The Marketing Hot Seat: Aaron Strout

hotseatOf the folks who agreed to participate in The Marketing Hot Seat (all of them marketing practitioners in some form), Aaron Strout is the only one who is currently a CMO.  At Powered, Aaron is in a position to talk with peers on a regular basis about justifying the ROI on community. I’ve gotten to know Aaron over the last few years, before he became a Boston-to-Austin transplant, and he was one of the first ten people I started following on Twitter in mid-2007.  Several months ago Aaron asked me to participate in the Experts in the Industry Series (many of the Hot Seat contributors are fellow alums), and it was around that time I began to refer to Aaron as “the Kevin Bacon of Social Media.”  Aaron is the consummate connector and has a relevant, practical and thoughtful approach to the Marketing Hot Seat challenge.  It’s not what I expected, I’m guessing if you know Aaron and his background you might be surprised too.  (If you like what Aaron has to say I’d also recommend checking out his weekly Quick n’ Dirty Podcast with Jennifer Leggio where the talk of social media case studies is an informal breath of fresh air).

  • You’re the CMO.  You have a marketing budget of $1M.  Your company is a consumer product company, relatively unknown / early stage.  Customers who know the product like it. CEO wants ROI within 12 months.  What do you do?

aaronstroutLet me start by saying this is a brilliant exercise Adam for two reasons:
1) you’re getting some great advice from some of the smartest minds in the industry (well, from the other participants at least).
2) the rules of this “exercise” not only require us to be pithy but we also have to prove out an ROI, with all due respect, a topic that many bloggers can usually skate around.

What’s a little tricky about this exercise is that although you’ve specified that we are the CMOs of a “consumer product whose customers like our product,” the fact that we don’t know whether we’re selling soft drinks, software, or soft pillows — products that all require different channels of distribution — makes developing a marketing strategy tricky. Because I’ve only ever worked for companies that sell services and/or software, I’m going to pretend that the product is consumer software (delivered SaaS style).

Now that we know what we sell, I’m also going to assume that we make a profit of $20/month or $240/year/new customer. With these assumptions, we can start to create a budget and an ROI construct. For starters, I’m going to go out and hire three people to manage our marketing activities. You may or may not have intended us to include this in our plan but I’m going to exclude salaries because most companies bucket this as an operational cost:

  • manager of lead gen/SEO
  • manager of social media/PR
  • manager of event marketing

And here are the areas we’re going to spend our money:

  • $400,000 – paid search
  • $100,000 – event marketing/sponsorships
  • $125,000 – PR (think someone like SHIFT)
  • $300,000 – e-mail list rentals
  • $75,000 – research subscriptions/CRM/listening tools

Without going through all the math, lets say these paid activities drive 4,000,000 prospect touches with an average response rate of 2% resulting in 80,000 interested prospects. Assuming a 5% convert, that gives us 4,000 new customers at $240 per customer for a total profit of $960,000. [Note: these numbers may or may not be on target but for the sake of this exercise, it shows you that this is one way to think about the math behind marketing ROI].

Uh oh. That leaves us $40,001 short of our goal. But wait, that’s where social media comes in. Because we’re a smart company and we signed up for a listening service right out of the gate so we know where our potential customers are hanging out. We also have a manager of social media (along with our savvy CMO) that is blogging participating on Twitter, Facebook, Youtube and LinkedIn. All of these activities help increase reach and thus new prospects.

Let’s assume that if we’re doing our job right, we hit an additional 5,000 interested prospects with the same math as above. That gives us 250 incremental customers, so at $240/customer, we bring in an additional $60,000 and voila, we’re now at $1,020,000 in annual revenue. Yes, we’re squeaking by but we’ve built a great base for future marketing efforts. And while I didn’t include it here because our new company wasn’t quite ready for community, you can bet your bottom dollar that I would budget in a branded online community to the tune of $200-300K for year two. But that’s a blog post for another day…

What do you think?  Did Aaron nail it?  What would you do differently?

