MY Data Science: February 2020
Updated: Feb 19, 2020
YOU CAN’T MANAGE IT IF YOU CAN’T MEASURE IT
How data helps our clients avoid marketing's great black hole
Vice President of Sales & Marketing, iProv
I DIDN’T START out as a marketing guy. My degree is in history with a minor in political science, and I planned to teach American History in high school. After graduation I was thinking about this job or that job, and even maybe going on to grad school. Then one evening a friend invited me to a networking event. I got there before my friend did, so I took a seat at the bar and ordered a drink. Pretty soon this very extroverted guy next to me introduced himself as R.J. Martino and started up a conversation. I told him my background and what I was thinking of doing, and after about five minutes he gave me his card and said, “You seem like a smart guy. If you’re interested in looking at doing something else, holler at me.” So about a month went by and I called him, went by the office, had an hour-long conversation with him and his sister, Roxane, both owners and cofounders of the company, and left there with a sales job. That was seven years ago.
The company that R.J. and Roxane Martino started is called iProv, and my role is to consult with different organizations—our sweet spot tends to be companies with annual revenue of about $1.5 million to $3 million—and help them figure out what their goals are, and how to reach them. Then I work with my team to develop a plan to help them get from where they are to where they want to be.
Business today is largely an attention game, and all businesses are in the business of marketing. Most companies that need our services are just trying to find a different way to get out in front of more people, and that is essentially our business: to help clients get in front of the people that they want—and need—to get in front of.
One of my favorite quotes is from marketing pioneer John Wanamaker: “Half the money I spend on advertising is wasted. The trouble is, I don’t know which half.” That quote resonates with me because it’s still true—we talk with lots of business owners who feel like they’re constantly throwing money into a black hole, and part of it seems to be working but they don’t have a clue as to which part. Our job is to bring clarity to the situation. Which includes proving return on investment.
How do we do that? Traditionally a business owner could place an ad in a magazine or run a TV spot and, ipso facto, however many readers the magazine claimed or the size of the TV audience was the number of people who were going to see his ad. But that’s typically where the data stopped. Today, with all the toolsets that are out there, we can trace those magazine readers or that TV audience member from the first time they saw your ad, all the way through to when a sale was made.
For example, one of our clients is a dental office in Little Rock. They’ve worked with us for about six years. When we started with them, they were getting probably 250 people per month to their website, from which they derived about two new patients a month. But there was no way to tell how many leads it took for them to get those two patients, nor any real way to even tell what about the dental website resonated with them. All the dentists knew was that these people set up an appointment and came in a month later. “How’d you hear about us?” they were asked. “Oh, I don’t know—Google?” “What’d you Google?” “I can’t remember.” It was the old black hole again—nothing to go on. As we tell our clients, “You can’t manage it if you can’t measure it.” So the trick is to find a way to apply metrics to the situation.
We always start by sitting down with the client and asking what his or her vision is for the company. From there we can dig into what overall strategies we need. When I say strategies, I mean identifying what type of person the client is hoping to get in front of; what in their life the client’s product or service solves; and where these people are likely to come across the client’s organization. Then we develop marketing tactics around the kinds of content creation we need. Do we need to do email newsletters? What about social media? And if so, where on social media do we need to focus our attention?
What about direct mail? You may be surprised to hear me say that, since most people today consider direct mail dead. But with all of us receiving fewer and fewer pieces in snail mail, a well-designed and well-branded piece can really stand out—in fact, we’ll pretty much guarantee that it’ll get opened. Then if there’s a metered phone number that the recipient can only get from the direct mail piece, and a completely different URL than our client’s main website, we can track the actions of everyone who responds. We can take that direct mail piece and say, okay, cool, we spent $600 on a list and the actual materials for this direct mail piece, but once we sent it out we had 200 people visit the website. We had 45 people pick up the phone and call, and this was the only way they could get that phone number. Now if our client has some sort of customer relationship management toolset, we can put these prospects in a very specific bucket and track them over, say, six months to see how they’re progressing through the sales process—and whether or not it makes sense to send another direct mail piece, or if we need to increase or decrease the budget. That’s how we track return on investment.
