site is performing, there are a number of tools that can address this need.  A popular data-gathering tool is Google Analytics (www.google.com/analytics/).  While it may not be the most extensive, I would recommend it for two main reasons; one, it covers a good range of statistics for those who are just starting in this area and second, it is free (not bad considering today’s economy).

The following are some initial guidelines in getting started and tracking some of the critical variables.       

 1- Tracking Code: To collect any data for review you must first install on your web site what Google calls its tracking code.  After signing on to Google Analytics go to overview and click on Edit and then click on status.  It will show you a copy of the tracking code and explain where to paste the code into your web site.  Once you have installed the tracking code, wait at least 24 hours for Google to provide some initial data.  After waiting, sign in to Google Analytics and click on view report.  You are now ready to starting analyzing your web site’s performance.

 2-Bounce and Exit Rates:   After clicking on view report, look on the left side of the page, click on content and then top content, scroll down to see the details.  You will see bounce rates and percent exits.  Bounce rate tells you that for this particular page the viewer came and left just that page.  If you have too many high bounce rates, you might want to reconsider the contents of these pages.  Exit rates tell you that the visitor left your site via this page.  Again, like the bounce rate, if you have many exit pages, you might want to change the content of these pages or the linkages.

 3-Keywords: Go and click on traffic sources and drop down to keywords.  This page will give you an idea of which keywords are driving clients to your web site.  You may want to modify some keywords if you are not seeing the results that you are want.

 4-Landing pages: Click on Content and then Top Landing Pages.  Landing pages are the pages on how visitors got to your web site.  It is important that these landing pages have viewers go to other pages or stay on these pages.  Again, if the data shows otherwise, you might want to modify the content and/or insert an offer or put a call to action on these pages.

 5- Average time on page: Click on Content and then Content by Title.  Average time tells you how long a visitor is on each page.  This is an important piece of data because it tells you if the viewer is just “passing though” or is actually reading the content of the various pages.  Again, if the average time is low on certain pages, you might want to modify them.

 6- Goals: Google Analytics provides you with the capability of setting up four (4) goals.  By creating goals, you can see if activities like campaigns, emails or promotions are meeting your targets.  To setup your goals click on view report and then Edit.  Scroll down to the goal section where you can name the goals, select types and input a value for each goal.

 Well these are just some of the basics in getting started with Google Analytics.

Regardless of which data collection tool you choose, pick one and start gathering so you can see if you are meeting your goals and how your web site is performing.

 If you have any questions or issues with Google Analytics drop me a note and I will get back to you.  Until next time, turn that data into information!

 RHL  11/ 05/09

In today’s confusing economic environment, planning for 2010 is full of uncertainty.  To me, there is only one metric to use in planning for 2010, the actual increase or decrease in number of customers.

As an example, assume a company has 1,000 customers.  Under “normal” conditions, it would expect to lose up to 10% or 100 of its customers during a year, due to industry consolidation, change in buyers, competitors buying into the market, etc.  During the same year, it would expect to gain a minimum of 100 new customers due to its aggressive sales force, planned promotions, new products, etc. etc.  Thus at the end of a “normal” year the company would expect to be ahead of where it was when it entered the year.

In planning for 2010, I would take the net increase (decrease) over the past two years and use it to construct my marketing plan. (Note:  I am assuming that the current customer base consists of profitable customers; that unprofitable ones have been purged and are not part of this comparison.)

Bob’s Tool and Die has these numbers:

2008                                                                           2009

Net gain (loss)                                                            Net gain (loss

Added Customers              90                                                                                75

Lost Customers                 100                                                                             125

Net                                           (10)                                                                             (50)

In planning for 2010, many companies will show a loss of customers over the past two years.  Assuming this is the case for Bob’s Tool and Die, the company’s 2010 marketing efforts must be directed to the installed customer base in order to stem any additional losses.  This may include newsletters that are more frequent, customer forums, executive outreach, etc.  The objectives are to acknowledge shortcomings (there are always some) and to assure the customer base that Bob’s Tool and Die is ready to serve them.

