Leads & Customer Acquisition

Leads & Customer Acquisition

Traditional marketing is hard for your advertiser to measure. They run ads in print, radio and TV and hope business increases as a result. They know they need an active mass-media presence, but how can they know it’s effective?

Especially in the digital frontier, the fundamental measure on the effectiveness of advertising is how many new customers you are attracting and how much those customers cost.

Here’s a tool you can use to help your clients. In the process, you become much more important as you help them sort through some important challenges:

  1. What percentage of sales volume comes from repeat or referral customers? These customers are driven to by past satisfaction. Don’t read any further until you’ve decided on a percentage. Give it your best estimate.
  2. What percentage of sales volume is triggered by location and its exterior signage? These customers come to you because of visibility. Again, write down a percentage, a best estimate.
  3. Add those two percentages together, then subtract from 100. This is the percentage of new customers who come because of advertising or external forces.
  4. Now, how many unique customers have been served in the past 12 months? Write down a specific number. They will probably need to consult records.
  5. Apply the percentage of ad-driven traffic to the total number of unique customers in the past 12 months. This will show how many new customers were served because of advertising. (If ad-driven traffic was 20 percent and Unique Customer Count was 5,000, then you had 1,000 ad-driven customers.)
  6. Divide that number into the annual advertising budget. This is the Cost of Customer Acquisition by advertising. It’s how much they actually spend on advertising to gain one new customer.Note; The formula doesn’t calculate the cost of referral customers because these customers don’t have a direct cost. They are an indirect cost of customer service and relationship management.

Warning: Their cost of new customer acquisition will likely be much higher than you expected. Don’t let this scare you!

Here are the obvious questions:

Q1: With the high cost of new customer acquisition, why advertise?

A: The primary goal of advertising is to acquire new customers. Repeat and referral business depends on it. Good customers move to other towns, or die, and you never see them again. Additionally, new people move into your market and have no idea you exist. Maintaining top of mind awareness is important.

Q2: If they can’t stop advertising, how can we at least reduce the Cost of Customer Acquisition?

A: What if the advertising message were adjusted to drive response to a specific offer or promotion? A specific call-to-action that results in reaching contacts on a personal level. Wouldn’t it be easier to convince a new contact to enter a free promotion than to come into their store? And, when they’ve learned more about them through their profile and embedded survey data, added insight can lead them through the engagement cycle.

Q3: If referrals are the most efficient way to grow, how can I increase sharing?

A: By marketing directly to respondents (email, text, etc.), your investment in promotions yields recurring value. By incentivizing each entrant to share the promotion with friends and social networks, advertising is leveraged far beyond direct responses. This “snowball” effect gains momentum and future promotions and offers have more impact with less reliance on traditional (expensive) advertising.

Lead generating promotions are one of the most cost-effective and efficient methods of marketing. Combined with creative messaging in existing advertising, marketing expenses become measurable and customer acquisition costs reduced.

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The Value of Facebook Fans

The Value of Facebook Fans

“Get more Likes” is a battle cry rising from businesses of all sizes. A strategy that expands the reach of your brand by increasing your fan base is critical for business success on Facebook.

While not the only consideration for a social strategy, the more that “like” you, the greater your influence across their network of friends. You may have 1,000 fans, but each has hundreds of friends who can see the content they interact with. (Note: According the Pew Research, the average Facebook account has 229 friends).

Further, advertisers continue to obsess about driving their Facebook likes. And you can help them!

Interactive Promotions Drive Likes

One of the challenges in attracting Likes is finding a reason to click that little blue button. Many brands lack an emotional connection. It’s not natural to go out of your way to “Like” a hotel page without a stimulus to become part of the social community.

This is where promotional offers can be very effective. Offering a sweepstakes, contest or other incentive is a powerful motivator. We can publish your promotion on your page behind a Like-gate. In order to participate, users must first “Like” your page.

Using marketing messages to drive traffic to your offer, this strategy can increase your fan base dramatically. One of our clients, a local auto dealer, increased fans by 1,100% in less than two weeks.

Turning Facebook Likes to Prospects

Increasing the number of fans is great, but it isn’t enough to drive business results. It’s critical to engage your new contacts. That starts when you collect contact information to communicate without having to count on them seeing posts in their Facebook feed. When they enter your Facebook promotion, you now have a direct contact.

Of course, contacts are not the same as customers. Only a percentage of Facebook fans will become long-term customers. An important step in the process is to identify respondents with the right analytics. What is their age? Gender? Education level? Occupation? Geographic location? Local businesses can also benefit from geo-targeting, reaching only people that are in their marketing or service area.

When they enter a promotion, you gather rich, detailed information about each individual. With the data harvested from embedded survey questions, you’ll quickly identify the most valuable prospects so you can invest your time and resources in those most likely to become loyal customers.

