scratch. Budget time is when you put the research pieces together to make sound recommendations about money and headcount.
Loren McDonald is chief marketing officer of J.L. Halsey (www.jlhalsey.com), a marketing technology and services company. Reach him at loren.mcdonald@jlhalsey.com.
Published on June 5, 2007
No comments:
Post a Comment