Strategy


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The Enrollment Challenge

Retirement readiness decisions are a daunting task for most employees. According to a 2012 Participant Engagement Study conducted by Lincoln Financial:

  • 41 percent of employees are only somewhat engaged or fully disengaged from any retirement plan
  •  7 percent of employees only are fully engaged and interact with their retirement plan on a regular basis.

Plan communication and education can provide people with the financial knowledge needed to better understand their employee benefits and make better enrollment decisions to achieve better outcomes.

Communication Is Key

The U.S. Employee Benefits Security Administration’s ERISA Advisory Council published a key report in 2010 on how plan communication practices and design options impact participation and contribution rates. They researched strategies for tailoring communications to different subgroups of employees through direct communication, and their effectiveness in influencing participants of diverse demographic market segments, including segments categorized by income level, household status, generation, gender, and ethnicity.

The report then provided recommendations of best practices for enrollment that are statistically proven to be effective, including education to plan sponsors on specific proven techniques and communication practices. In evaluating what communication methods are most effective in encouraging participants to save for retirement, the following considerations were made:

  • Cost: an effort was made to balance the need for comprehensive plan communications against cost.
  • Delivery: A variety of methods were explored including the use of current and emerging social media.
  • Plan Design: The study reviewed how plan designs relate to increasing participant enrollment and savings. In particular, the Council studied the use of automatic features. Automatic enrollment plans automatically choose the employees’ contribution percentage and enroll the participant in an investment vehicle. This raises participation rates to close to 90 percent. However employees enrolled at low contribution rates of 3% or less tend not to deeply consider or increase their contributions.

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9 Recommendations and Best Practices

The Council found that effective plan communication and education can provide people with the financial knowledge needed to understand their employee benefits, make better financial decisions, and achieve better outcomes.

Given that the most successful plan communications make use of many channels from print to external websites, online tools, social media, and creative marketing, the Council highlighted best practices that balance personalized, targeted content to help employees evaluate benefit offerings with cost efficiency. They highlighted specific techniques and communication practices that have been statistically proven to be effective in increasing the involvement of employees in saving for retirement. The following are 9 recommendations:

  1. Communications tailored to particular segments drive results
  2. One-on-one or small group meetings increase participation
  3. Immediate “on the spot” communication is most effective
  4. Short, simple and focused communication drives participant response
  5. Multiple “touches” with various creative formats increase participation
  6. Increased technology use is effective and cost efficient
  7. Behavioral economics and “social norming” can increase participant involvement and savings
  8. Incentives given by sponsors and “gamification” help trigger participant involvement
  9. Responsive marketing principles may assist plan sponsors in improving communications

Here is a brief synopsis of these 9 practical recommendations and some best practices:

1. Communications Tailored to Particular Segments 

tailored-skill-development-imageThe Council found that communications that target participants based on their interests, background, and/or economic status were more successful than the “one size fits all” approach.

Understanding the culture and background of the workforce being targeted is key. For instance, since Hispanics will soon constitute one-third of the US population, Council member Donna MacFarland of Lincoln Financial Group stated that in her experience education materials typically are translated from English to Spanish, whereas she recommended that sponsors design the material using the reverse approach, developing  materials first in Spanish to address specific cultural needs and language differences.

Human Resource professionals also have found that allowing employees to map out an action plan rooted in realistic scenarios is an extremely effective tool. Some plan sponsors have successfully used a “three-pronged” approach to reach out to their participants by combining simple income replacement projections, behavioral finance strategies and a personalized message. For example, JP Morgan developed 36 different personas based on three age groups (younger than age 30, age 30-50 and older than 50). The firm also targeted participants based upon their regional median income (e.g., Kansas’ median income is $30,000 while in New York City it is $70,000). The basis for this approach was to enable these groups to compare themselves against their peers and take the appropriate action toward saving for retirement.

By narrowly tailoring their target audience on behalf of the plan sponsors that retained them, JP Morgan subsequently monitored whether employees opened their email communications and took action toward saving for retirement. If the individual took action, that person was considered “active,” while someone who opened the email but did not take action was considered “interested.” Based upon the action taken by the individual, the participant received specifically targeted information. This technique resulted in three to four times the response rate of participants who were not targeted.

However, some witnesses advised that there is a general concern regarding the use of targeted communications because complex data collection may provide gender or ethnic identification. Thus, there is concern over whether specific segments identified based upon race or gender could raise discrimination or deferential treatment issues. The Council heard testimony from Donna MacFarland of Lincoln Financial and Thomas Ryan of Fidelity that the use of particularly sensitive demographic information causes concern among plan sponsors. There are also practical concerns about housing information technology. Nevertheless, the overwhelming opinion received during testimony was that targeted communications work.

Branding helps targeting through the use of communications that include a unique positive image that is the group can relate to.

Here are some best practices of participant-centric communication methods:

  • Best Practice 1 – The Power of Example: Trustees of the Elevator Constructors 401(k) Plan used materials featuring the story of three employees who made different savings decisions during their careers. The narrative of the three employees was used throughout one-on-one sessions with printed materials to demonstrate how a 401(k) contribution would benefit participants in a variety of circumstances including temporary layoffs, hardships and early retirement. As a result, plan participation rates increased from 26.56 percent to 29.82 percent in 2011. The plan also experienced an 85 percent increase in plan activity from meeting attendees.
  • Best Practice 2 – Employer/Employee-Centric Content: M.A. Mortenson Company, an international construction firm, employed construction-related themes in its financial education to engage participants and foster pride in the company. Financial education was made mandatory and workshops were divided by career stage, age, and gender. The plan sponsor focused on participants’ preferences by surveying them after the workshop and making recommendations based on their feedback to yield desired results.
  • Best Practice 3 – Bilingual: Consolidated Citrus Limited Partners wanted to 1) increase attendance at plan educational meetings, 2) increase plan participation, 3) increase deferral rates and 4 encourage participants to maximize their match. Ninety percent of the workers spoke only Spanish, and the majority of their day was spent in the orange groves. An in-language campaign was initiated. The company’s Spanish speaking leaders met with small groups in the orange groves. Straightforward collateral in both Spanish and English Collateral were available on site, including announcement posters. By bringing the meetings to the employees, 95 percent of the targeted group attended the meetings. Plan participation increased from 40 percent to 75 percent and deferrals expanded from 4 percent to 8 percent.
  • Best Practice 4 – Branding: The Animation Guild 401(k) Plan was implemented for artists working at Southern California animation studios. The sponsors worked with the Guild’s representatives to obtain insights and develop a branded communication urging participants to remember to enroll. The response rate increased over eight percent from the previous year, with 135 new enrollees. Another employer cited in the research increased participation by 30 percent by keeping the message fun, simple and “cool” to target younger workers.
  • Best Practice 5 – Multicultural: The Four Seasons 401(k) Plan needed to convey an important plan change to an employer profit sharing employer matching contribution. The sponsor obtained feedback from bilingual meeting presenters in designing the campaign, and provided materials tailored to Hispanics and presentations also were created in Spanish designed to be culturally and linguistically accurate. As a result, the average deferral rate of the targeted group rose from 2.9 percent to 5 percent, and significantly increased beneficiary designations.