The 2010 metric for the CMO is consistent with the financial reporting of today…show a lower rate of loss.  Having the same number of profitable customers in December 2010, which were in place at the end of 2009, would be a superlative performance.

In addition, an accelerating loss of customers over the past two years may be indicative of a number of things, i.e., poor positioning, pricing out of line, poor customer service, uncompetitive products, etc.  The CMO’s job is to determine the cause and work with management to take the appropriate corrective steps.

Comparatively, Alice’s Software shows a gain of 7 customers in 2008 and 25 in 2009.  Here the CMO has a different approach to 2010 planning.  First, whatever she/he is doing is successful, so at a minimum Alice’s CMO must continue doing it.  The near term emphasis should be on finding out what marketing tool is most effective (Direct Mail, Podcasts, Digital Marketing, etc) and to do more of it.  The performance metric for the CMO at Alice’s software for 2010 is to replicate her/his 2009 performance.

To me, the other available metrics (ROI, Click Thru’s, # of impressions, # of qualified leads etc.) are simply measures of activities and are reflective of tactical means to an end.  For the CMO and the enterprise, the only real metric for 2010 is the number of profitable customers…is it increasing or decreasing.

My response to those who want to focus on profitability is, focus on the customers first.  The company can scale its infrastructure to the number of customers, but if this number is unknown, then the appropriate infrastructure cost of the company is unknown, as is its profitability.  This applies to both hardware and software companies.

What metrics are you using in your 2010 planning?  Is it focused on your customers?  Do you know how many customers you lost and gained in 2009?

RHM 10/22/2009

The proverbial “crystal ball” is broken, making any analysis and forecasting impossible.  Depending upon who you read or listen to, the economy is either getting better, not getting any worse, fragile or ready to turn down.  A consensus is that any recovery is going to be long and slow.

Accepting a position that the economy will remain flat for the 3^rd and 4^th quarters of 2009, as well as the first two quarters of 2010, the push for CMOs should be to gain market share, as strong organic growth is probably several quarters away.  This holds for market-share leaders as well as market-share followers.

The trick in gaining market share, when everyone else is trying to do it, is a combination of offensive and defensive moves.

1. Protect and cultivate your current customers.  Losing a key customer to a competitor not only reduces revenue; it gives the competitor a weapon to go after your customers.  It is harder (more costly) to get a new customer, and very costly to lose an old customer.  To make sure that your customer base is protected, keep your customers happy.  Make them understand that their needs are being met and help them understand your goals, Remember, any additional sales, upgrades, migrations, etc. that you make to the installed-customer base is less costly than selling to a new customer.
2. Hone your value proposition message.  Today’s environment reflects fear and uncertainty.  A company’s value proposition should address these concerns, by merging the differentiated message (faster, easier to use, longer lasting, etc.) to creative financial offerings that enhance or increase the ROI… in a few words that are clear, memorable and always visible.
3. Enhance your value by offering more at the same price. This is not a recommendation to cut prices, but rather a recommendation to augment the product/service offering with more value.  Free shipping, free installation, lower cost training, extended warranties, no-cost upgrades, etc. can be tied to the basic value proposition to make a more compelling story.  Each of these tactical moves can be limited by time, or tied to volume, so that when the economy picks up they once again become chargeable items.
4. Understand your demographics.  If you have had success in a specific vertical, geography or segment, continue to push each and every part of that area.  Having success in the education market doesn’t automatically mean that you will be successful in Financial Services.  You might find it easier in a growing economy but trying to convince buyers in today’s economy is difficult…especially when competition is protecting their turf.
5. Increase your visibility.  Traditional ways of communicating your message/value proposition are changing.  The reach of print media is down, fewer people are attending trade shows and seminars, direct mail, both snail and email, appears to be less effective, traveling road shows aren’t getting the audiences they have in the past, etc.    Increasing your visibility in this environment requires the pragmatic integration of applicable social networking tools to an expanded program.  For example you might:

• • Create and maintain a transparent blog that adds value.  This could be augmented by a series of podcasts.
  • Monitor and be responsive to comments about your company in blogs, tweets, and on social networking sites such as facebook.
  • Provide articles for the print media that covers your industry.
  • Ensure that you have speaking spots and/or seats on panels at industry conferences.
  • If possible tie your company’s products and actions to current topics, e.g.,

i.      What are you doing that is “green?”

ii.      Can you cut health care costs?

iii.      Is there something that you are doing that result in happier employees?

iv.      Etc.

