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12 experts measure the ROI of customer service 1

Posted on March 30, 2014 by Rob Petersen



ROI of customer service

  • It costs 4-6X as much to acquire a new customer as keep a current customer (source: The Times)
  • 80% of a company’s future revenue will come from 20% of its existing customers (source: Gartner)
  • 5% increase in customer retention can increase a company’s profitability by 75% (source: Bain and Co.)

You get the idea. You can’t be in business without putting the customer first.

Customer service is the series of activities that enhance customer satisfaction to keep customers coming back.

Some have argued the quality of customer service has decreased in recent years. That it’s due to lack of understanding and planning at the executive levels on the Return on Investment (ROI) of customer service or, more specifically, Return on Service (ROS).

Do you think so? Here’s how 12 experts measure the ROI of customer service.

  1. “Customer service is not being completely about services, but also as the delivery tools to create company image and customer feelings. And customer feelings are the cornerstone of any successful business.” – Aida Alakbar, TeliaSonera
  2. “It is no longer good enough to simply satisfy your customers or to have a product that works. What will really make the difference is when the customer asks: when I went through that experience, did the provider really engage with me, did they understand my needs, did they think logically about what was best for me? – Jo Causon, CEO of the Institute of Customer Service
  3. “Global companies spend the equivalent of 2% of their marketing budget on actively maintaining relationships with existing customers, while 86% of us have stopped working with a company due to bad customer service – it suddenly all seems to add up.” – Tom Eggemeier, EVP of Global Sales, Genesys
  4. “The overriding factor for consumers will be trust. - a high level of trust will result in a good customer service ROI. Consumers have to trust a supplier to deliver against its promise. Whether that is providing the best price, being available when needed, or getting a response to an inquiry,” - Customer Champions
  5. Once you make an emotional connection with a person, the trust and respect you gain far outweighs the benefit that you get from any form of marketing or advertising efforts. The bottom line is, customer service banks on the long-term ROI. - Evergage
  6. “The rank that consumers assign to a brand relative to the other brands they use predicts share of wallet according to a simple, previously unknown formula, which we’ve named the Wallet Allocation Rule. The essential distinction of the Wallet Allocation Rule is that it takes into account both rank—Is your brand a customer’s first choice? Second?—and the number of brands in the set the consumer uses.” - Timothy L. Keiningham et al, Harvard Business Review
  7. “A simple, practical and intuitive approach  is if a company asks itself, ‘What, specifically, do we want customers to do more of or less of?’ Attitudes (such as satisfaction) and feelings (such as delight) aren’t included – only observable behaviors, such as ‘use our service more often,’ ‘purchase more items on an average visit,’ and ‘return merchandise less frequently.’” – Kinesis
  8. “It’s best to start by understanding the value proposition of your company. For example, do you compete on customer experience, where satisfaction measures are of primary importance, or do you compete on cost, where efficiency and productivity measures are most important?” – Kate Legget, Gardner
  9. “The problem is that there is an inherent conflict – a tradeoff – between a customer’s current-period purchases and her lifetime value.  Businesses are obsessed with short-term results. In sales and marketing terms, it means they are simply eating their own customers, a little at a time.” – Don Peppers, Pepper & Rodgers Group
  10. An organization must be able to make a direct connection to a performance metric. Many times organizations just give the customer what they want. But there is a big difference between what a customer says they want and what drives value ($). To get ROI, you need to focus on value. – Colin Shaw, CEO, Beyond Philosophy
  11. “Stop telling consumers about something they don’t want and will never buy, because eliminating that waste through data to focus on consumers who really care about certain products gives brands a 60% improvement in return on investment.” – Laurie Sullivan, MediaPost
  12. “The payoff of any project can either be a profit increase or cost saving. For most cases and especially customer service improvement initiatives, the payoff is likely to be cost saving, such as reducing staff time spent on a task, improving the quality and driving towards first contact resolution, and avoiding cost associated with errors.” – Etta AuYeung – Customer Service Advantage

For more facts on the value of existing customers, check out the infographic below

Do you think customer service has decreased in recent years? Do you agree with the way these experts measure Customer Service ROI?

