Who needs a budget? You do!

A week or so ago I was sitting at my desk staring at the 80 or so emails sitting in my inbox thinking how I could use a nap, when a new email popped up, I clicked on it and it was someone I had just met from one of the marketing groups I belonged to on LinkedIn asking about purchasing data and conducting an email marketing campaign, now normally I would have forwarded this email to sales and let them handle it, but since I had a dialogue with this person earlier in the week I didn’t want them to think I was blowing them off by shuffling them off to someone else, so I replied to the email and I asked them a few questions like some of the specifics on targeting the list and information about the product/service being sold and what their budget was.

They replied to my email quickly, less than five minutes later I was reading their response which gave me the specifics I was looking for, but no mention of a budget, so I replied again asking them what type of volume they were looking for and what was their budget and sent it whirling through cyber space back to them.

I guess there was not much traffic on the super information highway that day, because faster than I could start day dreaming about a fantasy vacation on the Love Boat with the Pussy Cat Dolls I had a response.  They answer wasn’t quite what I was looking for, he told me he was looking to email as many people as possible and didn’t really have a budget.  I’d like to be able to say that this was not a typical response, but I would be lying.

I find it frustrating that people do not know what their budget is, and it is really difficult to give someone a quote without knowing how much they have to spend.  In this case he really gave me very little to work on, not only did he not give me a budget but he didn’t tell me what kind of volume he was looking for so I had no idea where to start because his particular product was being marketed to general consumers over 25,  anywhere in the U.S., so the variable in cost, based on volume was tremendous, the cost could be anywhere from a few hundred dollars to several thousands of dollars because we have access to over 70 million consumers in the U.S.

In the post graduate classes I teach part time to MBA students one of the things I emphasize is that every company needs a budget, regardless of size.  I always tell them if you were in the market to purchase a new car and you had $30,000 to spend you wouldn’t go out and look at an $80,000 Lexus or a $100,000 sports car would you?  No of course not, why waste your time, when that is not what you can afford.  Marketing isn’t any different; you are not going to call Fox about advertising in Prime time during the broadcast of American Idol if your budget is $10,000 for this quarter, because that’s not enough for even one night.

In all the years that I have been in business and have done consulting I have heard more excuses for not having a budget than you can shake a stick at. “I can’t afford much” “things are slow right now” “My budget depends on how good the marketing program is”  “I believe in word of mouth or network marketing” I often have the desire to reach across my desk and grab the person by the collar and start to shake them until either their eyeballs pop out of their heads or they start yelling, “ok, ok, I’ll get a budget”.

“Every company, even a one-person consultancy, should have a defined marketing budget. You absolutely, positively will misspend, overspend and/or wrongly spend if you do not have a budget” (theladders.com).

Marketing is such a large world, it really is impossible to plan or execute any type of successful advertising without having a budget. I have seen small businesses waste so much money in advertising because they did not have a plan or a budget and they spent on the first thing that looked good.  A good rule of thumb for small businesses under $1 million is to dedicate 10% to marketing.  This percentage will decrease as profits increase.

According to a press release put out by ImageWorks in 2007 (prweb.com) the following is a breakdown of how much a company should be spending on marketing:

  • If revenue is under $5 million, then the marketing budget is usually 7-8%.
  • If revenue is $5-10 million, then the marketing budget is usually 6-7%.
  • If revenue is $10-50 million, then the marketing budget is usually 5-6%.
  • If revenue is $50-100 million, then the marketing budget is usually 4-5%.
  • If revenue is over $100 million, then the marketing budget is usually 2-3%.

 

It is actually possible to spend more money than you wanted or could afford if you do not have a budget, because you are not tracking every penny as you would be with a budget.  A good budget and marketing plan will allow you to track what you are spending and where and the results from those efforts.

So winging it simply just doesn’t work, every company of every size should have and needs to have a budget to ensure long term growth and profitability.

Joe Melle

Joe Melle has founded and ran several successful businesses, and has had an interesting career in direct contact media, call center operations, sales operations, customer service operations, customer retention, and quality assurance; he has written over 140 business articles, and serves as a part time adjunct professor for a university teaching business, marketing, and management courses to both graduate and post graduate students.Email Me

Cheap Email Lists For Sale, Too Good To Be True?

Yesterday in one of the LinkedIn groups that I belong to someone posted a message that they had found a really good source for email marketing data and pasted the link to the site.  Being curious I clicked on the link to check it out and as I suspected it was a site that was offering millions of email records for just a few dollars; 42 million for $99 to be exact, which they claimed were all opt in.  They provided a sample of about 50 records or so, actually the sample was just a snapshot of the records it was not actually a download, however it did show the email addresses along with the name, address and phone, so I manually copied at random five of the email addresses and sent an email to them, and less than two minutes later three of them bounced back to me with a server error advising that these addresses were not valid.  I then took another five and emailed them and four of these bounced back to me with the same message.

