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November 2010 archive

An Executives View: Managing an Internet Marketing Department

In 2007 we made the decision to start an Electronic Marketing department. It was a big discussion for the company. Throughout our history we were and still are a marketing company. We spent upwards of 20% of our revenue on marketing and 99% of it was spent on direct mail marketing, basically brochures and catalogs going out in the mail. We realized solid returns, and we still do.

As most marketers know, the biggest challenge with direct mail marketing is risk. You spend a significant amount of money upfront in the hopes of generating revenue 6+ weeks later. You make a mistake and you pay for it dearly. So, although it works and is VERY repeatable, scalable and measurable, it is risky and expensive. So the allure (siren song) of a less expensive way to generate leads and sales became too great and we jumped.

The first thing an executive must realize when starting an Internet Marketing Department is there is absolutely no way you can learn what you need to learn fast enough to be considered knowledgeable in this space. So you must go into the development of this team with more trust than you might normally. To mitigate your risks you may try the following start up strategies:

  1. Invest in the training and growth of a trusted marketing resource that is technically competent and very interested in Internet Marketing. This is a slower process, but will pay large dividends in the long run
  2. Select a trusted recruiter who knows your company’s culture and give them a very specific profile of what you are looking for. You want to make sure when recruiting that you are hiring integrity, as well as talent
  3. Do not try to start up a relationship with an agency without having a properly skilled resource in place. This personally burned me in 2006 to the tune of $12,000. An agency is NOT a silver bullet. They can conduct the work, but they need content and direction from you. If you do not know what you are doing, they can’t do their job. I think an agency can really help support your growth, but you must have an experienced and knowledgeable internal professional directing that agency before taking that step

Once you get your resource in place they need a budget to start testing. Realize that you will NOT see instant return from this testing process, but as with in anything in marketing, if you can capture the data you must test to learn. So during this process you have to continue to TRUST your resource. Remember you are not the expert in Internet Marketing, but you are the expert in your company, and hopefully in management skills. So your job is to provide this resource CONTENT and solid direction.

One of the key terms I learned to use with our Internet marketing team is ROT (Return on Time). Some Internet marketing tactics can be VERY time consuming. A good Internet marketing practitioner has to watch out for those time suck activities and keep them in balance with other activities that are quicker and more scalable and repeatable.

An example of this is the difference between work on twitter and work on email marketing. It is very quick and easy to start up an email marketing process and returns happen pretty quickly. Twitter, although easy to set up takes a lot of care and feeding to begin to generate conversations and conversions, but once you do generate traction those contacts are sticky. Both are just a part of an overall Internet marketing strategy but some practitioners get caught up in one or another and waste time.

There is a tendency with practitioners to focus initially and exclusively on the social media tools (like twitter) because they are fun, cool and different, and miss out on the quick initial returns of email marketing and PPC. A good executive will watch for this and help direct the team to diversify their time and strategy to manage their ROT (return on time) with a good mix of quick time on return but less sticky activities with long time on return but ultimately very sticky activities.

An executive starting up an Internet marketing team must suppress the typical executive tendency of leading like a dictator and must lead like a coach. A coach understands they can’t perform for the team. They don’t have the skills of the players. But a coach does understand they have experience and perspective the players do not, and a coach needs to use those tools to support and motivate the players.

In this model the executive turned Internet marketing team coach must pick out a trusted professional to lead the Internet marketing team, and provide this person with training and education to grow as a practitioner. They must allow their chosen ‘captain’ to make the agency decision, then provide the captain with a budget to begin testing and learning. From there the ‘coach’ needs to be patient and not expect instantaneous resources, but at the same time make sure the captain is looking at ROT (return on time) and keeping their efforts diversified.

If you take these initial steps from here you will move from a testing and learning budget to a production budget where you can begin tracking metrics and seeing strong returns. We have yet to prove that Internet marketing can replace the scale and repeat of direct mail marketing, but it does a tremendous job of adding high margin incremental revenue, which is a fantastic start.

So You Don’t Believe in Twitter…

As Scott Straten says…’What’s to believe in…it’s not a religion.’ That being said, I do see how many struggle to see the business application. I myself joined twitter around 2007, played around with it for a year or so, and then came to see the light.

The problem I had in those days was there weren’t any instructions. You create an account and have a clean slate. In those days there was no recommendations for users to follow, and resources explaining how the service worked were scarce.

What I needed was to see how it was being used by others in order to creatively find a way to make it work for my own applications. I think any marketer worth their salt does this on a daily basis. We analyze commercials, publications, mail pieces, and campaigns to see what we like and what we don’t. We take what we like, mix it with other things we like, and find a way to make it appeal to our needs.

So let’s take that same approach with twitter…

The following case studies will shows examples of how twitter is being used effectively for business applications. After giving them a look, analyze your business needs and goals, and take pieces of the cases you like and see if you can utilize twitter in a way to address those needs and goals.

And if nothing else…do a search for your business, your brand, and your top keywords on search.twitter.com. My guess is the conversations already occurring may at least make a plea for the case that ‘The conversation is already happening, don’t you want to be involved…or at least aware.’

  • Tying Revenue to Twitter: Back in 2009 we saw a flood of new business to twitter. It probably had something to do with Dell reporting $3 Million in revenue that it tied to twitter. By offering exclusive discounts/coupons and monitoring traffic from twitter that resulted in purchases, Dell was able to transform the social media tool into a solid revenue stream. At one point, the Dell Outlet was able to drive $1 Million in sales from customers who came through twitter during a 6-month period. You can read more about how Dell was able to tie revenue to twitter in this NY Times article.
  • Utilizing Twitter to Reduce Customer Service Call Expenses: Small businesses with customers active on twitter can easily reduce customer service call volume by monitoring mentions on Twitter. Now imagine someone like Microsoft, who we all know gets bashed online. Their Tweet Fleet (@XboxSupport) responded to over 5,000 questions in an average time of 2 minutes 42 seconds during one week in March. Imagine the amount of call volume that prevented, and their responses being public and searchable probably reduced things even further. Social Media Examiner did a great write-up on Microsoft Xbox Uses Twitter to Reduce Support Costs.
  • Build Brand Awareness, Grow Marketshare, & Create Loyalty through Twitter: Whether you are a huge billion dollar corporation or a newly formed startup, Twitter is a great tool for creating buzz and brand awareness. Take Kogi Korean BBQ and their fleet of food trucks that roam the city of LA. By effectively using Twitter, Kogi is able to gather 300-800 people with a single tweet. Knowing how to engage their customers on the social tool has helped that grow their presence on twitter from just announcements of their location into an active, almost rabid, community with cult-like characteristics. Check out this LA Times article about Kogi Korean BBQ and how they have used twitter to grow awareness, market share and loyalty.
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