Thursday, October 29, 2009

Top-of-Funnel Analysis - Net New Names, Inactive Leads, and Reactivated Interest

Analyzing marketing actions at the top of the funnel has some interesting nuances. This is a direct result of the fact that having a contact’s name within your marketing database does not in any way imply interest. You may have a name in your database that is from many years ago and has not shown interest in recent years, there may be names that were input as part of a list purchase, and have never shown interest. In looking at the top of the funnel, it is critical to be able to carve out these “inactive names” from the rest. Without that, the measurement of campaigns targeted at the top of the funnel, and also your overall funnel conversion metrics will be challenged.

The best way to account for this, is to have a rigorous process of eliminating inactive names from an “Interested” stage at the top of the funnel. If a lead, interested at one point, has made no inquiries, and taken no actions in a period of time, say 3 months, then that lead is placed back in the inactive lead pool.

Campaigns targeted at the top of the funnel then, can have three main effects:

- Generate Net New Names via Inquiries; a campaign that generates buzz in the market may generate net new names for your database that come in as active inquiries. For example, if a whitepaper is offered as the call to action for a campaign, and an individual who was not originally in the database downloads it, they are both a net new name and are now part of the “Interested” stage of the funnel

- Reactivate Inactive Names; a campaign may target Inactive Names in your marketing database, and by doing so cause some of them to re-engage. This is a very valuable transition as those are names that were otherwise not showing any interest in your organization.

- Acquire Inactive Names; A campaign that involves a list purchase or other name acquiring techniques may add names to your database, however these are not people who are showing any interest, and therefore must be deemed to be part of the Inactive Name pool until a campaign succeeds in interesting them

In measuring the effectiveness of your marketing campaigns at the top of the funnel, it’s crucial to separate these transitions. If not, highly successful campaigns that re-engage large portions of your existing, but inactive, marketing database will appear to be minimally successful due to not creating many net new names. Similarly, campaigns that involve an element of list purchase may appear more successful than they truly were as they create many net new names, even though only a small percentage of these individuals will engage with your communications.
Many of the topics on this blog are discussed in more detail in my book Digital Body Language
In my day job, I am with Eloqua, the marketing automation software used by the worlds best marketers
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Troy said...

I've also seen folks jump to conclusions about effectiveness based on too little data, or on a high-level summary.

We use Google Analytics and Trendly to track Cloudvox's conversions, and some incredibly useful visualizations (like GA's funnel viz) look easier to draw conclusions from than they really are.

There's no substitute for granular goals & conversion states, and for clue about what a chart *doesn't* measure.

julianng said...

I like your approach in segmenting out the three campaign types. The question is, how many email databases are ready for this type of analysis? Sure if you are using some sort of CRM or system like Eloqua, but smaller to medium sized companies may not have this luxury. It's not an excuse either, just a reality that we see across various SMB businesses who are trying to get this part of marketing right.

In any case, this approach is a direction that companies want to be moving towards - higher value engagement with their contacts. I can see how quickly campaign results can get muddy without the right segmentation. However, we would still rather a company error on sending the communications to an unsegmented email list vs. not sending. In this case the focus needs to be on good content until they can get their arms around improving the data quality.

Steven Woods said...

it's an interesting point on smaller organizations and what they are able to track. Tracking the expenditure of hard dollars is usually something that any size of organization gets good at quickly, but tracking the "expenditure" of the permission of the contacts in your database - that cost hard dollars to get in the first place - is often not as high of a priority.

That being said, there are a lot of smaller orgnizations that do it very well - I'm with Eloqua, and we work with many organizations down to just a few million in revenue. It comes down to the views and priorities of the marketer.

Thanks for the comment