Track It or Forget It

LIFE IS FULL of ironies. Here’s one of my favorites: Marketing pros who would never attempt a direct mail campaign without a careful cost/payback analysis that tracks every imaginable piece of data are the first ones to implement phone programs with no plan for projecting or keeping track of results.

Once you add the telephone channel to the mix, everything changes. While there’sno doubt the phone can increase response and conversion exponentially, this channel does add costs that must be analyzed against profitability. Many times, phone programs fail or underperform simply because campaign planners did not identify exactly how “success” would be tracked and measured. If the quick payback analysis you run on day one indicates a “no go,” it’s far better to revise or kill the campaign before it kicks off than to wade through the aftermath.

And answering the question, “What exactly happened?” with “Well…we got 1,459 calls” or “We made 743 sales” provides only half the picture…or less. The point is how the use of the telephone affected your outcome, and how to prove it.

Sometimes prelaunch planning requires nothing more than a simple “reality check” against past results, especially if you have prior phone-driven revenue programs for historical analysis. The trick is comparing apples to apples in projecting response. With new products, markets or both, that isn’t always easy.

When you have new elements, it helps to consider the likely receptivity of the market, the complexity of the campaign and the resulting requirements for the telephone program. These can be charted on a matrix from relatively simple campaigns with a higher success potential to those that are more complex and risky.

Let’s explore some of these elements as they relate to an outbound calling campaign.

* Level 1. A non-sales call (research, service-related or rapport-building) to customers about current products, in a single call cycle.

* Level 2. A sales call to customers about current products or add-ons they’re likely to be familiar with.

* Level 3. A sales call to customers about a new, unknown product.

* Level 4. A sales call about a commodity type or easily understood product to a new market of non-customers.

* Level 5. A sales call requiring multiple call cycles about a new product to a completely new market (resulting in potentially higher resistance, high phone campaign complexity and much greater support requirements).

The net result of this exercise is that a call is not just a call. Understanding where it falls on this continuum will help you determine how likely you are to get positive results. Projecting sales per hour, day or month is essential for estimating return on investment and all the data you’ll need to determine it.

Here’s an oversimplified example: A lead-generation program without the ability to track leads by various mail, trade show, phone, field or other sources. Add to that a lack of closed-loop reporting from the field about the quality and status of leads cultivated by phone. In the end, if the phone group cannot accurately document its impact on sales (even if everyone “knows” they’ve helped bring along prospects from tire kicking, through sampling, to the proposal stage) they’re at some risk for the next budget cut.

Sometimes success is not what it appears to be. Before adding reps to call past registrants to boost attendance at your next event, ask yourself: “Will the additional phone-related expenses result in incremental sales, or will we just spend more money to sign up people who would have sent in their registrations anyway?”

There’s only one way to find out. Divide your list randomly into a control group that receives no phone contact, and a test group that is called. Be sure reps follow a scripted call guide so their presentations are consistent. At the end of this effort you will be able to prove whether the additional investment in a telephone contact resulted in a net gain in registration fees. (You may decide the effort is worthwhile for other reasons, such as database cleaning, new seminar topic generation, etc. Just be sure you can quantify those benefits.)

Here’s another classic example. The next time you find yourself pressured to use your inside sales group to push a low-margin item in a single-focus campaign, explore testing the promotion through an outside telemarketing service agency. Even through such a test may end up losing money, be prepared for management to suggest bringing the campaign inside anyway. That’s when projecting results based on a lower (but realistic) cost of sales for your group can prove that the promotion would be far less profitable than your current sales activities. Usually, amid some grumbling, bright ideas like this eventually fade into oblivion.

Failing to track results is the most common mistake companies make in using the phone. The second most common error is tracking the wrong thing. It’s profitability, not just sales, that counts.

Don’t forget to measure:

* Back-end cancellations (especially with a “soft” trial offer). When you deduct cancellations from your gross sales figures, you track the effectiveness of your offer as well as the quality of your fulfillment package and product. Companies that focus solely on front-end results end up rewarding reps for questionable sales and losing customers in the long run.

* Customer retention. Which customers keep buying from you and which have stopped? Does periodic telephone contact affect this ratio? It costs a lot more to attract new customers than it does to keep the ones you already have.

* Customer development. Has the order value increased for customers who are contacted by phone? Do they purchase higher-margin goods?

* Market coverage. Do your phone reps contact every account in their territories or just “cherry pick” the easy sales? If they’re not covering the entire market, you’re probably losing sales and customers.

These measurements are vitally important in planning the test. If the test doesn’t allow enough time for your reps to cover their entire territory, for example, your results may be skewed.

* List performance. For outbound calling campaigns, statistics on “unworkable” calling records (disconnected numbers, wrong numbers, busies, answering machines) will help determine if a program is underperforming due to list issues unrelated to the script, the offer or rep performance.

* Media source. For inbound campaigns, it’s just as important to track the source of the response for an incoming call as it is for a mail response. Make sure tracking codes for the mail list, advertisement or phone extension can be found easily by the caller. If possible, these codes should be located near the inbound 800 number.

* Campaign performance. In analyzing results, it helps to understand how prospects respond to the phone offer. Remember to track such data as the number of completed calls that turned into leads for future follow-up, prospects who were not qualified for your product/service, qualified prospects who were not interested, literature requests, contacts that were not available, and the like.

* Calling productivity. These are the statistics that help you determine the productivity of internal or outsourced representatives on the program, such as the number of dialed call attempts, completed calls to a decision maker, scheduled callbacks to a decision maker or list penetration.

Keep this rule in mind when measuring your telephone results: What happens on the phone is forgotten quickly, but what it cost will be remembered forever.

A realistic cost/payback analysis should be your first step in planning any campaign. Be sure to separate the cost for any new effort from your other phone operations.

If you’re not prepared to do that, you should consider testing the campaign through an outsourced service agency where all costs and results can be tracked separately.