April 11, 2001
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B2BMarketingBiz From MarketingSherpa.com
*************** April 11, 2001; Vol. 2, Issue 15
Please forward *without* cutting.
FREE subscriptions at: http://www.b2bmarketingbiz.com
1) NEWS: Top 4 B-to-B Online ROI Metrics; Is it Still Spam When???;
Partnerships Sought
2) KNOW-HOW: Your CRM/eCRM Data Integration Project Part II -- How
to Pick the Technology That's Right for You
**********
NEWS
**********
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* Key ROI Metrics B-to-B Marketers Should Use for Online Campaigns
Click throughs don't do it anymore. These days ROI rules.
According to Christian Sarkar of BMC Software, B-to-B marketers need
to measure four different types of metrics to determine an online
campaign's success:
Metric #1 Attraction
How much does it cost you to acquire each new visitor? What are
visitors worth to you if they don't buy anything? (For example,
some companies have started selling banners to 3rd parties on their
corporate sites.) How big is the total audience who might visit
your site, and how much is it worth to you to grab a certain share
of that pie?
Metric #2 Conversion
What's your conversion rate from visitor to opt-in? (An opt-in can
be anyone who signs up at your site to receive something from you -
- perhaps a newsletter or sales quote.) What's your cost of site
maintenance per conversion? (Due to fixed costs, this should go
down as you add on opt-ins or buyers.)
Metric #3 Retention
What percent of your opt-ins actually convert to become paying
buyers? What's your churn rate -- repeat visitors who are more
likely to buy vs. first timers who are less likely to buy
immediately. What's your opt-out percentage (i.e. people who say
"take me off your list.") How old is your average opt-out? Long-
term members or buyers should be less likely to opt-out.
Metric #4 Value Transfer
What's your value per transaction per customer? How many
transactions does the average customer make over time? (i.e.
lifetime value) How do repeat customers' purchases and cost-per-
purchase compare to first-time buyers? What's your customer churn
rate -- what percent are very likely to buy from you again?
Don't be alarmed, if you're not already collecting all of these
metrics. Few marketers we speak with are all the way there yet.
However, these types of metrics should be on your list of goals for
the next 12-24 months as you evolve your Web site and marketing
database. At the very least, they will help you defend your online
marketing budget during the next budget season!
* Is it Still Spam When I Put a Legal Ending on my Message?
Last week a B-to-B MarketingBiz subscriber called us to ask, "Is it
spam if I put the following message on my broadcast emails?:
THIS MESSAGE IS BEING SENT IN COMPLIANCE OF THE EMAIL BILL: SECTION
301. PER SECTION, PARAGRAPH (a) (2) (c) of S. 1618. To discontinue
receipt of further notice and to be removed from our database,
please reply with the word Remove in subject."
Our answer: if you are sending a non-requested, broadcast email
message, it's spam no matter what you write at the end of it! In
fact, lots of well-known spammers stick that message on their
emails to look more official. However, no boilerplate copy of this
nature, no matter how legal sounding, can save you from accusations
of spam and dangerous repercussions.
Just how dangerous can the repercussions be? Right now lots of new
laws are being debated at the local, national and international
levels to stop spammers. Plus, if any ISP such as AOL or UUNet
thinks you are a spammer they can put your company on a blacklist
so none of your email goes out to their members! In addition, spam
can seriously sully your brand name in the minds of recipients.
Got questions about what's spam and what's not? Feel free to email
our editors at editor@b2bmarketingbiz.com. No question is too
dumb. Spam is one of the most serious issues facing B-to-B marketers
today.
* Corporate Apparel Unlimited Seeks Online Partnerships
Phil Beukema, President Corporate Apparel Unlimited, contacted us
to say he's looking for "partnership arrangements with other B-to-B
sites who are non-competing but who are generally targeting the
same kind of client prospect pool that I am." Beukema is an online
wholesaler of imprinted casual apparel and accessories. Interested
parties should contact him at philsr@corporateapparelunlimited.com.
http://www.CAUnlimited.com
*******************
KNOW-HOW: Your CRM/eCRM Data Integration Project Part II -- How to
Pick the Technology That's Right for You
*******************
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Here is Part II to our exclusive interview with marketing database
integration expert Bernice Grossman, President DMRS Group, who's
served as an expert consultant on the subject since 1983.
