12/01/2010

By Simon Wajcenberg, CEO of Clash-Media

In the current climate, it is more important than ever that companies reach beyond their traditional markets — whether this is crossing into new vertical sectors or spanning new borders by going international. There is business to be won out there — companies just need to find it. I will in this article show you how it is possible to achieve a strong ROI from international direct marketing campaigns.

Recent research from Econsultancy shows that in the current economic conditions, companies — 38 per cent — are moving into other markets to extend their sales.However, the question for any organisation, small and major blue chips alike, is: how can they achieve this — how do you actually set up and manage a campaign that generates ROI, in an affordable way?

The research also showed that of the companies marketing internationally, the majority — 68 per cent — use Online Lead Generation. Online marketing enables organisations to spread the net as wide as possible. It is cost-effective to establish, can be straight-forward to manage and is highly measurable — so any marketer can easily see the return on investment that they’re getting for their budget spend.

More and more budget is now being allocated to online marketing — 61 per cent in 2009, up from 53 per cent last year. Marketers require visibility, which has seen less ROI-driven methods reduce in popularity, such as Paid Search by 12 per cent.

So how does Online Lead Generation fit into a marketer’s international business strategy?

Local Knowledge

It is important that before any international campaign can get off the ground there is sufficient knowledge of not only the local consumer market, but also the range of laws and regulations governing consumer data and proactive contact.

For example, in Germany, the new Privacy Amendment II will come into force on September 1st, which requires clear consent for the use of data for advertising purposes — this will ultimately eliminate cold calls. Consumers don’t have to ‘opt-in’, but marketers must be able to prove where their data was captured and that it was captured transparently and with consent. This is far more regulated than in the UK, for instance — which makes it important to know exactly how you are allowed to collect information internationally on interested consumers and then how you can put that data into action.

This level of local understanding is important to ensure that the delivery of the campaign is seamless and does not incur financial penalties for the company. If this expertise does not exist within the company, it’s important to find an agency that has this cross-border knowledge — trying to find separate agencies for each country is difficult, time consuming and ultimately costly.

Central management of the whole campaign

When expanding the campaign across borders, it is important to have effective management of the process. It is all too easy to drown in poorly targeted data from too many sources.

For an international campaign to generate maximum ROI, it needs clear management reporting that gives a high level of visibility to the whole process. This must happen on an ongoing basis so campaigns can be adjusted on a country-by-country basis to account for local market variations.

Reporting on the end results of the campaign is a good indicator of ROI, but it is too late to make adjustments if the results are less than expected and show market and country variations. Organisations need a regular insight into the campaign’s on-going success: they need to see where leads have come from, their quality and how they have performed, through a regular analysis. If they can review whether individual publishers, mailers or carriers of a campaign are performing well, those that are achieving results can have their quotas increased and the ones that aren’t can have their requirement reduced.

Scalability

Visibility of campaign information is highly important when the scope of the campaign is enlarged to run across multiple countries. As the number of outlets increases, so does the amount of analysis, but it shouldn’t double the burden because you’ve doubled the outlets. You should be able to easily see the top performing outlets in every country, as well as the worst, and adjust the campaign easily to maximise the ROI.

This approach to management is critical to ensure that ROI is not only achieved, but maximised. It also lowers the burden on marketing managers to find out what’s going wrong with a campaign — the visibility of information is such that strategic decisions can be easily made on an ongoing basis.

Critical Metrics — the right metrics

When measuring the success of the campaign, it is important to do so against the right metrics. Genuine return on investment should be reflected first of all in Cost per Acquisition (CPA), and secondly through Revenue per Acquisition (RPA).

The acceptable cost associated with acquiring every new customer has to be determined at the outset of the campaign and reviewed regularly. There needs to be a target CPA. If the campaign indicates that CPA is too close to the maximum after the first of three weeks, for example, then there need to be adjustments made very quickly so you can maximise ROI. Measuring the volume of leads generated, for example, is not sufficient to show whether you are on target for a good ROI.

The next important factor to consider is RPA. You may be able to convert a customer on a quick sale, especially if you’re in the FMCG/CPG market. However, the value that each customer brings in terms of their overall purchase shows whether you are converting the correct customers. The CPA on a campaign can be acceptable, but if the total value of each purchase is low, then profit margins are at the low end of expectations. To maximise RPA, you need to know where the valuable customers have come from and increase the flow of information from those outlets — this will improve RPA.

Maintaining Quality in all Countries improves CPA and RPA
Data quality is key to any marketing campaign and is important to improve both CPA and RPA. If the lead generated is factually incorrect — wrong contact details — then it is of no value, but even more importantly if these details are correct but then lead is not of a genuinely interested consumer then time and effort it being wasted.

How can a marketer ensure before the campaign starts that he or she will receive high quality data?

Firstly, marketers must find a service provider that can reach across enough touchpoints to find the potential customers that you’re interested in. If a publisher or mailer does not have the capability to reach the target audience, then the quality of information — in terms of relevance to the campaign — will be low.

Secondly, marketers need to know that the data provider has comprehensive cleansing and verification processes in place. This will help to ensure that the data is actually correct, but also that it matches the specifications for relevance. This ensures that campaigns deliver the strongest ROI possible, across different markets and multiple borders.

And with the correct data quality processes in place, it is possible to significantly reduce data fraud within the campaign and maximise ROI through improved CPA and RPA — because every interested consumer has a genuine interest and is relevant to the campaign’s product/service.

It is important for companies to look to new and international markets to maintain and grow a business through tough economic conditions, and they need to be able to do this with confidence and without a huge marketing spend. Yes, the internet provides a unique and potentially very valuable touchpoint to a future customer. But companies must ensure that their marketing campaign is controllable, transparent and producing real ROI as it develops.

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