Delivering increasing revenue over the next year is going to be difficult.  Gains will come from beating competitors for any new business or by displacing them in existing situations.  Implementing a series of tactical plans in the next month should help meet 2009 targets, as well as provide a solid footing for 2010.

As the CMO, can you spell out the new plans and programs you are going to implement after Labor Day?

RHM  9/1/2009

Although we are only a few days from summer, it is not too late for “spring cleaning”  The Wikipedia entry for “spring cleaning” reads:

The most common usage of spring-cleaning refers to the yearly act of cleaning a house from top to bottom which would take place in the first warm days of the year typically in spring, hence the name. However it has also come to be synonymous with any kind of heavy duty cleaning or organizing enterprise. A person who gets their affairs in order before an audit or inspection could be said to be doing some spring-cleaning.

In today’s economy, almost all hardware and software companies can benefit from spring-cleaning. The focus should be on those products that are in the last stage of their life cycle. Many companies are loath to “sunset” products, often for a variety of reasons; the CEO cut his teeth on that product; one major customer continues to buy it; it was our flagship 5 years ago, we will lose out identity if we sunset it, etc. etc.

However, by critically examining the product(s), especially in the harsh light of today’s economy, an astute Product Manager may find that demand has fallen off dramatically, that the margins once generated are no longer there, or that the product is no longer competitive.

If the decision is to do spring cleaning, what actions are appropriate? Underlying all decisions is the need to recognize that if action is appropriate today, it will be imperative six months from now. So fast, aggressive action must be taken today.

For chosen hardware products:

1. Immediately stop production and stop the purchase of all unique parts. Take inventory and determine the value of unique parts in stock. Based on finished goods inventory and projected demand (which will probably be high) make a determination on whether to build out inventory or not.

2. Determine if promoting and selling the chosen products will cannibalize growth products. If yes, seek an alternative disposal process. If no, move quickly to clear the inventory. The best way to clear inventory is to increase the value of the transaction. This can be by lowering the price, or by tying the sale into some other value, i.e., free installation, extended warranty.

3. If the promotion of the chosen product(s) will cannibalize growth products, consider:

a. Contacting the main customer(s) and working with him/them on taking the inventory at a reduced value,

b. Finding a geography that is not as mature as your main market, and moving the product(s) through that geography,

c. Focusing on a well defined vertical, and re-position the chosen product(s) in that vertical with some added features/benefits. Make sure that this solution does not overlap into your mainstream market.

d. Scraping the inventory.

For software products:

1. Announce the end of life (support) for the chosen release.

2. Announce the quarter in which the next release will be made.

3. Offer inducements to the installed based to purchase the current release, with a well-defined path for upgrading to the new release. (Assuming that it is not a forklift upgrade.)

4. Stop all promotion/selling of the chosen release.

Clear direction to the sales channels regarding the discontinued products is a critical part of any spring-cleaning. Specifically, instructions on how to handle on-going sales to existing customers, defined migration paths, length and breadth of warranties, etc, for each product must be finalized prior to any announcement.

Taking action now may preclude having to set aside a “reserve” next January, after your auditor has reviewed your sales forecasts and inventory.  Usually such reserves are a charge against profitability, which may already be slim this year.

Is spring-cleaning in order?

RHM 6/18/2009

Here and here, I have commented on the need to focus on your installed base of customers. The Pareto Principle or 80:20 rule (20% of your customers account for 80% of your business) strongly suggests that focusing on your top customers is a good business practice. As the current economic conditions are limiting new sales, and  “rip and replace” sales are almost impossible, concentrating on established relations may be the only way of increasing revenue.

Below is a 20-question checklist that you can use to gauge how well you are focusing on your top customers. The questions are structured in a binary, yes or no fashion. Using a 1 for Yes, and a 0 for No, you can quickly see where you stand. For simplicity’s sake, I use the phrase, “top 10,” but this number can be changed to reflect the number of customers in your 20%.