2. One-on-One or Small Group Meetings 

OneonOneAfter a study by Lincoln Financial found that 66% of participants prefer one-on-one guidance, Lincoln made it a component of its financial education model. They found that the need for individualized information is particularly acute for groups with low participation rates, including women and minorities.  Various studies have shown good enrollment and contribution results when employees request in-person group workshops facilitated by financial experts.

  • Best Practice for One-on-One Meetings:In 2012, MassMutual representatives spoke with 150,000 employees in face-to-face meetings. Forty-six percent of these individuals took action to improve their retirement readiness and, in one-on-one meetings, 75 percent of employees took action.
  • Best Practice for Small Group Meetings: Costs and timing may prevent plan sponsors from providing one-on-one meetings, but small group meetings and audience segmentation have also been successful. The FINRA funded Nurses Investor Education Project had small group meetings for well-educated nurses interested in taking action toward their retirement. They found that generally, the nurses’ lack of basic knowledge, or their perception that they did not know enough to attend these sessions, prevented them from attending their plan sponsor’s meetings. As a result of using small group meetings as a forum, the nurses perceptions changed and attendance at their employer’s retirement plan sessions improved.

3. Immediate “on the spot” Communication 

onthespotThe ability for participants to take action at the time they are thinking about retirement savings is more effective in increasing enrollment. For example, having computers in the room at the time employees are learning about the plan would allow them to sign up and take immediate action.

  • Best Practice: A US Army mandatory financial management course found that providing the enrollment forms for the Thrift Savings Plan during the financial management course resulted in a sizeable increase in participation, with soldiers signing up for the Plan before leaving the classroom.

4. Short, Simple, Focused Communication 

focusedBehavioral studies show that the most effective communications use simple, straightforward language specific to a participant’s personal situation.

  • Best Practice: Time constraints mean that any impediments to action should be identified and mitigated. For example, on a website, any extra step, such as the need to retrieve a PIN, may prevent employees from taking action. Solutions include sending the PIN directly to their email account or a mobile number, or mailing a postcard with the website’s uniform resource locator (URL).

5. Multiple Touches With Various Creative Formats 

profileConsistent, continuous and on-going meaningful communication can be achieved by repeatedly sending out simplified mailings. Social media can help alleviate the cost of additional touch points, and yet, few companies use social media channels for retirement information.

  • Best Practice: The Council’s Professor Madrian cites a company in which the third mailing of a simplified reply form requiring the checking of a box to enroll doubled enrollment from 22 percent to 45 percent of non-participating employees.

6. Cost Effective Technology 

advancement-of-technologyEvery demographic group is now using the Internet as a preferred source of information, via home computer or mobile devices. In addition, electronic media provides the ability to track responses, which is unavailable when the communication is sent through printed materials and regular mail. Another cost effective technological advance is Dynamic Page Publishing,  reviewed at the conclusion of this article.

A Deloitte study in 2012 that found:

  • 93 percent of Americans place Internet access as the most valued household subscription;
  • 54 percent of Americans own smartphones, and the rate is increasing 29 percent annually.
  • One of three Americans over age 50 has downloaded an application to a smartphone, and 28 percent access their bank accounts via smartphone.

Engaging Millennials: Electronic media is the most effective method of communication to engage younger generations in retirement planning, including Generation X (born between 1965 and 1979).  In order to combat inertia caused by competing financial priorities, such as student loan debt, it is important for this group to be engaged through “YouTube” videos, Facebook forums, Twitter, email and mobile delivery, including providing “one click” transactions and incorporating elements of “gamification.”   Millennials also demand simple, personalized, and action-oriented communications, and prefer human contact for complex tasks.

  • Best Practice – Email: Thomas Ryan of Fidelity Investments testified to the Council that Fidelity makes all channels of communication accessible, and finds that email communications have generated higher response rates than direct mail.
  • Best Practices for Engaging Millennials – Fidelity: Fidelity has studied the preferences of Generation Y, or “Millennials”  for using electronic communication, and found that this group tends to rely heavily on the Internet to interact with representatives from Fidelity, although they appear to be the least engaged when it comes to the frequency of contact. Millennials serviced by Fidelity have the lowest 401(k) participation rate, at 58 percent, compared to 67 percent for all other populations. Design changes made to simplify online interaction with Millennials resulted in a 40 percent increase in web utilization by this group.
  • Best Practices for Engaging Millennials – Putnam: Lori Lucas of Callan Associates discussed Putnam’s roll out of a plan primarily for Millennials that encouraged participants to bring their tablets to an nteractive meeting to log on to the benefits website. As a result, 40 percent of attendees increased their deferrals within 90 days after attending the meeting.
  • Best Practices for Engaging Millennials – MassMutual:: Offering enrollment and savings increases using iPod Touch devices in group meetings resulted in action rates of 85 – 90 percent among those attending. The use of targeted and tested mail and email campaigns resulted in $150 million in new deposits over three years and a 3.9 percent increase in action rates.

7. Behavioral Economics and “Social Norming” 

choiceThe way certain information is presented can have a resounding impact, including the way choices are presented to the participant, a method referred to as “anchoring”

Presenting options in a different order or with a higher default percentage has increased deferral rates. While communications traditionally list contribution percentages in ascending order from one to five percent, studies have shown that reversing this order so that the first option shown is five percent markedly increases enrollment in the five percent option. This method is referred to as “placement.”

 “Social Norming” reflects the fact that people tend to benchmark themselves against their peers. Statistics from the Bureau of Labor Statistics show that participants tacitly compete against peers in similar socioeconomic conditions.

8. Incentives and “Gamification” 

carrotThe use of games (gamification) is an effective tool in reaching  individuals who may not be easily engaged in retirement decisions (“non-savers”). Gamification can be used to reward people if they engage in the correct behaviors. Plan sponsors may also use incentives to provide rewards to participants with who exceed a certain benchmark contribution amount. Other techniques include raffles.