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The Marketing Hot Seat: Kyle Flaherty

hotseatI met Kyle Flaherty prior to his Boston to Austin journey and knew early on that he was a thought leader in marketing.  As Director of Marketing and Communications for Breakingpoint, Kyle is passionate about applying new marketing techniques in the B2B arena.  Besides his passion for the Red Sox, he and I continue to share the belief that social media provides new tools and approaches to complement the marketer’s toolbox.  I had high expectations on Kyle’s entry for the Marketing Hot Seat – especially with his help to craft the idea – and he doesn’t disappoint. Read on.

  • You’re the CMO.  You have a marketing budget of $1M.  Your company is a consumer product company, relatively unknown / early stage.  Customers who know the product like it. CEO wants ROI within 12 months.  What do you do?

One million dollars goes a long way these days when it comes to marketing and I would make the most out of it by brining on resources and tools to then implement the necessary tactics. There will be four steps to take:

  1. Listen

    Kyle Flaherty

    Kyle (2nd from Left) along with the infamous Tim Walker, Bill Johnston and yours truly.

    2. Firstly we will want to understand how people perceive our product, the competition and how they find and digest information. To begin we will need to understand the community vernacular starting with how they search. Instituting a sophisticated SEO campaign and a detailed keyword landscape we will begin to understand what people are saying and more importantly what words they are using. Employing Hubspot we will create a detailed keyword landscape and with Google Analytics we will be able to correctly identify how our community finds our own company.

    Using this keyword landscape we now plug terms into a combination of Meltwater Buzz and simple RSS aggregation to find the people who are using these terms, where they are having these conversations and how they like to engage with other people and potentially brands. Doing this over a healthy period of time, I recommend 60 days, we can build a tighter messaging platform, proper web copy and launch our brand new website! The latter portion will be the most costly, but it would be a shame to not have your website reflect what you have learned during the listen phase.

    COST:$200,000 ($80,000 going to website design and development, $20,000 to tools and $100,000 to salary of staff and outside consultants)

    TOTAL TIME ELAPSED: 60 days

  2. Participate

    3. Our brand new website has launched, properly communicating with our audience our product’s merits. Also, based on the above research in we determined the majority of our potential customers are using Twitter and that 78% of them have their own blog (come along with me, this is all fantasy). Understanding this information we have created a plan to integrate social media into our marketing campaigns. The campaigns will be centered on creative uses of our products and we will use social media, email, PPC and event marketing. An important note here: our company views social media as part of our communications DNA and not a separate entity.

    The marketing staff will combine to manage the campaigns, including social media, and be the defacto community managers since there is no need to have someone dedicated solely to that job if it is part of everyone’s job. Kicking it all off will be an exclusive invite to our kick-off party, hosted in New York City but broadcast live into rented out pubs throughout the world (open bar anyone?). After the kick-off we will be launching several PPC campaigns, an email push and dedicated conversations on Twitter and Facebook. The one central tenant to all of this will be the use of video and images taken by our users and aggregated throughout our platforms.

    COST: $300,000 (The event is going to take the majority, but we will also need to purchase video equipment for users, PPC, email tools and of course salary).

    TOTAL TIME ELAPSED: 180 days

  3. Nurture

    4. Customers are flowing into the website and purchases are through the roof, nice work! Now we have to nurture our base. Each day we are interacting with our community online, offering tips on how to better use our product, highlighting their photos/videos and creating our own online content for people to share. This is the pure work portion of our twelve months and will take a lot of time from the marketing staff. During this time we will also want to create our customer advisory council in order to gather more information about the use of the product (version 2 is slated for a Christmas launch), these people will also start to become our online ambassadors for the planned launch of our dedicated online forums.

    COST: $100,000 (Salary will be the majority, but some funds will be used to get the advisory council together)

  4. Measure

    5. This portion was started actually during the listening phase, but I didn’t want you to be confused. Our measurements will be directly related to our business goals and as a start-up these are on a quarterly basis. Using SalesForce.com we have built a sophisticated sales and marketing dashboards and integrating that directly into our website we are measuring lead source details each day. This will include the use of SalesForce’s Twitter application, some personalized javascript development and integration of Act On for web analytics. Our web analytics will not be just numbers, but the actions folks take, based on personas built during phase 1.Everything we do will be measured down to the dollar and the impact of that dollar to our bottom line.

