Targeting more responsive contacts triples response rates and increases total return by four times
SITUATION: A large data warehousing company was executing marketing campaigns designed to initiate relationships that would result in enterprise scale re-architecture of mission critical business systems. The sales cycle to achieve this end result was known to be long and complicated.
The marketing campaigns exclusively targeted CIOs and other very senior IT executives at large companies.
The status quo process was to reach out directly, and exclusively, to these very senior IT executives with door opening campaigns. These campaigns generally involved delivery of high value consulting at little or no cost. The offer was made by highly skilled telemarketing/telesales agents via an unsolicited telephone call. A baseline campaign of this type, built on a statistically representative sampling of the total available market produced meager results. Only 3.5% of the targeted executives were reached and of those, only 12.3% agreed to participate in the program – yielding a total benefi t to the company of only 0.4% of targeted companies.
This was deemed an unacceptable result for two reasons:
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There were a limited number of companies that met the client’s criteria for an acceptable customer and the campaign was just not making enough opportunities for the sales force;
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The cost per result at this very early stage of the buying cycle was very large at $3,780 per lead. Even though the eventual implementations would have an average revenue contribution of $3-4 million dollars, the client believed that they could do better.
Targeting more responsive contacts (functional managers instead of senior executives) improves response rates by 229%, take rates (cost savings analysis) by 35% and overall return appointments) 375%.
ASSIGNMENT: From the client’s perspective, the assignment was simple – find a way to engage a much larger proportion of the available market in the sales process faster, and at a more cost effective rate.
Massini Group broke down the problem into the following parts:
- Identify the best entry point into the target company for the relationship desired by the client;
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Identify the best method for reaching out to the optimal contact;
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Construct a methodology for operationalizing the campaign to assure optimal tactical performance.
KEY STRATEGY: Massini Group sought to construct a fact-based framework to prove that an alternative to the status quo would produce superior results. This would require building a database platform on which to analyze the client’s results to date, as well as constructing methods for implementing a champion challenger process to prove the alternative was in fact superior to the entrenched sensibilities and favorite approaches.
ENGINEERED PROCESSES: The client had a robust collection of historical data – over 800,000 attribute value pairs associated with over 450,000 touches and over 100,000 contacts at a relatively limited number of companies. Unfortunately, none of this data was codified in such a way as to make it useful for broad-based analysis.
Massini Group utilized a multi-phase comprehensive marketing process improvement, based on Massini Group’s Dialogue StrategySM, including:
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Application of a highly accurate and auditable codification of a number of details necessary to support the intended analysis, including:
a. contact functional level and department (business versus technical);
b. message category, media, and outcome associated with marketing touches;
c. relationship result to date;
d. timing associated with the latest transition in relationship result.
This set of steps was necessary to convert the raw data into a uniform dataset with which to apply statistical analysis. -
Implementation of a statistical correlation analysis that determined the effi cacy of 328 combinations of approaches relative to entry into the sales funnel and to eventual successful closure of the deal. Massini Group was able to quantitatively describe a number of functions of their marketing and sales efforts that were not intuitively obvious to the client, specifically:
a. in all cases, using a functional manager (director or VP level as opposed to senior executive or CIO) as an entry point to begin the sales process was superior by a rate of 2X;
b. in all cases, the probability of a successful sales result was increased by a rate of 2.5X when the process was begun with a functional manager instead of a senior executive;
c. senior executives presented a negative correlation relative to response to initial campaigns, whereas functional managers demonstrated a positive correlation, meaning functional managers were much more responsive than senior executives. -
Construction, using the results of the statistical analysis as a foundation, of a champion challenger test based upon the previously described control campaign targeted at senior executives.
The test campaign, based upon a statistically identical representative sample relative to the control campaign, increased the response rate to 11.5% (2X improvement) and increased the participation rate to 16.7% (35% improvement). The resulting yield of 1.9% (3.75X improvement) resulted in a cost per result of $616 (5X improvement).
RESULTS: The newly engineered marketing campaign increased the company’s appointment-setting rate by 3.75X. Client Sales Executives were able to better penetrate target accounts by first building relationships with a trusted subordinate of the CIO. This relationship enabled them to collect critical foundational data for making an argument for an enterprise wide implementation. Then they could be more successful in scheduling a face-to-face meetings with the CIO, bypassing the phalanx of gatekeepers.
Application of a disciplined and auditable codifi cation on an ample data set, and a robust analytical proof, allowed the client company to make a crucial tactical marketing campaign change in the face of politically entrenched methods. By doing so, the tactical execution of the campaign produced a 3.75X higher yield at 1/5 the cost and aligned the marketing deliverable with a process that produced sales results at a 2-2.5X greater rate.