  • Best Practice 1: The NFL’s “Play 60” campaign  incorporates the use of the NFL brand to incentivize children to play a game for at least 60 minutes a day.
  • Best Practice 2: A rug manufacturer in northern Georgia had a series of meetings for people working multiple shifts, giving away lottery tickets to encourage attendance, and experienced standing room only for the meetings.

9. Six Marketing Principles Improve Communications

Communications that are uninspiring and difficult to undmarketing-300x200erstand leave employees confused, bored and unmotivated. The communicator’s “curse of knowledge” is a bias in which the communicator’s knowledgeability makes it difficult to demonstrate it from the perspective of lesser-informed people. The Council highlighted six principles of communication that plan sponsors should consider when drafting documents or presenting to their participants that will inspire action:

1. Show Empathy

empathyTo  determine the relevance of a message to an audience, it is necessary to engage them and ask questions that the content of the presentation or the communication should then be tailored to answer. For example, an energy company developed a program to help consumers understand and lower their energy bills, using this computerized question:

Can I help you with your bill?

  1. Yes, help me understand my bill.
  2. Help me save money.
  3. Both of the Above.
  4. I’m Here for Something Else.

By showing empathy to what the consumer cared about and giving information and tips to help them feel more in control, these questions presented helped raise consumer satisfaction.

2. Use Metaphors and Analogies

analogCommunications also reference a metaphor or visual picture to help the recipient relate to the message. For example, when Ridley Scott presented the screenplay for Alien to his producers he used the popular movie Jaws as a reference, and the metaphor “it’s like Jaws in space,” to frame a concept that the producers easily understood

3. Use Storytelling

icon-storytellingPeople tend to forget facts that are presented but usually remember a story. Stories are easy to absorb when people are overwhelmed with information. They also eliminate extraneous facts to capture the recipient’s interest and relate to him on an emotional level.

4. Use a Conversational Voice

conversationalUsing overly technical information, compliance or legal jargon can loose an audience. For example, it is difficult to convey the benefit of voluntary life insurance individual and spouse buy-up options in which election of coverage for a spouse can equal up to half an individual’s buy-up,  depending on the desired level of coverage. An effective way of communicating this is as follows:

“The company is going to buy life insurance for you. If you want, you can buy extra life insurance. Whatever extra life insurance you buy for yourself, you can also buy up to half that amount for your spouse. Now, depending on how much additional insurance you’d like, one or both of you may need to answer some questions about your health to see if you qualify for it.”

5. Surprise the Recipient

boxing-glove-surpriseUnexpected methods of engaging the recipient get the individual’s attention when a subject is ordinarily challenging and abstract. The use of humor, as shown below, can be considered an example.

6. Use Humor

humorUsing a little humor in the message will keep the audience engaged and make the message easier for audiences to relate to.

 

Plan Design Considerationsicon-design

Automatic Enrollment

A study by Brigitte Madrian and Dennis Shea shows that automatic enrollment increases average participation rates from 65 percent to 85 percent. It is particularly helpful for low-income workers with annual wages under $20,000, where participation increased from 27 percent to 82 percent. Average participation for employees under age 30 doubled from 41 percent to 82 percent, and the best improvements have been among the segments that had the lowest participation rates.  This was corroborated in as presented in the testimony of Lori Lucas.

Mandatory Contributions and Automatic Escalation

Defaults that are too low can  impact workers who would otherwise have contributed more. Since studies have shown higher default contribution rates have not increased opt-out rates, employers should consider recommending higher default contribution rates.

One solution is a stretch match (increasing the maximum amount of pay that can be matched and decreasing the percent matched, to keep the employer’s costs flat.

Another way to increase savings is automatic escalation in which sponsors automatically increase a worker’s contribution rate by one to two percent  of salary at each pay anniversary until a cap, such as 12 percent of pay.

Best Practice – TIAA-CREF: David Richardson of TIAA-CREF found that 403(b) plans typically have much higher contribution rates, ranging from 10 percent to 15 percent of pay compared to 5 percent to 7percent for all 401(k) plans, due to mandatory contributions from both employers and employees as a requirement of employment.  The 403(b) plans TIAA-CREF administers experience much higher annuitization rates — 40 percent compared to 4 percent for all 401(k) plans.

 Conclusions and Implications

red pencilThe Council found that continuous, simplified, personalized communication using multiple channels, connected with humor and empathy, are effective ways to communicate with plan participants to encourage participant engagement.

Benefit Program Marketers seeking to increase employee plan participation need to be more flexible, customizable and responsive than ever to introduce, present, promote and clarify the particular offerings and choices the employer has agreed to sponsor. Dynamic Publishing platforms are becoming a key tool in executing this strategy DPP is a way of designing publications in which layout templates are created which can contain different content in different publications. In cases where the same content is being used in multiple layouts, the same layout is being used for several different sets of content, or both, dynamic page publishing can offer significant advantages of efficiency over a traditional system of page-by-page design. Future articles will explore Dynamic Publishing in greater depth.

Related Blog Article:

Content Marketing vs. Traditional Advertising

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According to the Custom Content Council, in 2012, 68% of CMO’s will be increasing their budget for content marketing. While big and small companies alike are seeing the shift, smaller companies are devoting a higher percentage of allocated budgets toward content marketing:

  • 34% of a company’s advertising budget with ten or less employees goes toward content marketing.
  • 26% of the advertising budgets of companies with 1,000 or more employees is going to content marketing.

blurbThere are numerous reasons for this shift, and one of them is that technology has changed consumer behavior. Consumers today aggressively search out information about your industry online. According to Ryan Northover of Hatchd.com, before making a purchase decision, consumers now search out 10.4 sources of information vs. 5.3 back in 2010, when just 30% of consumers had Smartphones. This is rapidly changing the face of marketing and creating the necessity for content systems that engage, inspire, educate and inform information seeking consumers.

Here are 5 compelling reasons why you need a clear and robust content marketing strategy today, in comparison to traditional media advertising :

1. More Trusted 

A Nielsen survey of OECD consumers found:

  •  Only 10% said they trusted messages from display advertising.
  • However, 90%  said they trusted brand recommendations from friends or users they trusted online.