    COST: $100,000 (SalesForce.com, Act On and customized development)

    TOTAL TIME: Although measurement will happen daily, we will really have a great feel for success at the one year mark.

    Now it’s time to plan for next year, and look at me, I have some money left over, I’m thinking bonuses for my staff.

Well done Kyle, thanks again for participating and inspiring this series.  What do you think of Kyle’s approach?  What would you do differently?

Photo credit: Aaron Strout via Flickr

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How Much is That Doggie in the Window?

smokefreeTwo campaigns caught my eye today that I wanted to capture and share as examples of the sheer brilliance of interactive marketing.  The first is a campaign in display advertising from Agency Republic.  The technique is to target “parents in routine and manual occupations” to reduce smoking in that audience.  Click through the image of the child to see the brief and walkthrough of how it worked, following a parent’s web use if the initial messages were ignored.  The campaign was runner up in September’s creative showcase awards.

The second campaign is an interactive billboard – I’ve mentioned before how display advertising is showing signs of life, but this takes it to whole new level.  A digital dog interacts with people that merely walk by the window.  Here is how it works:

People on the sidewalk are monitored by an IR camera in openFrameworks. In oF each individual person is isolated and assigned a unique id for the duration of their interaction. Each persons’ position and gesture information is continually sent to Unity3d via OSC networking protocol. In Unity, an artificial intelligence system representing the dog forms relationships with the individuals. He chooses which person to pay attention to, is able to move towards them or back away, responds to their gestures and initiates gestures of his own. Based on the interaction he gets excited or bored, friendly or aggressive, which is reflected in his behavior.

Just trust me, the video says it much better. Spotted via neatorama.

Sniff from karolina sobecka on Vimeo.

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The Marketing Hot Seat: Kevin Ertell

hotseatI first met Kevin Ertell in early 2007 when I took over as Rosetta‘s account executive on our engagement to build the new Borders.com. It was clear to me right away that Kevin had the marketing and ebusiness savvy to lead a large scale initiative to change how Borders takes on eCommerce.  Now as Foresee’s VP of Retail Strategy, Kevin is continuing to make his mark in online retail.  Kevin’s been a great partner to work with and I’m grateful that he was willing to be the first victim contributor on spotlight for The Marketing Hot Seat.  As a reminder, the challenge:

  • You’re the CMO.  You have a marketing budget of $1M.  Your company is a consumer product company, relatively unknown / early stage.  Customers who know the product like it. CEO wants ROI within 12 months.  What do you do?

Here’s a very thoughtful response from Kevin.

Kevin Ertell - blog photoOK. Setting aside all the caveats about the fact that I don’t know what the product is, what it costs to make and what our margins are, here’s generically how I would approach the situation:

Strategy

  1. Thoroughly understand the customers who like our product
    The customers who know our product like it. We need to find out why, in their words, and determine what personality traits, hobbies, demographics, etc. in those customers are relevant to their liking our products so that we can speak to others like them.
  2. Get our online destinations right
    With a relatively small marketing budget, we’re going to need to maximize our online strategy. (Actually, we should do that even if have a large marketing budget.) We need to make sure our website and our retailer websites are highly usable and highly effective in merchandising our product and providing the ability for customers to easily spread the word about us.
  3. Drive traffic with whatever budget is left
    Only when we have ensured that we have solid destinations for our traffic will we start to actively search for traffic.