Does anyone really think that a legitimate marketing company is going to sell 42 million email address records for less than a hundred bucks?  My company has a data base of real opt in records and I can assure you that nothing we sell is for $99. First of all would you really want to buy a list that was so cheap that everyone and his brother were buying?  No because the people on these lists would be getting so much email that they would very quickly either close their email account or just abandon it.  I also doubt the legitimacy of this list and others like it being “Opt -in”, I once found a site that was selling 300 million double opt in email addresses all in the United States; my first problem with this is there is not 300 million people with an email address in the United States, and even if there were they certainly did not all opt in.

People are always looking for a cheap way to do business, most commonly small businesses because they do not have the budget to do the type of marketing they really want to do, and I can understand this, unfortunately there are not any short cuts when it comes to marketing, at least none that are effective.  You get what you pay for and the old adage “it its seems too good to be true it probably is” certainly applies here.

You can do a search on Google and find dozens of companies selling opt in email addresses, and most of them are cheap and very affordable, and using them would no doubt cause you a myriad of trouble including possibly losing your hosting.  I have been to many of these sites and some of them are very professionally created and even have a list of companies they do business with, fortune 500 companies that we are all familiar with.  Just because a company claims that Bank of America or Dell computers is their client doesn’t make it true.  These companies prey on small businesses that are desperately looking for a cheap way to advertise and a way to create new business.  I have noticed that most of the time these companies do not have a phone number to contact them, if you were to go to my companies site, we list email addresses and a phone number to contact us as do most of the other companies that we do business with.  I am always leery of doing business with a company that does not provide a phone number and it always makes me think that they  are hiding, why would a business with a legitimate product to sell not make themselves available to the very people they are trying to sell to?

If you are going to use email marketing, use a company that is legitimate and do not base your decision on doing business with a company solely on price.  It costs money to make money, and you have to spend in order to generate profit, there is just no way around this.

Joe Melle

Joe Melle has founded and ran several successful businesses, and has had an interesting career in direct contact media, call center operations, sales operations, customer service operations, customer retention, and quality assurance; he has written over 140 business articles, and serves as a part time adjunct professor for a university teaching business, marketing, and management courses to both graduate and post graduate students.Email Me

Is Live Chat the Future of Customer Service?

Customer service is important to every company in every vertical everywhere; it is a measurable benchmark that is constantly being eyed by company executives worldwide.  There has been research done by numerous companies in numerous verticals in an attempt to measure customer satisfaction.  Just about everyone at one time or another has called their bank, or credit card company, hosting company,  phone company and more and been asked if they would like to participate in a customer satisfaction survey.  It goes without saying that if the customer is not happy, they are most likely not going to continue to do business with  a company, which is why so many companies work so hard at determining if the customer is happy.

With success comes the burden of having to service the customer which up to now has meant having a call center with customer service agents.  One of the biggest issues that companies have faced is customers complaining about being on hold or not able to get a customer service rep on the phone.  This is not unique to any one type of company, it happens everywhere and it is not an uncommon situation for customers having to wait for up to 30 minutes to get someone on the phone due to the huge influx of incoming calls. The resolution to this problem in the past has always been a complicated one, and while the answer may seem simple, which is to hire more agents, it’s really not always that simple. Hiring more agents mean spending more money and a company has to consider whether that is cost effective and if it is in the budget.  And even if it is, it still may not be that simple, is there enough capacity to accommodate the hiring of new agents?  Are there enough seats, phone lines, will the dialer be able to handle the additional work load?

Thanks to modern technology there are solutions to the customer service issue, and that solution is “Live Chat”.  Live Chat is an online communication interface which allows a customer to speak to a customer service agent online using an instant message system.  It alleviates many of the customer service issues that have existed in the past.

LivePerson is a publicly traded company that is a leader in the live chat market and has been in business since 1995 and went public in 2000.  I called LivePerson asking to speak to someone because I was writing an article on live chat services and they directed me to their Corporate Communications Director Amy Inlow, who was more than willing to talk to me and was very helpful.

