Marketing Result Tracking for
Promotional Products Campaigns

This article is designed to show businesses how to make money by offering promotional products to their customers and also to help those already selling promotional products to be more effective.

Many companies don't believe quantifiably measuring the results of their promotional products programs is possible so they don't even try. Some others may believe it's possible, but have no clue how to do it. This report will show you how.

If you look at promotional products as an expense, you are not optimizing what they can do for you. When you consider a promotional product program to be an investment whose return can be measured and justified, you will get much better results.

Why Do Tracking

Aside from wanting to know whether you are wasting your money, there is another good reason to implement marketing result tracking: to make your marketing programs work better. If you have a promotional products rep with the skills to help you, setting up tracking for each program will give you a baseline to measure future improvements against.

Then, by tracking properly, you can try different things to see if you get better results than your baseline. When you find something that works better, that becomes the new baseline. In direct marketing they call this the "control". You always test against the control and whenever something beats it that becomes the new "control".

Using this process gives you better and better results over time. When a program beats your "control", it becomes the new control. If it doesn't work better, the existing "control" stays in place. Continued testing and comparisons result in improved performance over time.

Set Quantifiable Goals

The first step in marketing result tracking is to have a quantifiable goal for your program. You need something that can be measured so that the results are not a matter of opinion. Say you are offering a free report — if the goal of a program is to get 50 report requests, it is easy to measure.

If the program's objective is to increase sales, you then need to be able to track both the leads generated from the program as well as the resulting sales. Most businesses that do tracking of any kind are tracking leads but not conversions into sales. Since leads from some sources convert to sales better than leads from others, it is critical to track both.

There are 2 parts to a good tracking system — the tracking method that tells you who is responding and the back end database that keeps track of where your leads come from so that you can correlate it with sales later.

Back-End Database Recording & Reporting

You may already have a customer or prospect database in your business. If you do, it will probably work just fine. All you need is a field you can assign to each contact called "source code." You assign a different code for each promotion you do.

When a lead turns into a sale, you check the prospect database to get the source code and attribute the sale to that code on a monthly source code report. A good goal for your accounting people is to have a source code for 95% of all your business each month. You probably already have some sort of sales report, so now get another report allocating those sales to the different source codes.

For a small business, you can easily do this using ACT or Goldmine and then take the data and compile it on an Excel worksheet each month.

Existing customers who order regularly can be given a source code of "customer." If a special promotion results in an order, that order should be allocated to the source code of the promotion that created it.

Note that once a new account is created from a promotion, that account's future sales, including reorders, will be attributed to that source code. This gives you a much more accurate representation of the program's success. If you are doing a promotion to get new accounts, you can get an even quicker evaluation of your results if you know your lifetime value of a customer.

Determining Lifetime Value Of A Customer

Do you know how much a new customer is worth to you? There is a term called "lifetime value of a customer" that should be used by anyone in charge of the marketing and/or marketing result tracking for their business.

Lifetime value of a customer tells you how much profit you earn from an average customer over their lifetime as a customer for your business. This is important to know so you can determine what you can afford to pay for a new customer.

With promotional products, understanding this can keep you from making bad marketing decisions. For example, If your average lifetime value of a customer was $3,000, it would make sense to "buy" as many customers as you could if you could get them for $300 each wouldn't it?

Let's say you do a marketing campaign to get new customers and you make $10,000 in sales from the program but the campaign cost $15,000. It would be easy to conclude the program was a failure. But, what if that $10,000 in sales came from 20 new customers? If the lifetime value of a customer is $3,000, these 20 customers are ultimately worth $60,000 to in total profit for a cost of only $5,000.

Looks like success to me, not failure! By knowing this, the same campaign with the same result has changed from a disaster to a profitable program that should be continued. Here's how to calculate this all-important number:

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Divide your annual sales by your number of customers to get the average annual sales/customer.

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Multiply this by your average gross profit percentage to get the average annual gross profit/customer.

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Estimate how many years you retain an average customer. (You can calculate this if you know how many accounts you lose each year — divide that number into your total number of customers to get the number of years an average customer stays with you).