2. More Lead Conversions

Traditional advertising methods are generally directed to a broader audience, while content marketing’s  ‘narrowcasting’ strategy focuses on a smaller, core group of potential, high quality consumers. As a result:

  • Content marketing can convert 30% more organic traffic into high quality sales leads, according to MarketingSherpa (See case studies here)
  • Content marketing is aimed at high value customers who will return for more content.
  • Content marketing produces 3 times more leads per dollar than SEM and costs 30% less, according to Kapost & ELOQUA (ebook here)

3. Greater Influence Over Consumer Decision Making

A study by McKinsey Consulting shows that consumers are already well along in the sales process when they engage directly with a brand. Traditional advertising aiming for brand recognition may occur far too early in the sales process to make a difference at a critical juncture in the decision process. Additionally, heir search is more focused, targeted and active. According to a Roper Public Affairs study cited in Forbes:

  • 80% of business decision makers prefer to access company information via a series of articles over advertisements.
  • 70% of decision makers said content marketing made them feel closer to the brand.
  • 60% said content marketing helped them make better purchasing decisions.

4Enhanced SEO and Social Media Effectiveness

Search engines are steadily improving in delivering the right information to seekers of content. And as today’s search engines heavily weight relevance, social sharing and link buzz, the more engaging, shareable and targeted your content is, the better your SEO rankings will be.

Content is also the basis of social media strategy, because compelling content is what drives consumers to engage with your brand on social networks.

5. Greater ROI

Expensive paid advertising campaigns typically only run a few weeks. Content can last for a much longer time, which enhances your return on investment. Revisions in content marketing can keep it relevant even longer. Content marketing can also generate earned media because users and media outlets may share your content to many more users, potentially producing millions of dollars in free brand exposure.

“Content Is Queen”

Because good content marketing aims to help, inform, inspire and entertain a more skeptical, engaged and demanding audience, it is not experienced as a pressure pitch or disruptive. This is why major brands are heavily investing in content marketing. This helps brands capture mind share and position themselves as leaders in their category.

But if content is queen, it also demands to be treated as one. Content strategy requires many months of planning and strategic development to build the most effective content platforms, inventory and engagement streams.

Overcoming the Challenges

According to a Marketing Profs & Content Marketing Institute study in 2012, the top 5 reported challenges are:

  • Producing enough content: 29%
  • Producing the kind of content that engages: 18%
  • Lack of budget: 14%
  • Lack of buy-in / vison: 7%
  • Lack of knowledge, training, and resources: 6%

Overcoming these challenges requires ownership, consistency and measurement.

1. Ownership: Some committed organizations have appointed a Content Marketing Officer to drive these efforts and to be accountable for their success. As companies are slowly but surely becoming their own media, they will have to appoint an Editor in Chief responsible for overseeing this part of Marketing, and managing internal as well as outsourced resources.

2. Consistency: It takes consistent efforts to build a captive audience through the creation of  a body of content worthy of the attention of search engines and of your target audience. Understanding what content types and what channels create the most engagement and generate leads takes consistent effort and experimentation. Generating interest and engagement for your brand, products and services requires a commitment to sustained and continuous investment in producing various types of content on a regular basis. By way of illustration:

3. Measurement: Naturally, the defined success metrics (KPIs) will vary according to the market, media and product. However, the ROI of content marketing is generally defined not by generic Web activity metrics, but  by a sales conversion funnel.

A typical conversion funnel could look like:

Step 1: user lands on homepage
Step 2: user reads a blog post
Step 3: user reads a product or service page
Step 4: user fills in a contact form

Defining performance in terms of web activity such as overall visitors and pages views of a website won’t reflect performance as much as much as measuring how many users start at step 1 (arrive on a landing page)  and progress to step 4 (conversion).

Takeaways: As shown above, the realities of today’s markets demand that a very focused and robust content marketing effort is put in place for an organization to position themselves as a thought leader, differentiate themselves in a crowded market space, and  reach the buyer at the critical stage in the purchase decision process to make a difference and drive conversions. Since companies are struggling beneath the weight of the sustained effort needed to become thought leaders through content marketing, investment in dedicated resources is increasingly recognized as indispensable.

Related Post:

summary-leading-and-lagging-indicators
At least 40% of your measures must be leading indicators, or you will lose speed to change.
Lesson: Excessive focus on downstream measures (e.g., revenue and net income per employee) can take your eye off the ball.
Leading indicators, such as rational and emotional engagement, give leaders a glimpse into the future. If these indicators are high, it’s a good bet that people will overcome obstacles to deliver results and sustain value.
~ Michael Conforme, Country Manager, PI Korea

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Top 5 Challenges Marketers Face

Hubspot’s analysis of the top Challenges for B2B vs. B2C shows that the most common challenge across both segments is driving awareness and traffic, in other words, optimizing the top of the funnel to grow their reach. Here are the top challenges:

The top 10 challenges across both B2B and B2C companies are:

  1. Awareness/traffic (22.5%)
  2. Lead generation (16.2%)
  3. Social media (6.3%)
  4. Targeting (5.4%)
  5. Branding/brand recognition (4.5%)
  6. Converting leads to customers (3.6%)
  7. Keeping up with marketing trends (3.6%)
  8. Increasing/proving ROI (2.7%)
  9. Content creation (1.8%)
  10. Budget (1.8%)

The top 5 B2B marketing challenges are:

  1. Awareness/traffic (22.5%)
  2. Lead generation (16.2%)
  3. Social media (6.3%)
  4. Targeting (5.4%)
  5. Branding/brand recognition (4.5%)

The top 5 B2C marketing challenges are:

  1. Awareness/traffic (19.6%)
  2. Social media (17.9%)
  3. Targeting (10.7%)
  4. Budget (8%)
  5. Lead generation (8%)

The HubSpot Inbound Internet Marketing blog’s Sarah Goliger identifies 5 Major Challenges Marketers Face (And How to Solve Them). While we all face different challenges, there are some areas that any marketer can improve on. HubSpot’s quick 3-question quiz – “What’s Your Biggest Marketing Opportunity?”  can help you hone in on where you might best focus your efforts to improve the effectiveness of your marketing more effective.HubSpot’s analyzed their results to identify some of the most common challenges marketers have told them that they face, and suggests solutions.

1. Generating Awareness and Driving Traffic 

Challenge: To beging generating leads to convert into customers, you need to get your audience’s attention. This means generating a large enough volume of interested prospects by understanding which channels can get you the highest return.Solution: You first need to determine if you are using the right social networks where your natural audience is.  Some suggestions include using tools to “widen the top of your marketing funnel, such as:

2. Targeting Effectively 

 Challenge: Hubspot recommends that you identify your buyer personas. In other words, make a clear determination of who it is you should be marketing to:

Offer some sort of value to them (fulfill a need or desire – for instance, to learn or understand something about your industry or alleviate a problem that your product aims to solve.)