Value of Existing Customers

5 reasons analytics is the most coveted marketing skill 0

Posted on March 22, 2014 by Rob Petersen



Iceberg for Analytics

  • 76% of companies believe analytics is a very important skill to have
  • Only 39% believe they have strong analytics talent
  • That’s a gap of 37%  among companies that value analytic skills but don’t have the talent in place (source: Online Marketing Institute)

Analytics is where more companies state they have the biggest talent gap according the OMI Study. The State of Digital Marketing. This is the issue on the surface. But is there a bigger problem that lies beneath?

Analytics is the study of past historical data to research trends and evaluate performance to gain knowledge and effect decisions. The result being to make improvements that create change.

Why do so many companies believe strong analytics solve a problem? Or is this the tip of the iceberg and another issue  lies below the surface?

Here are the 5 real reasons analytics is the most coveted marketing skill (with the facts that back them up).

MAKE BETTER DECISIONS: Analytics gets to better business decisions.

  • 91% of senior corporate marketers believe that successful brands use customer data to drive marketing decisions (source: Interactive Advertising Bureau/Columbia Business School)
  • 72% of executives believe management decision making is only moderately efficient (source: Economist Intelligence Unit)
  • 56% of executives are concerned about making poor choices because of bad data (EIU)
  • 55% of executive decisions are based on ad hoc consultation instead of corporate metrics (EIU)
  • 25% of executives believes management frequently, or always, gets its decisions wrong (EIU)
  • Less than 10% of of executives receive the information they need (EIU)

ACCOUNTABILITY: Analytics improve accountability

  •  70% of senior executives say they use “what if” scenarios at different budget levels to determine sales and profits  (source: Association of National Advertisers)
  • 39% of senior management views marketing as an expense (ANA)
  • 39% say they are satisfied with marketing’s impact on sales and brand equity (ANA)
  • 38% of senior executives agree marketing and finance share common metrics (ANA)
  • 34% of senior marketing execs say they were satisfied with their agency’s metrics (brand health, copy testing, reach, frequency) (ANA)
  • 20% of senior management feels confident in forecasts of how marketing activities will impact sales (ANA)
  • 19% say they were confident that if they had to cut marketing spend by 10%, they could use metrics and analysis to forecast the impact on sales (ANA)

KEY PERFORMANCE INDICATORS (KPI’S): Analytics help identify the right key metrics to create an actionable scorecard that keeps strategy on track

  • 90% of CFO’s believe the KPI’s they use are reflective of reality but could be improved (source: Pricewaterhouse Coopers)
  • 33% of CFO’s deploy too many KPI’s (more than 20) to be useful
  • 33% don’t deploy enough (less than 5) to be useful (PWC)
  • 33% think their current set of KPI’s is adequate (PWC)
  • 20% plan to produce KPI’s more often (PWC)
  • Only 8% think the quality of their source data is excellent

RETURN ON INVESTMENT (ROI): Analytics determine how effectively the business and financials are being managed.

  • 87% agree capturing and sharing the right data is important to effectively measuring ROI in their own company (IAB/CBS)
  • 57% are not basing their marketing budgets on any ROI analysis (IAB/CBS)
  • 51% say that a lack of sharing customer data within their own organization is a barrier to effectively measuring their marketing ROI (IAB/CBS)
  • Only 43% of organizations are establishing their marketing budgets based on marketing ROI analysis (IAB/CBS)
  • 38% say they were extremely satisfied or very satisfied with their company’s ability to change established marketing strategies and budgets when ROI reports demonstrated they were not effective (ANA)
  • 37% of respondents did not include any mention of financial outcomes when asked to define what “marketing ROI” meant for their own organization (IAB/CBS)
  • Only 8% of companies can determine ROI for their social media spending (source: Econsultancy)

BIG DATA: Analytics gets us ready for Big Data.

  • 90% of the world’s total data has been created just within the past two years (source: IBM)
  • 75% of companies say they will increase investments in Big Data within the next year (source: Avanade)
  • 65% of companies deploy Big Data technology to boost the speed and quality of business decisions (source: CIO)
  • 59% of organizations lack the tools required to manage data from their IT systems (source: Saffron Technologies)
  • 34% of organizations say they have no formal strategy to deal with Big Data (source: Information Week)
  • 5% of companies believe Big Data will “fizzle out after the hype dies down” (source: CIO)
  • 30 billion pieces of content are shared on Facebook each month (source: McKinsey)
  • 140,000 to 190,000 people with deep analytic skills as well as 1.5 million managers and analysts will be needed by 2018 to fill jobs in Big Data (McKinsey)

BarnRaisers helps companies use analytics to make improvements and create change.