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Multiply the profit in step 2 by the number of years in step 3 to get your estimated lifetime value of a customer.

Ways To Set Up Tracking

There are many ways to set up the front end portion of the marketing result tracking. Your tracking code can go on a product, go on a response vehicle or even be the price, color or style of the product itself.

The best way to track a promotion is to have a no risk offer attached to the promotion. If the prospect is to respond to request something free like a discount coupon, a free gift, a free report, etc assign a different number or name to each promotion. As an example if you are giving away a free report that teaches a prospect how to buy whatever it is you sell, each promotion you do can assign the report a different number.

Even though it is the same report, # 101 could be the first promotion to give away the report, # 102 the second, # 103 the third, and so on. The report is the same for all, but the code lets you know which promotion created the request.

Here are some more ways to do your tracking:

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If the recipient is to bring the item in for a discount, get it in different colors for each promotion.

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If it's a price related promotion, vary the price - $54.95, $54.96, $54.97, etc. The penny differences allow a tracking code to be associated with each price.

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If there is a form of any kind to be returned, copy direct marketing companies and put a tracking code on the bottom left corner of the form or on the mailing label.

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If it's a safety program, make sure you know the level of accidents before the program and keep good records to know how much it improves.

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For trade show booth traffic building promotions start with how many leads you get at the booth. Hopefully you have some sort of offer associated with your promotion like a show special. As long as your offer is something you are not offering elsewhere, the number of people who take advantage of it and the resulting business can be measured. Then make sure to track the resulting sales. The next time you go to the same show, try something else to see if you can beat your previous results.

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For referral or lead generating programs where you are sending out a 3-dimensional item as an attention getter for your message, assign a code to the response vehicle so you know the leads or referrals came from that promotion.

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For any program with multiple versions you want to test — if the responses are being mailed back you can code the return card. You can also mark reply cards with a different color marker for those sent to each different group.

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For important programs that involve phone responses, you can even get a special number from the phone company and arrange for tracking of even local calls.

Use Surveys For Tracking Intangibles

If you want to track what employees think of a handout at a company picnic, the satisfaction level of incentives in an incentive program, or the appropriateness of a recognition program, these things can be hard to put a number on.

Since we always want to track everything, the best way to track opinions is with surveys. There is an excellent tool at www.surveymonkey.com that allows you to conduct anonymous web based surveys. For surveys of 10 or less questions and 100 or less responses, the service is free. There is a small charge for higher numbers.

To make the entire project painless and free too — put a feedback card in with the promotional product asking for feedback at the survey site or send out an email with a link to the survey page. Either way, you can do this totally for free. Find out what people thought about the handouts at your golf outing or anything else not easily quantified.

Do this every time and work at a higher satisfaction level each time and you will be tracking even the intangibles!

Web-Based Tracking

Many times you might want a web based tracking system to allow people to get information, coupons, etc in a no risk way from a web site. When you do this, all the leads you send to the web site become mixed in one big pot because you cannot tell them apart by their source.

If you use a shopping cart service like 1ShoppingCart, you can use their ad tracking technology to create different codes for each promotion so you can tell where your visitors came from. If you use their shopping cart, the ad tracker will track each lead through to sales and calculate the response level automatically even if the sale occurs a year later.

This is easy to do with totally web-based promotions because ad tracker codes are invisible when assigned to links in an email, a banner, or other web link. The problem occurs when traditional marketing is combined with the web.

The answer to this is to use the same ad tracker technology. Since the tracking codes can be 40 digits long they are unwieldy for off-Internet use. Take the code and put it through their URL shortening process. It''s free and will create a short URL you can use as a code on a promotional item or program so that you do not lose the leads that respond by going to your web site. It works by creating a seamless, invisible redirect between the short URL and the long one.

For More Information Contact:

Joe McVoy
Profitable Marketing Systems, LLC
1100 Nautilus Court
Lafayette, CO 80026
Web: www.ProfitableMarketingSystems.com
Email: Joe@ProfitableMarketingSystems.com
Phone: (720) 890-8760
Fax: (303) 604-6839