Make your message relevant to your audience.

Solution: Start by developing a detailed picture of your target audience, building buyer personas through a 3 step process:

  • Segment by demographics.
  • Identify their needs.
  • Develop behavior-based profiles.

Then determine what each buyer persona is looking for for and how you can provide value to that persona and tailor your content to make your message relevant to every individual lead.  Hubspot provides  and developed a  to help you research and create detailed buyer personas.

3. Using Social Media to Generate Customers and Revenue

Challenge: Increasingly, companies understand the business value in social media marketing. The problem is, they don’t know how to convert social engagement into dollars – the science of targeting, engaging, and nurturing a social following that can be a source of quality leads for conversion.Solution: Managing media marketing requires that you:

  • Recognize influencers.
  • Segment groups of users based on their social activity and interests.
  • Properly time and manage appropriate follow-up communication.

Social media lead intelligence about a lead’s behavior and interaction with your company in social networks will enable public facing representatives to have more meaningful and targeted conversations with specific, tailored information about that person’s activity. Personalized conversations based on information that is personally relevant to the customer lead to higher conversion rates.

4. Keeping Up With Marketing Trends and Strategies

Challenge: Marketing has increasingly shifted its focus from print media to online media, and social media is becoming a dominant platform for two-way communication and feedback collection. How can you keep up with new technologies, trends and strategies in this quickly changing environment?Solution: Effective marketing means investing in consumer research and ongoing marketing resources to know:

  • Where your audience is.
  • How to provide value to them.
  • What the best tools and methods are for doing so.

5. Proving ROI

Challenge: The proliferation of advanced analytics tools means that marketers are held to a higher standard. You must be able to measure the value of your efforts in terms of leads, customers, and revenue, tying every single lead, customer, and dollar back to the marketing initiative that created them.

Solution: Some suggestions Hubspot presents are as follows:

  • Closed-loop marketing cuts through the vagueness of marketing myths and assumptions and reveals real data about the results of your marketing efforts.
  • Advanced marketing analytics can track which marketing activities are generating leads, customers, and revenue.

Closed Loop Marketing means developing a loop of two-way messaging with customers. Done effectively, messages are pushed to the customer based on insights on customer preferences, or accessed in a self-service model. Data is gathered during the interaction leading to a cycle of continuous improvement. Enhanced knowledge about the customer and customer preferences allow you to refine the message or content to improve subsequent interactions.

In other words, it is about relationship building using data gleaned from customer interactions through various communication channels to support the continuous refining of relationships:

  • Selection of the channels and messages are driven by customer preference and receptivity.
  • This provides an improved customer database for refined segmentation by behavioral attributes.
  • Data about which content was presented, duration, frequency,which customers, feedback, responses to surveys, and click stream data, along with additional data sets such as sales, market share, sales growth provides you with the analytics to compare data sets for cause and effect in order to recommend corrections to the next approach.

In Closed Loop Marketing, when the insights gained during a customer interaction are used to make a change in the sales and marketing approach in order to improve a subsequent interaction, the loop is closed. Additionally, this intelligence can be extended to:

  • Multichannel Marketing – closed loop marketing with multiple interconnected channels.
  • Continuous Loop Marketing – allowing for improvements to happen on an ongoing basis, rather than one time only.

Marketing Models That No Longer Work

 of Newmediamarketing.com provides a list of 10 Marketing Principles That Aren’t True Anymore. His core observation is that mass marketing models no longer optimally address the new attitudes and behaviors of the socially connected consumer.  For instance, while TV drives awareness, it is increasingly the Internet that drives conversion.
Of the 10 marketing principles that Rich finds increasingly irrelevant, I will highlight those that I consider to be the top 3.  It is important to consider these consideration points in the context of your own product and marketing environment because principles that work best for one type of product marketing environment may not work as well in others.

3 Marketing Principles To Rethink

1. Mass Segmentation Models – The old mass segmentation models are giving way to micro-segmentation.  Here’s why:  because people have more in common with those they follow on social media than their demographic peers, and because everything happens in real time online. Consequently:

…it’s more a relevant message to a relevant audience at a relevant time.

Customer segmentation is the practice of dividing customers into groups relevant to a particular line of business in order to decide how to relate to customers in each segment. The goal is to maximize the value of each customer to the business.

Micro-segmentation groups small numbers of customers into more precise segments, based on factors, including behavioral predictions in order to direct specific marketing actions to each micro-segment. The goal is to maximize the effectiveness of every contact with each customer.

The Process: For example, customers of an online gaming company might be segmented into Lifestyle Stage Groups, such as: 1) fun; 2) new; 3) active; 3) star; 4) churn; and 5) reengaged. Deeper dives into each Lifestyle Stage Group can be made by segmenting these customers into Segmentation Layers, using cluster analysis on sets of attributes that share a common context, including behavioral and demographic. By associating each customer with a string of different clusters, customers are then grouped together as micro-segments.

Intended Results: Micro-segments, which typically contain very few customers each, allows for highly personalized predictive analysis and marketing action optimization.   Tracking and analyzing how different marketing actions affect the spending behavior of different micro-segments makes it possible to predict the effectiveness levels of different marketing actions on different segments. As a result, marketers can better determine which marketing approaches will have greater impact on each group of customers. Further, since the micro-segments are dynamic, and there is movement through the Lifestyle Stages, dynamism of the customer path can be factored into the analysis. As explained by micro-segmentation company, Micromove:

Most companies  view segmentation as a method of clustering similar customers together at a given point in time, but they completely disregard the path or route that each customer has taken to reach his or her present segment. By analyzing customers based on their movement among segments over time, [micro-segmentation] achieves far more accurate segmentation than any other known method.

Focus on Customer Lifetime Value in segmentation allows for better targeted marketing based on more precise predictive customer behavior models.

2. The Purchase Funnel (Reach and Frequency)

For products where the purchase process is more complex, building awareness through reach and frequency is only a first step. In line with the Consumer Decision Journey as defined by McKinsey, to improve conversion, you need to rethink the “purchase funnel” in favor of a more complex consumer decision model.