Digital Analytics, Measurement and ROI are courses I teach in the Digital Marketing Mini-MBA program at Rutgers CMD. Class is in session the week of March 31st.  I also am a co-author of  Strategic Digital Marketing, the ultimate crash course in digital marketing, and wrote the chapter on Measurement and ROI.

Does your company need analytics help? Do these reasons explain to you why analytics is so important to so many companies?





10 case studies prove the ROI of brand advocates 14

Posted on December 07, 2013 by Rob Petersen




Brand Advocates

brand advocate is a person, or customer who talks favorably about a brand or product, and then passes on positive word-of-mouth (WOM) messages to other people.

According to Forrester, Zuberance and an infographic from Jay Baer (below), the influence of brand advocates accounts for billions of dollars in purchases for everything from cars to computers, hotel rooms, movies, enterprise software, and more. Brand advocates are:

  • 5X more valuable than average customers
  • Spend at least 2X as much as average customers
  • Spend 3X as much as average customers over their lifetime of their relationship with a company or brand
  • Reach 150 people in social media every time they advocate for a product or service
  • 92% of consumers trust brand advocates

Do brand advocates generate return on investment for brands? Here are 10 case studies that prove the ROI of brand advocates.

  • AMERICAN EXPRESS: To promote small business credit cards, American Express created a social media community for small business owners to share, learn and grow. They also created a holiday, Small Business Saturday. The community has 2,700,000+ Likes, 195,000 Tweets and American Express saw a +23% increase in transactions to small business merchants.
  • CARS.COM: encouraged rating, reviews and sharing (versus no ratings, reviews and sharing) and it showed that pages that had ratings and reviews had a 16% higher rate of conversion and a 100% higher rate of traffic through to dealer’s sites.
  • DUANE READE: A drugstore chain with 250 location in New York and New Jersey, used a VIP Blogger Team generating content via their own social platforms, DR-QR code landing page, blogs, and Google+, in addition to traditional PR tactics. The utilization of celebrity bloggers from daytime shows and one-hour Twitter parties created over 20 million impressions. From over 2000 pieces of original content, there was a 28% lift in year-over-year sales and a 5x ROI.
  • FOLICA: A well-known retailer of health and beauty products, noticed they had many referrals to their website, but had no way of tracking and identifying these referrals. By engaging their customers and encouraging them to share the secrets of great hair, customers were able to share via Facebook, Twitter, email and personalized urls. After 30 days of running the new Social Referral Program, 6,000 brand advocates were identified. The average number of shares per advocate was four. 21,000 shares had been generated via Facebook, Twitter and email and a 16% conversion rate was driven by the program.
  • J. HILBURN: A retail brand which was receiving many referrals from existing satisfied customers. By offering customers $50 for each friend referred and encouraging the advocates to share the offer using social media, brand advocates were identified and rewarded. Any referred customer who spent over $100 received a $50 discount on their purchase. After 45 days of running the new program, 1,000 customers had made referrals. Averaging 12 shares per advocate, the referral program produced 10,000 social shares via Facebook, Twitter and email. The bottom line result was 600 transactions which created over $250,000 in sales.
  • ROKU: specializes in streaming entertainment devices for television. With 1,000,000+ units already sold, they tapped their existing and large user database into a source of acquisition. Sales increased 30% and the number of monthly referrals is now around 10,000 per month.
  • SENDGRID, a cloud-based e-mail provider, contained a simple offer for existing customers which could be shared socially. The offer was made to existing customers to share referral links. This meant that when any of their referred friends became new paying customers of SendGrid, they would receive $20 cash and the referred customer would also receive a 25% discount on their first three months. SendGrid achieved a 111% ROI after six months of running thel program and a 353% ROI projected for the first year of the program.
  • STARBUCKS: Since 2008, MyStarbuckIdea.com has been advocate-driven idea tank where Starbucks drinkers submit ideas for new products and coffee concoctions. It has worked as a hub for all Starbucks customers to share all their ideas, suggestion and even their frustration.  “We used to launch a new product and it cost millions of dollars. Now, when we launch a new product, we already have millions of fans,” say Chris Bruzzo, Vice President Brand, Content and Online at Starbucks.
  • SUBWAY: Sponsored the “Slim Down Challenge,”  a live speaking event consisting of some of America’s hottest speakers and celebrities. Its mission was to travel from city to city across America delivering powerhouse information that challenged your mind, heart, and waistline. They used social technologies and promotion apps to raise awareness of the Slim Down Challenge and recruit speakers. The strategy included a social competition. This was part of a full marketing strategy for the campaign. They found that 71% of site traffic that went to the registration page, came directly from Facebook.
  • WALMART: Has 34,000.000+ fans, more than any other brand on any social platform. They also have more than 385,000 followers. They post 6 to 7 times per day. They engage with fans, regularly. Last year, on Black Friday, Walmart received 62,000 posts from consumers, a rate of 42 per minute. The engagement with consumers who spread the work is getting a “marketing equivalent” of 10X return-on-investment (ROI) compared to other advertising spends according to CMO, Stephen Quinn.