Tactics

  1. Learn as much as we can about the customers who most love the product.
    Why do they like it? What are there personality types; let’s use the Myers-Briggs personality test and really get a thorough understanding of these folks. How do they describe our product? Let’s pay attention to the words they use as we’re going to reuse those words in our copy.
  2. Hire ForeSee Results to measure our site’s effectiveness from our customers’ perspectives.
    I realize this may seem self-serving since it’s my company, but I was a client for seven years before joining the company three months ago, and I’ve see how well it works.  So, I want it in this role. So there! We’ll use measurements, analysis, Session Replay and usability audits to ensure we’re providing the best experience we can.
  3. Hire Bryan Eisenberg to develop archetypes and to implement the Persuasion Architecture on our site.
    We need to speak to customers in language that resonates, and Bryan understands how to do that. We’ll also use that language for product descriptions and other content we give to retailers for their sites.
  4. Create a high quality product video.
    We’ll use this video on our own site and we’ll give it to retailers for their sites. We’ll focus on the key aspects customers love and use copy that includes words that resonate with those customers. We’ll also show real customer testimonials.
  5. Launch customer reviews and customer forums on our site
    We need to make sure our customers can openly provide their thoughts about our product, even when they’re negative.
  6. Launch several blogs on our site
    Since we only have one product, we need to provide some fresh and compelling content on our site to give people a reason to come back. The content doesn’t need to be about the product all the time. It can be able anything, as long as it’s compelling. I’ll focus on general marketing, our CEO can blog about leadership, and we’ll find some people to blog about topics our customers are interested in. All of this blog content will also be great for SEO.
  7. Launch a marketing campaign to retailers informing them about key customers and teaching them how to sell the product
    Our initial marketing efforts will essentially be internal. Let’s get the sellers pumped up and doing their jobs well before we send customers their way.
  8. Develop a widget for retailers that gives customers the ability to easily share information about the product
    We need to give our customers ways to share information about our product on their own in a way that is easy and positive. Let’s create a fun widget that people want to share on Facebook, Twitter, email, etc.
  9. Get our SEO right, buy search terms, send emails, run re-marketing campaigns, etc.
    I don’t want to minimize the value of these techniques, but we really need to make sure our destinations are right before we add lots of traffic.

So there you have it. My main point here is to focus on the customers first, the destination second and the traffic driving last.

This was a fun exercise, Adam. Thanks for allowing me to participate.

Thank you Kevin – I look forward to a good discussion here.

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The Marketing Hot Seat

hotseatOver the course of the last several years I’ve gotten to know and interact with a bunch of talented marketers.  One of my favorite benefits of the community on Twitter is access to these folks for great discussions.  In the interest of showcasing that talent pool, over the next few weeks I’m going to share with you several posts here in response to a challenge, inspired by this line in the movie Speed:

“Pop quiz, hotshot. There’s a bomb on a bus. Once the bus goes 50 miles an hour, the bomb is armed. If it drops below 50, it blows up. What do you do? What do you do?”

After some Mr. Burns-like scheming with my friend Kyle Flaherty, I’m pleased to kick off the first Marketing Hot Seat challenge.  I have posed the following situation to 13 marketing-minded folks who span a breadth of knowledge and experience in the industry:speed

  • You’re the CMO.  You have a marketing budget of $1M.  Your company is a consumer product company, relatively unknown / early stage.  Customers who know the product like it. CEO wants ROI within 12 months.  What do you do?

Each participant will get a maximum of 500 words for a blog post to be shared back here in the next several weeks. The hope is a Harvard Business Case-like discussion on factors that go into a decision process, strategy development and prioritization of budget.  We have a diverse set of minds from the worlds of eBusiness, digital strategy, marketing consultants, content marketing, search engine marketing, community management and PR.  I am really grateful to these talented individuals for being willing to jump on the hot seat:

Upcoming posts:

  • Todd Defren, principal at SHIFT Communications – TBD
  • Jennifer Leggio, ZDNet social business blogger + Fortinet strategic communications director + Security Twits herder emeritus – TBD
  • Alan Wolk - Blogger, Creative Strategist, Consultant – TBD
  • Jim Storer – Experienced community manager and social media strategist. Working on my next venture… The Community Roundtable – TBD
  • Ken Burbary – Digital Strategy and Social Media for Ernst & Young – TBD
  • Kipp Bodnar – Social Media Marketer who blogs at SocialMediaB2B.com – TBD
  • Li Evans (Liana ‘Li’ Evans) -  Director of Social Media for Serengeti Communications – TBD
  • Beth Harte – MarketingProfs Community Manager and #pr20chat Moderator. – TBD

You can bulk follow them here:

…and you can find them in a list on Twitter at http://twitter.com/adamcohen/marketinghotseat.

This is a great chance for all of us to engage in a healthy debate – extra points for creativity.  Where do you think they should get started?  Interested in being the company in the example?  It’s not too late, please let me know.

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