I asked Amy how many clients they had and she told me they had 8500 customers with an aggregated  10 million chats per month.   I asked Amy if to her knowledge any company had completely abandoned using traditional customer service and sales contact centers and had gravitated totally to Live Chat and she said that she was not aware of any; however she said many companies have made Live Chat their primary method of customer service.  Traditional customer service is limited to an agent talking to one customer at a time, I asked her how many customers could an agent talk to using Live Chat and she replied that using LivePerson an agent could comfortable have three to four concurrent chats at the same time and that having this ability creates operational efficiency which leads to an overall reduced cost in terms of customer service.  She said, “Chat is a critical communications channel due to the real time component, and while online customers can have their  questions answered at the point they need help, chat provides that real time communication that other channels may not, which is why it is so effective.”

Amy gave me access to research that was conducted just last month by Forrester Research, Inc. (Making Proactive Chat Work, by Diane Clarkson for eBusiness & Channel Strategy Professionals, June 4, 2010) which provided some very interesting statistical information.  According to this research 44% of online customers say that having questions answered while in the middle of an online purchase is one of the most important features that a website can offer.  Nearly one in five online customers have used chat in a customer service aspect in the last year and that 57% of these customers stated that they would likely abandon a purchase if they cannot find the answer to their questions quickly.  The report stated that 19% of online consumers have used chat for customer support and that 29% are interested in using it and that the 53% difference between the combination of use and interest is most likely due to chats low availability compared with other customer service channels.  27% agreed that they would like having a chat box appear asking if they needed any help and while this number is small compared to the 71% that would prefer to initiate contact for customer service Forrester believes that the number of people who would like it would grow in appeal as the number of proactive chat invitations increase.

 

 

It appears that Live Chat is definitely becoming more popular, and is cost effective, with the average cost being around $100 per month per agent, with discounts for bulk purchasing.

During my research I found myself at dell.com which uses Live Chat by LivePerson and through their Live Chat I was able to talk to “Cherry” who was more than happy to answer my questions.  I asked Cherry if Dell’s customers seemed to be satisfied with customer service using the Live Chat platform and she said that they ask every customer at the end of the chat if they were satisfied with the level of service and that the majority of them are pleased.  I then asked  Cherry if she thought that Dell’s customers would rather use Live Chat than calling in on the phone and she said that in her experience customers prefer using the chat especially customers that are on the go because they do not have time to sit in a phone queue waiting to be helped.  The last question that I asked Cherry was has she had any positive feedback from customers on Live Chat and she said that she has had quite a bit of positive comments made especially mentioning having the ability to send them reference links in real time.

A few years ago I did some consulting for a manufacturing company that had a small customer service department with around six customer service agents.  Their relations with their customers was a nightmare because the average hold time was over 30 minutes and sometimes as high as forty five minutes with as many as 30 or 40 people on hold at once.   They had a website but it was not utilized much and was not put together very well.  I brought in a web design professional and under my direction the website was completely redesigned with a live chat application installed.  I had the customer service department telephone greeting message changed to advise callers that they could get faster service at the website.  I had two of the six agents assigned to nothing but Live Chat with the other three rotating and at the end of three months the average queue time was less than one minute with only about five people in the queue at any given time.  This is evidence to me that Live Chat is effective even on a small scale and that while the jury might still be out on the final decision on Live Chat that so far it is looking good and that Live Chat may be the future “standard” for customer service.

Joe Melle

Joe Melle has founded and ran several successful businesses, and has had an interesting career in direct contact media, call center operations, sales operations, customer service operations, customer retention, and quality assurance; he has written over 140 business articles, and serves as a part time adjunct professor for a university teaching business, marketing, and management courses to both graduate and post graduate students.Email Me

Email Marketing Versus Direct mail

Every day I walk down the driveway to my mailbox to collect my mail, and every day along with the few bills I actually get in my mailbox (which is not much as most everything I do these days is paperless billing) I have a few advertisements just as everyone does, which is nothing new it’s been this way for years.  I also get my fair share of email advertisements from various companies; and for the record I am not talking about spam, I am talking about companies that I actually do business with.  I have an account with IKEA who occasionally sends me email advertisements and once or twice a month I get an ad from Bally’s Casino in Las Vegas which is where I stay whenever I visit sin city. This brought me to think about a subject that comes up often which is, will email marketing make direct mail extinct?