For the dental client I mentioned earlier, our initial thought about applying metrics was to establish the lifetime value of each new patient—the American Dental Association provides us with those numbers. But what we found was that while a lifetime value of a patient sounds great, dentists—and doctors, for that matter—are more concerned with how much money they’ll have in their pocket this week. So we turned to a different metric—average earning per patient visit. We’re not talking about root canals, just normal proactive visits to the dentist, and the number we put on it was $250.
From there we could say, “Okay, how much are you spending on what you’re doing digitally to get those two people?” Besides the $40 a month it cost to have someone host their website, they were spending nothing. That would’ve been fine if they didn’t want to grow, but their goal was to bring in 10 or more new patients per month from the website. Their overall goal was 15 to 20 new patients per month, and they figured they could get the balance through referrals.
We think of traffic to a client’s website as a kind of “awareness box” that sits on top of the sales funnel. From that traffic come “marketing qualified leads”—people who’re filling out forms on the website. It’s really easy to measure that—for example, you can see that if you’re getting an average of 1,000 visitors per month, you’re getting about 10 people who fill out a form.
Now this is where it’s helpful for clients to have some backend business software showing how many of those marketing qualified leads turn into “sales qualified leads,” the next step in the process. Sales qualified leads are people who fit your buyer demographic and haven’t mistaken you for something else. They know what they’re doing when they call. Our job is to figure out what the close rate is for that person. That gives us a pretty good idea of how many people we need to drive to you in order to deliver the requisite number of patients—or customers or clients, depending on your business—that will come out the bottom of the sales funnel every single month.
With our dental office client, within one year we had helped them achieve two times their goal, and we cut in half their cost per new patient acquisition. Now it’s five years later and they’ve increased their monthly clinic revenue by 18X. Today they want to see 78 new patients per month, and they’ve expanded their facility and added staff to handle the growth. They no longer do any marketing besides iProv.
THAT DENTAL OFFICE is one of our proudest success stories, and to a great extent it’s due to the dentists themselves—they’re determined to grow their business, and they’re willing to put in the hard work and resources to accomplish it.
But not all business owners are that driven, or that savvy. And because technology comes at us so hard and fast today, a lot of folks I meet just don’t know where to start. “I know I need to do something,” they might tell me. “I get ten phone calls a day from people saying they can get me to the top of Google for a few hundred bucks. I get another ten phone calls from people saying, ‘I’ve been digging around on your social and I think I can help you out.’ Then I get these other agencies calling up and saying, ‘Hey, you know you really need to run some Google ads, let me help you do that.’ Or, ‘Hey, have you guys looked into this?’” So a lot of the time, these business owners or managers are pulled in so many different directions that they just melt down from decision fatigue. If you give me too many options, I’m not going to pick any of them.
This can make for some difficult conversations. In our process, the first time is just an introductory visit, usually just me or one other person from our office doing a little strategic probing: “Tell me about your business. What are your challenges? What are your goals? What are you hoping to achieve? What’s the long-term plan? What happens if you do nothing?” I’ve sat across the table from managers who are clearly ashamed, because these conversations shine a light on the fact that they haven’t been measuring at all, or maybe they’ve been measuring the wrong things.
But my message to all clients is, We’re not judging; we’re here to help. We’re that extra pair of eyes that everybody needs from time to time. Quite often, in fact, it’s not so much a matter of our implementing something new as it is a question of adjusting and aligning what’s already in place. We have a client, for example, who told us he wanted to grow one section of his customer base by 80 percent. After we studied the situation, we went back to him and said, “Listen, you don’t need eighty percent growth over here; what you really need is to increase your customer retention fifteen percent over there. You do that and then all you need is another twenty percent to pay for this exclusive service you offer, and we think you’re going to get this just by being who you are.”
“Okay,” he said, “prove it to us.” So we ran some different campaigns for six months and our theory proved right. They saw 66 percent growth, but focusing only on the two areas we recommended, instead of spreading their marketing message across a whole bunch of different areas.
Through metrics, we help companies establish priorities. Maybe you have a sales background and you’re responsible for controlling revenue—but what’s the one number that you can move or control this week in order to get that revenue next month? Maybe it’s phone calls, maybe it’s meetings, maybe it’s stop-ins, but control what you can control, follow whatever internal process you have, and you’ll get there. It’s just like setting any goal. I want to lose 20 pounds, cool—I can say that all day long, but if I'm not taking some very measurable steps and being deliberate about it, I'm never going to get where I want to be. Business is the very same way.