There is no “passing” score, and no question is more important than another is. If you score all “1’s,” you are doing very well. If you score all “0’s,” you are probably in trouble.

YES NO QUESTION

Can your management team name your top 10 customers?

Can each member of your Marketing organization name your top 10 customers?

Can each member of your Customer Service organization name your top 10 customers?

Is each of your top 10 customers assigned an executive sponsor?

Has that executive sponsor visited, not called his customer(s) in the past 90 days?

Do you know if any of your top 10 customers have piloted or increased their volume of any of your competitor’s products?

Is there an established process in place to handle a relationship renewal, e.g., a new contract, for each of your top 10 customers?

Is there a process in place to handle a competitive attack on one of your top 10 customers, to ensure that they remain with you?

Have you initiated a pricing discussion with your top 10 customers within the past 6 months, reflecting their change in volume potentially offset by your newer features and/or services?

Have you shared your product roadmap with your top 10 customers within the last six months?

In that meeting, did you do more listening (1) than talking (0)?

Did Sales (0) or Product Management (1) lead the roadmap meeting?

Do you have an ongoing list of customer requirements that is drawn from your installed base of customers?

Have you delivered items on this list in the past six months?

Do you have a newsletter that is sent to multiple people at each of your top 10 customers?

Are you aware of how your top 10 customers like to receive news, i.e., blogs, twitter, facebook, etc.?

If they are looking to social networking for information, do you have these tools in place?

Are your executives (not salespeople) following the blogs, tweets, etc., of your top 10 customers?

Do you know the customer satisfaction level of your top 10 customers?

Do you have tools in place to record customer satisfaction?

There is a high probability that you will lose at least one of your top 10 customers this year. While this may be due to conditions beyond your control, it could be for other reasons. Most frontline salespeople will mask or otherwise diminish negative changes. What marketing and executive management don’t want to be saying, upon reflection of a top 10 loss is, “If we had only known” or “Why didn’t we talk to them earlier?” Changing “0’s” to “1’s” in the above checklist will preclude this from happening and improve your revenue stream.

RHM 6/10/2009

Buyers (or buying committees) respond to the tone or tenor of their company which is often expressed in both direct and indirect incentives.  At the current time, the tone at most companies is conservative, reflecting the management team’s doubts and uncertainty about the balance of 2009 and 2010.  Expenditures are being managed on a quarter-to-quarter basis, with monthly status reviews.  A premium is paid to those functions that exhibit “agility” and managers who commit errors that lock the company into “the wrong decision” are often castigated.

Buyers are not buying because they are incented or forced not to.  This corporate tone takes many forms:

• Management telling each function to “do more with less.”
• The reduction in discretionary buying authority and the establishment of endless review committees.
• The desire of functional mangers to exceed goals/limits for a more positive review…look, instead of saving 10%, I saved 20%…reward me accordingly.

Barbara suggests that compelling ROIs, coupled with knowledge that your competitors are using your product, combined with strong reference accounts will close the sale.  I agree that all are part of any product/service offering.  However, unless the data presented is so compelling (90 days or less ROI!!!) the negative “do not buy” incentives will out-weigh the decision to buy.  Borrowing from football coach Bill Parcells’ famous “you are what you are” phrase, the economy is what it is and buyers are acting according to their self-interest.

Accepting this, Marketers in 2009 should reflect on past, similar conditions (the Great Depression) and implement the successful strategies used then.  Specifically:

• Know, understand and cultivate your customer base. Up-sell when possible, but make sure that your key customers know who you are and what you can do when the economy turns around.
• Build your brand awareness and differentiators within your core target market.  Use the appropriate social networking tools to accomplish this…2009 tools that are the 1930s equivalent of radio and print advertising.
• Hone your value proposition, stressing the benefits that the buyer will receive.  Communicate this through the appropriate product mix.  Dick Lush has provided some thoughts on value propositions here.

When management loosens the reins, success will flow to those firms who have clearly established who they are and why they are better.

RHM 6/3/09