Turnig Prospects into Customers

Once you’ve sorted your list to focus on high value prospects, you’re able to promote offers and tailor messages to specific segments of your audience, based on data in the survey questions.

It’s easy to adjust strategies to target subsets quickly and easily. For example, a furniture retailer could target consumers interested in a kitchen remodel with an appropriate message, while delivering a separate message to those shopping for dining room furniture.

This strategy is a highly effective and efficient method of leading prospects into a deeper relationship with your brand.

Conclusion

A vibrant, active social media community is a valuable asset for any brand, and incentives to “Like” your page is an effective, cost-efficient way to establish your social presence.

Once you’ve earned the Facebook click, and gathered their personal information, nurture these leads with customized communication based on their interests and tastes to convert fans into customers.

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The Power of Radio Promotion

The Power of Radio Promotion

Mark Kasoff is an excellent researcher, and a smart guy, and I don’t say that just because of the findings in his new study on the attitudes and behavior of radio listeners regarding contests.

In his article, Listeners Surprisingly Positive on Contests, Mark points to the growing power of interactive promotions that we’ve observed for the last few years. He says,

I’ve never pushed contesting as a panacea for (radio) stations. A good contest can’t make a bad station successful… Yes, contests can be a real edge for a station, and for traditional radio in general.”

Kasoff’s survey of 18-64 year old radio listeners supports the conclusions of consultant Alan Burns, and provides another reason for broadcasters to increase their attention on this traditional radio advantage.

His findings prove that contests: a) make a station more interesting to listen to, and b) positively affect at least 1/3 of the audience to listen more almost no downside risk.

Kasoff says,

I’m blown away by these numbers. Even if we toss in the requisite ‘grain of salt’, there’s no conclusion other than contesting can be a very good thing!

And, check this out: 12% agree a lot with the statement: You would listen to a station you don’t like just for a chance to win its contest!

Combine this information with the Burns observation that contest players are 55% more likely to participate with a radio ratings service, and you begin to understand the value of having a relationship with “contest types.”

We conducted our own research with embedded survey questions in (enter to win) giveaways. In one market, we found 689 entrants who said that they were currently participating in a radio service that asks you to record your radio listening.

Kasoff concludes:

It’s true that contests have no impact on the majority of listeners’ interest in a station, or how much they listen to it. But there remains a substantial percentage that are impacted by contests, and in an overwhelmingly positive way.

Better yet: Those that are affected, are precisely the ones you want and need to reach.

Though Kasoff and Burns stop short of suggesting tactics for engaging these high value respondents, they both likely would support an aggressive on-air contesting strategy.

We agree with that premise, but take it one step further: What if you had a direct, one-to-one relationship with those folks, and could communicate with them at any time in a series of connected, interactive promotions that led them back to specific appointment tune in occasions? Day after day, week after week?

WP Hatch can help you find them and recruit them as high value listener respondents. Contact us to get started.

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Online database sales lead calculator

Sales Lead Calculator

Many businesses struggle with how to measure the value of their advertising. This tool will help you show advertisers how to evaluate campaign effectiveness based on real dollars earned!

First, let’s define what is and isn’t a “lead.” Not every entrant is a lead. Some just enter to get a prize. We define them as “contacts.” They have value, as some may become interested prospects at some point, but they’re not as valuable as someone who is ready to buy now!

Some promotions generate more leads than others. For example, there will be more entrants interested in trying a new sandwich at a chain of delis than those interested in pursuing a career at a school specializing in nursing. But the value of a new student is far more valuable than someone who wants to buy a sandwich. So how can you figure out your campaign’s success?

The formula is: (TL x CR) X APP X PM / TL

Here’s what it means

Total Number of Qualified Leads generated (TL)

Multiply by Conversion Rate (a percentage) (CR)

This produces the total number of expected sales from this campaign.

Multiply by Average Purchase Price (APP)

This produces the gross revenue generated by the campaign. But now we need to figure out how much it’s worth:

Multiply by your company’s Profit Margin (PM)

Now you know the gross profit expected to be realized. Note: if you subtract your cost of the promotion from this number, you have your net profit for the promotion.

Divide by Total Number of Leads 
(TL).

Now you know the Lead Value (LV), how much each individual lead is worth.

How it works in the real world

A furniture company ran a four week sweepstakes to win a patio furniture set that attracted over 3,000 entries (contacts). Based on the embedded survey questions, the company found:

TL (Total Leads): 689 (homeowners interested in remodeling at least one room, and were interested in meeting with the company’s interior design team)

CR (Conversion Rate): 15% (689*.15=103 expected customers)

APP (Average Purchase Price): $10,000 (103*10,000=$1,033,500)

PM (Profit Margin): 46%

GP (Gross Profit): $475,410 ($1,033,500 * .46 = $475,410)

LV (Lead Value): GP / TL (475,410 / 689) = $690

After adjusting for leads that don’t pan out, they could afford to pay nearly $700 per lead based on immediate value, but there are other considerations.