My article, The Customer Decision Journey: Research Overturns the Marketing Funnel shows that the old consideration funnel has given way to a decision loop (“the consumer decision journey”) that takes place in a less linear and more complicated purchase environment where there are numerous touch points and key buying factors resulting from the explosion of product choices and digital channels, coupled with the emergence of an increasingly discerning, well-informed consumer. 

consumer decision journey

McKinsey’s David Court has a presentation showing what this means for marketers. He explains:

You have a trigger of some sort, where people start across the decision journey — they are now going to move towards purchase. The first stage is initial consideration. In many industries, people actually start in their initial consideration of a brand with a relatively narrow list, we believe because of the busy lives and bombardment of media — it’s just very difficult to get through all this clutter in this consumers initial consideration set. However, once the consumer decides they are going to buy a product, they move into a stage that we call active evaluation. It is here that the number of brands they are considering increases. Which is exactly the opposite of the premise of the funnel, going from broad to narrow. This is the stage when the consumer is intent on purchasing and they are actively researching the product.

3. Acquisition Only

Your business model will naturally continue to depend on new customer acquisition goals, but not exclusively. Marketing models based on new customer acquisition alone that do not also have strategies for retention and engagement break down over time, and the reason that pyramid schemes ultimately collapse is that there are a limited number of new customers to be sold.

Brand loyalty is important because brand enthusiasts will reengage and repurchase, and influence others to whom (s)he is socially connected to purchase and engage. So it’s vitally important today to keep the customers you have happy by delivering on all brand touch points, and creating a social context for them to become brand ambassadors.

Apple is the oft-cited example of a company whose brand loyalty-oriented model has been extremely successful. While not the PC market share leader, Apple has leapfrogged other PC makers in profitability because their customers are willing to pay more for a better brand experience. 

Lessons For Marketers In The Age of Socially Driven Conversion

Strategy: Traditional messaging is geared toward trying to get into the consumer’s initial consideration stet. However, rather than continue to push ads and promotions out to broad groups of consumers, marketers need to be sure that their marketing activities are aligned against how their consumers research and buy products.

Consider the likely results if the customer reaches out during the active evaluation stage but is not provided the facts and testimonials that (s)he is looking for to make the purchase decision. The budget spent on gaining recognition and getting into a customer’s initial considerations set will not only fail to result in conversion, but will effectively deliver the client to a competitor who delivers on the customer’s pre-purchase expectations.

In essence, this means that the customer has moved past a brand’s promise to a brand’s value in the consideration phase.  So marketers have to bridge the gap between consideration and conversion sooner by developing ways for people to talk about your product, and making word of mouth work in the age of socially driven conversion.

Social engagement doesn’t mean that, as Rich Meyer puts it, consumers necessarily “want to have a relationship with their salad dressing or butter…You also need to think more about your brand as media than just providing sales information online.”

In other words, since the joy of the purchase itself is often more than that derived from the product itself, what value are you delivering in the customer’s purchase experience? You need to emotionally connect to your customers and give them an emotional reason to select your brand.  The choices consumers make are not rational ones.

Tactics: Tactics include being represented on independent internet sites where people go and research and buy products. If you don’t have enough presence on those types of consumer driven approaches, when the consumer is reaching out during active evaluation, you’re not there for them to find.

Rich Meyer summarizes the customer-centric approach in the age of socially-driven conversion extremely well:

I believe the greatest strength any marketer can have is his, or her, ability to understand the dynamics of their brand/product from a consumers POV.  This means understanding what are the key drivers to conversion and where and when consumers want to interact with the brand.  I love Oreo cookies but I don’t want to friend them on Facebook.   Organizations that prepare for change and implement new marketing thinking will be ready to leverage new business and customers.

Ready, Fire, Aim?

Build it and they will come? If that were true, Marketers would be out of a job, wouldn’t they?
Rob Adams, senior lecturer at the business school at The University of Texas at Austin, and director of Texas Venture Labs, agrees. He should know. He is a leading voice on market validation who authored a book titled If You Build It, Will They Come? Three Steps to Test and Validate Any Market Opportunity.  A former software executive, entrepreneur and fund manager, he has founded or financed more than 40 companies that have launched more than 100 products with transactions exceeding one billion dollars of capital. The book is a quick read with insights and best practices gleaned from his own experiences. His core proposition:
Companies can improve their performance by moving from the common Ready, Fire Aim approach to a Ready, Aim, Fire approach.

Ready, Aim, Fire

To give yourself a better chance of avoiding the 90 percent failure rate of most new product startups, move “aim” – market validation, that is, – up to the front. Rob’s recommendation?
Invest 10% of your product development budget up front to make sure the remaining money is spent right.

Case Study: Using a formula given in the book, Rob Adams provides an example that he has implemented to launch a startup marketing campaign. For the sake of simplification, the figures have been rounded.

  • $1 million: Initial budget.
  • $500,000: Allocated to product development.
  • $500,000: Allocated to launch, sales and marketing.
  • $50,000: (10% percent of $500K) Spent over an intense 60 days of market validation before product design even begins.

Why: The Case for Investing in Up Front Validation

What is the rationale for such a large expenditure on validation?

I would rather have my name on a $25,000 hole in the ground than a $1 million hole in the ground.

1. Wasted Resources: In an article in Inc., Rob points out that more than 65% of new products fail, for a total loss of $260 billion a year in the U.S. alone. With start-ups, the failure rate jumps to 90% – numbers that have been constant over thirty years.

2. The Customer is the Key to Your Success: Products usually fail to generate enough revenue because they don’t sell well enough, and can’t generate enough revenue to cover their expenses. That means that customers either feel they’re not compelling enough, or not worth the value for the price. Startups typically can’t survive the failure of a company’s first product.  The failure of a new product in an established business can risk the company’s stability, depending on:

  • the strength of other revenue streams.
  • How many resources were lost on the failed product.

And Rob is quick to point out that, while investors or a parent company might cover shortfalls for a while, the offering must eventually generate returns that justify the capital and the risk that went into creating, marketing, and selling it, or the company will tend to fail.

3. Leapfrogging the Competition Puts You At the Leading Edge: Another important reason for Market Validation is to leapfrog the competition. Innovation tends to follow a fixed path, with one big idea begetting another, and so on. That linear approach to innovation doesn’t always get companies ahead of competitors, especially in the digital age. Consumers often learn that as soon as they buy the latest technology, the next big thing quickly emerges, making their purchase obsolete. Businesses often learn the same difficult lesson as they bring products and services to market, only to be trumped by companies with more sophisticated offers and deeper pockets. Companies have to continually innovate in an unending, linear cycle just to keep up. Companies that leapfrog the competition have an opportunity to change the game.