Last month in Part I of this interview, Grossman explained the
eight key tactics to create a successful RFP for a your CRM/eCRM
data integration project (see link below.) Now she takes us on the
next step -- figuring out which vendors to send the RFP to, and who
to ultimately contract for the job.
BEST QUOTE: "When someone tells me 'Oh yes, we're adding that
feature' I always say, 'Great, I'd like to take a look at it to see
how it works and then I'd like you to tell me two-to-three places
where you've installed it and it's already in use; and, then we can
move forward from there.
"I prefer not to put my clients in a beta situation. If I tell you
I'm going to add heart surgery to the list of things I do, what are
the chances you'd like me to do your heart surgery next?"
HOW TO SELECT THE RIGHT 6-7 VENDORS TO SEND YOUR RFP TO:
Dozens of technology providers are offering CRM/eCRM "solutions"
these days. Grossman's advice is firm -- don't waste your time
evaluating any of them until you've thoroughly examined your
internal needs and produced a detailed RFP that everyone involved
has signed off on. Internal research comes before external.
Only after you have an RFP in hand should you begin to learn about
suppliers in order to figure out to whom to send it. Without
extensive experience, the culling process will probably take you
30-45 days. (A consultant can do it in under a week.)
Your initial goal is to narrow the field to just 5-6 vendors. In
fact Grossman says, "People who are unsure send out too many RFPs."
Why not invite more vendors to participate? A primary
consideration is workload. If you've written your RFP correctly,
responses will probably weigh in at over 100 pages each. Then,
everyone in your committee has to read them. Plus, remember every
additional RFP sent out means more sales rep relationship
management, more NDAs to deal with, etc.
Here are the questions you should ask in order to narrow down your
list for 5-6 companies BEFORE you send out RFPs:
(Tip: Grossman says if you are a famous name-brand client, you
might want to have someone make these preliminary calls on your
behalf without revealing who they are representing. That's because
sales reps are only human -- why tempt them to make promises they
can't fulfill because they'd love to get your company name on their
client list?)
1. B-to-B vs. B2C: Many CRM/eCRM companies specialize in consumer data
as opposed to B-to-B data. Since B-to-B data is much more complex, and
just plain different from B2C, you can eliminate these vendors from
your pool immediately.
2. Web-enabled: Some providers still don't offer Web browser-
enabled software. If this is a prerequisite on your RFP (and it is
on many people's these days) you shouldn't even look at them.
3. Time Schedules: Demand is high these days, so some providers,
who might otherwise be perfect for you, may have too much on their
plates already. You should make preliminary calls to find out who
has time to handle your job within your required deadlines.
4. Clients: If possible, find out what companies your competitors
have used for similar purposes. Grossman says, "It's perfectly
reasonable in your up-front research to ask who vendors work for
and if they've done work for specific competitors."
Marketplace expertise can be a plus. In fact, one year after
consulting for Christian Dior Cosmetics, Grossman was hired in
rapid succession by five more large cosmetics firms.
5. Installed Base: Unless you've already decided you're interested
in being a beta tester (see below for more info), eliminate every
technology that doesn't have an installed base already. If you
won't have the opportunity to evaluate the technology in real-
world, live-action, it's not worth sending an RFP.
TOP FOUR QUESTIONS YOU MIGHT HAVE ABOUT RFPS
1. Should you insist on Non-Disclosure Agreements (NDAs)?
Yes, you should definitely make potential suppliers sign NDAs prior
to receiving your RFP. Expect in return to be required to sign one
for the vendor before they reveal the inner workings of their
technology to you. This can slow down the process. Grossman says,
"I've gone back and forth 7-8 times just to get an NDA signed."
However, if your RFP is well written, the level of information it
contains is definitely something you don't want your competitors
getting their hands on.
2. Should one vendor be able to handle all your requirements?
It's "highly unlikely" that one company can do 100% of what you
need done, and handle every angle of the job equally well. So,
you'll probably need several vendors. In this case, be sure to ask
each three key questions:
a. Are you able to integrate your services with other providers?
b. Are you willing to work with other vendors? (And, is there
anyone you don't like working with?)
c. Who do you already have a history of doing business with?