According to an article written last year by Mal Warwick direct mail is alive and kicking; he stated that in the fund raising industry more money is raised through direct mail than email, in fact he says that email only accounts for 2 percent of the total funds raised in the United States by non profits, that is only $7 billion out of $306 billion. It is unknown why direct mail is such a heavy hitter in the fundraising industry but what is known is that is accounts for a substantial portion of all non profit donations. (frogloop.com)

However it seems that in the profit industry that email is holding its own, according to the DMA email generates over 21% of the total revenue of campaigns and 58% of US Marketing Executives feel ‘Marketing ROI’ is currently the most important buzzword/trend to pay attention to. – Anderson Analytics and Marketing Executives Networking Group “Marketing Trends Report 2010” (emailstatcenter.com)

It seems that both email and direct mail have something to offer and while email marketing has one of the best ROI’s in marketing it’s also evident that direct mail is still in it for the long haul and using email and direct mail together is something that Throttle Media has always believed in and according to DMNews response rates increase across the board when direct mail and email are combined in a multichannel campaign. They claim that if executed properly it should more than double and that by using these two media’s together will also strengthen your brand especially if your campaigns maintain a consistent look and theme (dmnews.com).

Cross media advertising has always been suggested and something that larger companies have always participated in. The more ways you get your brand out there the better, and creating a multichannel campaign is not only effective for the current product or service you are marketing it is good for the long term marketing of your brand. So it looks like direct mail and email marketing can not only coexist but also work extremely well together.

Joe Melle

Joe Melle has founded and ran several successful businesses, and has had an interesting career in direct contact media, call center operations, sales operations, customer service operations, customer retention, and quality assurance; he has written over 140 business articles, and serves as a part time adjunct professor for a university teaching business, marketing, and management courses to both graduate and post graduate students.Email Me

Hide there’s a salesman coming

Have you ever noticed that sales people are not very popular and that they are avoided as much as possible?  Just about everyone has had experiences with a sales person that is pushy and just won’t take no for an answer.  How many times have you picked up the phone while at work and some sales person on the other end was trying to sell you something and just didn’t seem to understand the words “not interested”?  Or how many times has a sales person called you during dinner and you just couldn’t seem to get off the phone short of hanging up on them, all the while your dinner is getting cold? Sales people over the years have gotten the rap of being pushy and irritating and people everywhere do their best to avoid them whenever possible.

Prior to cell phones and VOIP lines being common, long distance service was a huge market and companies like A&T and Sprint spent millions on marketing, you couldn’t turn on the T.V. or radio, or open a magazine or newspaper without seeing some sort of advertisement about long distance service, and it was common practice for sales people to call you and try to convince you to switch your long distance service.  I remember once a salesman called me pitching the long distance rates of one of the long distance company’s  which will remain nameless, and he tried to convince me that he could save my company hundreds of dollars a year by offering a less expensive rate than I was currently paying.  I politely told him that I was not interested and that I was happy with the service I had.  I could not get this guy to stop talking, even after telling him several times that I was not interested he kept on going and going.  I finally had to be very blunt and tell him I was busy and basically hung up on him. Do you think he got the picture that I was not interested?  No, he kept calling several times a week,  leaving voice mails, I even spoke to him several times after that, and each time told him I was not interested, and at one point even told him that he was harassing me and to stop calling, and yet he kept on calling.  I eventually had to call the company and complain, several times, in order to get the calls to stop.

You can be a good salesman without being a pushy salesman, and in my experience when you are that pushy and you spend that much time running your mouth, you spend very little time listening so that even if you get the sale, you probably won’t have a happy customer because you didn’t spend any time actually listening to the customer, and finding out what the customer’s needs were, you were too busy trying to “close the deal” so that you could get your commission. My grandmother told me that God gave us two ears and one mouth for a reason, that being, you should listen twice as much as you talk.  A good salesman is not pushy and when he does have a potential customer, he listens to what they have to say, so that he can deliver a product or service based on the customer’s needs, and that is exactly the point, a good salesman is focused on the customer’s needs, a pushy salesman is focused on his needs.

Unfortunately these pushy salesmen have given all salesmen a bad reputation, and now whenever you try to get someone on the phone or even visit them personally their guard is already up, because of the past experiences that they have had with other sales people. So what do you do to overcome this obstacle?  You have to show them that you are not pushy, you have to show them that you are willing to listen to what they have to say and not spend the entire conversation overselling the product or service, making it sound too good to be true and honest with them and manage their expectations, because as I talked about last week in my article “ (Honesty and integrity in sales, is it possible?)  it is better to lose a sale by being honest than to sell something that the client is not going to be happy with.  Creating long lasting relationships is more valuable than that one commission and in the long run you can help change that perspective of how sales people are looked at, one customer at a time, one sale at a time.

Joe Melle

Joe Melle has founded and ran several successful businesses, and has had an interesting career in direct contact media, call center operations, sales operations, customer service operations, customer retention, and quality assurance; he has written over 140 business articles, and serves as a part time adjunct professor for a university teaching business, marketing, and management courses to both graduate and post graduate students.Email Me