Lifetime Value: What percentage of the leads become repeat customers? For some businesses (Dentists, for example) the majority of customers return again and again.

Referrals: If new customers refer others to your business, the lead is even more valuable, as one new customer brings in more.

Latent Value: Some leads will convert into customers later, and some contacts may become leads as their interests and situation changes.

If you want to get even more detailed, you can calculate contact value by simply dividing your expected profit by the total number of entries. In this example:

$476,410 / 3000 = $158.47 per entry!

Lead generation is one of the fastest growing areas of marketing and promotion, and once you understand how it works, it’s easy to see why.

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Using Online Promotions and Giveaways to Get to Know Your Audience

Using Online Promotions and Giveaways to Get to Know Your Audience

Data has been described as the new gold. Generating qualified respondents relies on accurate, actionable data, and gathering that information is about knowing what to ask, how to ask it, and making it worth listener’s time to respond.

If you ask it the right way, you can learn virtually anything about your audience. Do you need to know how your radio station is perceived against competitors? We can do that. What other stations do they listen to? No problem. When and why do they tune out? And what unique features on your station bring them back? Do they listen at work? The possibilities are endless.

By extending promotion offers beyond your current audience, we can even identify those prospects who may not listen now, but fit your station target audience. With a direct relationship, you can lead them to tune-in sampling.

Does it work? Yes! In a recent promotion for one of our clients, 97% of all entrants answered at least three questions, resulting in over 8,200 responses, each a prospective new listener that could deliver 1/4 hours indefinitely, if you manage the database properly and invite them to participate based on their interests.

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Radio Group Increases Digital Sales 500%

Case Study: Radio Group Increases Digital Sales 500%

Case Study Overview

While radio advertising declines (-3%), and radio digital revenue grows (+18%), one of our radio clients (3 stations in a large market) has increased digital revenue by 500%.

They’ve increased from $400,000 per year to over $2.1 million.

And, they did it without adding clutter. In fact, they increased ratings, grew their database to 9% of the market’s population and funded expansion to include a dedicated digital sales team.

Their growth will continue.

Here’s how we did it:

  1. Developed a strategy and enforced the vision throughout the company.
  2. Invested in the right infrastructure, with controlled, systematic growth.
  3. They didn’t try to do everything, but focused on executing with excellence.
  4. They hired us to help guide audience acquisition and revenue generation.

Are you engaging your audience online, via social media and on location? Is it converting into measurable results? Are you increasing ratings? How is your digital revenue plan?

Want some of this for your brand? Contact us today.

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How to Increase Radio Sales

How to Increase Radio Sales

Notorious outlaw Willie Sutton was asked why he robbed banks. He said:

Simple. That’s where the money is.

The Radio Advertising Bureau reported that radio revenue has declined by 3% (download report here). And this was a year for economic recovery. The decline would have been greater, but:

Digital revenue increased by 18% and non-spot revenue by 7%.

18% is great, but it could be so much more. One of our clients has grown annual digital revenue by over 500% (to almost $2 million per year). Read more here.

WP Hatch to the rescue! To thrive, radio stations must grow revenue by harvesting sales from new sources. And we’ll show you how, with our creative, clear step-by-step training process. Here’s how:

  1. Establish Goals. You can’t manage what you don’t measure. We help you set realistic, achievable expectations.
  2. Training account executives. We de-mystify digital sales, offering easy-to-present, non-threatening packages.
  3. Demonstration. We’ll even come to town and help you sell it. This builds confidence in the concept!

With a focused, methodical process, you’ll generate sales in new business categories and deliver measurable, accountable results to advertisers.

Want some of that?

Go where the money is, and capitalize on the power of your loudspeaker with our innovative digital revenue solutions.

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Using a Smart Database to Increase Radio Ratings

Using a Smart Database to Increase Radio Ratings

What if you could know everything about your listener?

When they listen. Their music preference. Why they listen. What they do in their spare time. The prizes they want to win. Their relationship status. Where they work. When they work.

With knowledge of their tastes, behavior and perceptions, your messages can be targeted specifically to an individual in a deeply personal way.

By leveraging the power of digital tools, social media and mobile engagement, our techniques develop smart profiles that identify characteristics and lead to a direct, one-to-one relationship with your audience…and even better: Potential listeners who may not have discovered you yet!

Armed with actionable, meaningful data, direct marketing tactics will cause ratings to soar. One client increased 1/4 hour share by 26% in just six weeks. 

That’s not just a smart database, it’s smart marketing. And it fits perfectly into your existing programming.

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