3. Should You Consider Being a Beta Tester?
A beta tester is someone who's agreed to be one of the very first
installed clients for either a new company, or new technology from
an established provider. While Grossman doesn't advise her clients
to be beta testers for the reasons quoted at the start of this
article, she does say, "Lots of companies have had a terrific
experience being a beta."
The good side: serious savings. If you have a big need and a small
budget, beta testing may be your only shot at getting the tech you
need.
The bad side: "It will absolutely take longer than anybody
thought." Plus you'll have to deal with bugs, and possible
underperformance.
Also, bear in mind as a beta tester, you may be expected to open up
your facility and operations for tours from other prospective
clients. If your operation (or corporate culture) is super-top-
secret, beta testing won't work for you.
4. How much time should you give vendors to reply to an RFP?
Three weeks is a good time frame. Grossman says, "The only time
I'd give them a month is if there's a major holiday."
Formality is the key to timeframe success -- every vendor should
receive your RFP on the exact same date and have the exact same
response deadline. If you change the deadline for one, to be fair
you must change the deadline for all. Grossman says, "If they
can't handle the deadline for an RFP, it's usually a clue that
there may be some other areas where meeting schedules may be a
problem."
THE NEXT 3 STEPS: PICKING A FINAL SURVIVOR
Step #1: Evaluating RFP Responses
Before you send out an RFP, you should create a checklist that
every member of your committee will use to make his or her response
evaluations. So when the responses come in, you can evaluate them
both fairly and easily.
(BTW: Grossman recommends placing the RFP responses as protected
Word or PDF documents on your intranet so committee members are not
waiting for a single print copy to be slowly circulated through
people's in-boxes.)
Be prepared to go through a second round of questions prior to
inviting vendors in to make personal presentations. These
questions will illuminate any answers that the vendor didn't
clearly explain in their response.
By the end of this process, your committee should be able to winnow
the list of 5-6 down to 2-3.
Step #2: Formal in-person presentations
Now it's time to invite the 2-3 survivors in for their first-round
in-person presentations. Limit presentation time to three hours
each; and, require that these presentations be online test-drives.
Grossman is very firm on this point, "Screenshots or Powerpoint
slides are not good enough!"
The object of the demonstration is to see for yourself exactly how
their system works, not to be sold with a flashy presentation.
After these first-round presentations, you should invite the best-
of-the-best back for full-day presentations. That's the time when
you'll want to bring in an average user from every department who
will be affected by the new system. Ask each user to actually test
drive the proposed technology while you're watching. Grossman
says, "I can't think of a better way for somebody to understand
what it's going to be like when they use it. So when a vendor
says, 'This is really intuitive', you can say, 'Show me!'"
Step #3: On Site Visits with Actual Clients
Once you've tested the technology yourself, why do you need to
travel to see it in place at other companies? Grossman uses the
analogy of buying a new car. You'll learn different things from
your own test drive versus from interviewing someone who's actually
owned the car for a while.
Remember, you're spending a lot of money on this technology. It's
worth the travel investment to check it out completely before
making your final decision. Expect to sign another NDA at this
point before being granted a client-side on-site visit.
Grossman recommends you make at least two client-side visits.
While you can ask the vendor to set these up for you, they should
NOT be among the attendees present. Double-check the clients they
recommend are indeed using the same technology you're considering
purchasing, and not something different from the same company.
Request interviews with specific titles and department heads ahead
of time so you know to whom you'll be talking. Then, respect their
time (plus make sure you get the most useful data) by preparing a
list of questions and check-offs prior to the trip. These should
include:
- Where did the project come in versus budget?
- Where did the project come in versus time estimates?
- How many staffers did the vendor assign to the project versus how
many they had expected to assign?
- How did their people mix with the client's culture?
- If you could have changed things, what would you have changed?
Once you've completed these final three steps, you should be ready
to pick the right vendor for your needs. Good luck!
DMRSGroup: http://www.dmrsgroup.com
PART I of this article:
http://www.b2bmarketingbiz.com/sample.cfm?contentID=1537
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