Case Study – Apple: Apple’s reinvention of the computer from a business to personal asset created a game-changing new industry, as did their reinvention of the mobile phone from a telephonic device to a mobile computing platform. More recently, while traditional laptop vendors focused on the technology- adding more speed, more memory, bigger screen size- Apple focused on how people use the technology, and made innovations on adding battery life, ease of use, and quick Web connectivity, and making their machines virtually bullet proof against virus. The result: unless Apple severely stumbles, their customers are committed and wouldn’t consider another vendor. Until other laptop manufacturers can make a compelling case, Apple has the corner on this market. Rather than trying to compete on price or technology, Apple discovered a way to leapfrog competitors on customer focus. The compelling case for Apple isn’t based on either technology or  price – Apple is the most expensive in the market for comparable performance. For Apple’s market, price isn’t the deciding factor. Yet, without Market Validation, opportunities like these may not be recognized.

What: Market Validation: Real-Win-Worth Analysis

Market Validation is performed to probe, test, and validate a market opportunity before you invest  large sums of money into product development. Whether you are designing, building, or selling products, whether you’re in a large corporation or a tiny start-up, whether your business is service- or product-based, Market Validation will significantly increase the likelihood your product will succeed in the market.

Developing a Real-Win-Worth Methodology: Using a Real-Win-Worth strategy of market validation (Is It Real? Can We Win? Is It Worth Doing?) has helped me to launch products to bypass the market share of major competitors. Real-Win-Worth was developed by by George S. Day, a Geoffrey T. Boisi Professor of Marketing and a codirector of the Mack Center for Technological Innovation at Wharton as a strategy tool  for “undertaking a systematic, disciplined review of your innovation portfolios and increasing the number of major innovations at an acceptable level of risk.”

To do this, Day recommends two tools that can increase the proportion of major innovations in your portfolio while carefully managing their risks:

  • risk matrix enables you to estimate each project’s probability of success or failure based on how big a stretch it is for your firm. The less familiar the intended market and the product or technology, the higher the risk.The R-W-W (“real,” “win,” “worth it”) screen helps you evaluate projects’ feasibility. The first step in using this tool–asking “Is it real” questions–helps you determine whether customers want your innovation and, if so, whether you can build it.

6 Questions to Ask Yourself

To evaluate the risks and potential of an individual project, you should be able to answer and score these three fundamental questions about the market opportunity: Is It Real? Can We Win? Is It Worth Doing?  To do so, ask these six fundamental questions:

  1. Is the market real? Explore customers’ needs, their willingness to buy, and the size of the potential market.
  2. Is the product real? Evaluate the feasibility of producing the innovation.
  3. Can the product be competitive? Determine whether the product can compete in the marketplace.
  4. Can our company be competitive? Investigate how well suited the company’s resources and management are to compete in the marketplace with the product.
  5. Will the product be profitable at an acceptable risk? Explore the financial analysis needed to assess an innovation’s commercial viability.
  6. Does launching the product make strategic sense? Determine whether the project fits with company strategy and whether management can support it.

How: Using the Risk Matrix

Assemble a team to assess each innovation project’s potential risk using these criteria:

  • How closely target customers’ behavior will match current customers’
  • How relevant the company’s brand is to the intended market
  • How applicable your capabilities are to the new product

Worst Practice Study: McDonald’s once started offering pizza, assuming that the new product was closely adjacent to existing ones, and targeting its usual customers. The problem is that it violated McDonald’s service-delivery model: employees couldn’t make and serve a pizza within 30 seconds, and the project failed.

How: Using the R-W-W Screen

This tool is used to repeatedly test each project’s viability throughout a product’s development. The R-W-W screen exposes faulty assumptions, knowledge gaps, sources of risk, and problems suggesting termination.  To use it, you need to develop a set of criteria such as the following:

Best Practices Study:
The Background: I served as Director of Marketing for a financial services company that was a major competitor in the Variable Annuity marketplace, which is one marked by keen competition and slim margins. This company was typically a late follower rather than an early entrant, and often found itself in the defensive position of competing on product features and cost, which placed great pressures on product profit margins.
The Opportunity: I identified an unserved niche market – people on the cusp of retirement. The problem is that annuitants who wanted to tap the cash in their contracts were subject to surrender charges (CDSC – Contingent Deferred Sales Charge) for the first 7 contract years or more. While this type of annuity was an excellent tax-deferred savings and accumulation vehicle for those saving for future retirement, there was no product appropriate for consumers in their 60s who were either just about to retire or recently retired and might need more immediate access to their contract funds.
The Organizational Challenge: The challenge was to move the organization from the late follower mentality to first-to-market to develop a new product solution that would place the company in a position of leadership and surpass the competitor’s market share.
The Process:  I needed to change the mindset of the organization through a process people could buy into. To do this, I needed to get buy-in across disciplines by identifying easy wins that would have impacts early on. Using a R-W-W template, I looked at behaviors and needs in the marketplace, and verified the need – a segment that was unserved.
  • Real? I performed product concept testing among mid size financial planners and confirmed that it was a viable concept up front – before asking the company to put resources into development.   I developed a recommendation for a 3-year  contingent deferred sales charge product that would serve people on the cusp of retirement who had until then no product for their needs.
  • Win? Rather than develop individual products to serve segments where Manulife had no channel presence, we confirmed that there was a viable market and perceived need among mid size financial planners for this product.
  • Worth? We determined internally that such a product was actuarially feasible and would be a good fit for the company’s sales model. It would not cannibalize existing products, for example.

Result:  The company, which had not typically been a first-to-market company, was first to market with this product. Sales goals were exceeded profitably, and we usurped the leading competitor’s market share.

The R-W-W methodology enabled us to leapfrog the competition. In this age, companies have to continually innovate in an unending, linear cycle just to keep up. Market Validation can help you  uncover new opportunities to leapfrog the competition into positions of market dominance.

What Marketers Need to Know From 4 Experts

How affiliate marketing works for online offerings

  discusses Affiliate Marketing, in ClickZ. What is it, and why might it be of value to you?

Affiliate Marketing Defined:

Cohen  defines it as follows:

Affiliate marketing is about building and maintaining relationships between affiliates, retailers, and networks. It’s at the heart of selling. This explains why Affiliate Summits sell out.

Should you add it to your marketing mix? Why not ask the experts? Heidi  interviews 4 experts below. I’ve highlighted important takeaways in red.

1. How do you define affiliate marketing?

  • Dan Chiss: Affiliate marketing is a performance-based online marketing channel that rewards publishers for driving conversions for advertisers.
  • Shawn Collins: Affiliate marketing is simply online commission-based sales and lead generation. For instance, if somebody made a fan site for the latest hit movie, they could include links to merchandise and tickets. When visitors click the ads and buy, the site that referred those sales will earn a commission.
  • Murray Newlands: Affiliate marketing is where one entity drives a prospect to another entity in return for a reward. The traditional way of thinking about affiliate marketing was the owner of a book club website recommended the next month’s book and put up a link to Amazon. If people bought the book, Amazon would reward the book club owner. Now there are many more variations on this approach. While site owners are still paid for sales, they’re also compensated for leads, clicks to sites, traffic which goes to sites and leaves them (paid on the outkick), to mobile app installations and even in-store coupons.
  • Adam Weiss: Affiliate marketing is the performance-based segment of the online advertising industry. It offers advertisers the ability to generate sales, leads, or any action on a rev share or CPA basis. These actions are driven by highly targeted distribution partners that offer advertisers a unique value proposition driving increased revenue for all parties.

2. What’s the value proposition for marketers to use affiliate marketing?

  • Dan Chiss: Affiliate marketing can be a cost-effective, low-risk marketing channel that is uniquely suited for zeroing in on conversions, but also plays an important role in influencing consumers at each phase of the purchase cycle. It empowers advertisers to increase the mileage of their marketing efforts, while publishers are rewarded for driving conversions.
  • Shawn Collins: Affiliate marketing enables people to monetize their sites, email lists, etc. with relevant advertising. It’s a process that requires frequent testing and optimization, and affiliate success varies from a couple dollars a month to supporting themselves, and even powering entire companies in some instances.
  • Murray Newlands: You’re able to tap into a marketplace of marketing ninjas who can help merchandise your products. Ninjas can be good and bad. Know with whom you’re working and how to manage them. Further, as an adviser to VigLink, one of many affiliate channels, I’ve seen them enable advertisers to expand their reach and make sales through billions of pages of content they’d never be able to get traffic from otherwise.
  • Adam Weiss: The research Rakuten LinkShare did in conjunction with Forrester showed that consumers prefer visiting sites that focus on aggregation and curation of multiple advertisers and/or products. These are the types of sites that an affiliate network will provide to a marketer. Further, we found that these types of sites drive new customers to advertisers, help customers make a final decision when there is purchase intent, and also drive users who tend to spend more money to advertiser sites.

3. How would you persuade a marketer who believes that affiliate marketing cannibalizes his existing sales?

  • Dan Chiss: Marketers should focus on data and try to understand the full picture of their customers’ journeys.Before your customers buy or convert, they may see many different parts of your online marketing campaign – including paid and organic search, email, affiliate marketing, display ads, mobile placements, and more. Each of these elements has an impact on the results you see. Marketing attribution modeling can help you can assign value to all of the factors that contributed to a sale, and make better decisions about where to invest in the future.It’s also important to remember that testing is key to optimizing compensation to affiliate partners. Consider building affiliate programs that reward partners for the value that their referral provides to your business. For instance, some advertisers give more credit to affiliates that bring in new customers and provide awareness in the upper-funnel versus those that simply offer coupon codes to customers who are ready to purchase. Experiment to see what works best for your business.
  • Shawn Collins: When an advertiser has an affiliate program, it’s essential that the program is actively managed. The cases where an affiliate program can cannibalize the existing sales are when the program is on autopilot. For instance, if there is nobody to monitor whether affiliates are bidding on trademarks, a company could waste funds on commissions for what would likely have been organic sales.
  • Murray Newlands: Once you gain experienced with affiliate marketing, you’ll know which of your affiliates drive what type of traffic by which means. Then you select to work with those people who bring you new, incremental sales that don’t cannibalizing existing sales.
  • Adam Weiss: Affiliates are the ones who are continually innovating and on the cutting edge of ecommerce – building tools and technology that help shape how customers are shopping online and this can only support and augment a marketers current efforts. Customers are becoming increasingly savvy in how they shop online and use the web as a resource for e-commerce and we find increasing usage of affiliate sites as a way to make their final purchasing decision.

4. What kind of resources do marketers need to support their affiliate program?

  • Dan Chiss: Data! Explore all the available analytical tools and reporting your network provides, and constantly evaluate how your affiliate program is helping you meet your overarching business goals. Use free tools like Google Analytics to understand customer behavior and help you get your desired results. Always make sure that solid data supports any business decision that you make, whether that be reallocating budget, adjusting affiliate publisher payments, revising your cost-per-acquisition targets, or updating landing pages.
  • Shawn Collins: I’d recommend that any merchant/advertiser work with one of the bigger affiliate networks. It can be tempting at the onset to go with an off-the-shelf software, but affiliates prefer to work with a trusted third-party. Also, the affiliate networks are frequently evolving their tracking and reporting, while cheaper solutions are often static.
  • Murray Newlands: The obvious one is being on an affiliate network (Google, Commission Junction, ShareASale, or other network). Alternatively you can use your own affiliate tracking software such as Hassoffers, Cake Marketing, or LinkTrust. Next, you need time to manage recruiting and building relationships with your affiliates. To support this effort, you’ll need marketing assets including banners and email templates. Also, you’ll want the flexibility to change to your website as well as business model to make affiliate marketing effective for your company. This means management buy-in.
  • Adam Weiss: I’d say it depends on what you’re selling and what type of distribution you’re looking to reach. But at a high level, as previously mentioned, I think having a person or team to manage the relationships with your publishers is key. You want to ensure you are able to understand and leverage the full value of all the publishers in your program. You also want publishers to understand your brand and what you’re about as a marketer.There are also various tools and technologies out there that can make it easier for Publishers to work in your program. Rakuten LinkShare has spent a lot of resources building different tools making it easy for publishers to get links for their advertiser partners as well as to access reports in a streamlined fashion.

The Takeaways

  • Affiliate marketing is where one entity drives a prospect to another entity in return for a reward.
  • Affiliate marketers can enable advertisers to expand their reach and make sales through billions of pages of content they’d never be able to get traffic from otherwise.
  • Affiliates are the ones who are continually innovating and on the cutting edge of ecommerce – building tools and technology that help shape how customers are shopping online and this can only support and augment a marketers current efforts.
  • Marketers should  try to understand the full picture of their customers’ journeys. Marketing attribution modeling can help you can assign value to all of the factors that contributed to a sale, and make better decisions about where to invest in the future.
  • It’s essential that the program is actively managed  to avoid having an affiliate program cannibalize existing sales or wasting funds on commissions for what would likely have been organic sales.

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