These case studies cover brands big and small, B2C and B2B and show brand advocates can be found for any business if you look for them. Do they convince you of the ROI of brand advocates?

To learn more about the ROI of social media marketing, download the ebook, 166 Case Studies Prove ROI of Social Media Marketing  (80,000+ people have). It’s free on the sidebar or join our email list and have case studies like these delivered to you.

Did these case studies on the ROI of brand advocates teach something new.

Brand Influencers vs. Brand Advocates


6 lessons to unlearn from big companies if you start a company 0

Posted on November 23, 2013 by Rob Petersen

images (1)

LinkedIn sent a “Happy Work Anniversary” last week. It had been 5 years since this company, BarnRaisers, began.

After being surprised by how fast time flew, I thought about the journey; First, the failures and lean times; then, successes (gratefully), good people who build your company (through trial and error) and the achievement of milestones (most unexpected). After a short moment of reflection, I wondered: what happens from here?

Is this familiar to you? If you’ve ever started something and seen it through, it probably is. In my case, after a good number of years working at big ad agencies, I started a digital marketing agency and decided to see it through too.

One lesson learned, when you start a company, unlearn what you learned working at big companies. Much of it won’t apply. Here are 6 lessons I unlearned.

  1. PEOPLE DON’T PAY FOR HOW WELL YOU MANAGE THEIR BUSINESS ANYMORE; THEY PAY FOR ROI: When I worked at big ad agencies, I worked on brands that had advertising and marketing budgets. I once had a boss who said: “Treat your client’s money like it’s your own.” At the time, I thought it was great advice. But what happens when no one gives you money to manage. Instead, you have to convince someone why they should invest in you. This changes the dialogue  to return on investment (ROI). It’s a much healthier conversation.
  2. DON’T SHOW UP WITH A TEAM; SHOW UP WITH A STRATEGY: In many big ad agency new business pitch decks, you’re likely to find a picture of “Your Team” near the end. It is usually about 10 to 30 people. It’s intent is to demonstrate the depth and breath of resources to be applied against your business . Now, I know pictures like this scare people. Who wants a big team they have to learn what they do and wonder why they should pay for them? Your clients want to know the person or two they can rely on to deliver and execute a business strategy – and immediately get on the phone if something is not working.
  3. RELATIONSHIPS DON’T COME WITH BENEFITS; BUT SHARED VALUES: Big companies emphasize why they’re different and better than everyone else. Maybe they have the greatest depth of experience? Or range of services? The best creative. Or the most partnerships with other companies? When you start a company, you don’t have any of those things. All you have is the ability to demonstrate an interest in your client’s business and prove you share their values. I’ve found that’s enough.
  4. NO ONE CAUSES PROBLEMS. THEY HAPPEN: In bigger companies, when there is a problem, there is a tendency to look for someone to blame. When you start a company, you are going to make mistakes. When Seth Godin started his first company, two employees were having a heated argument in the hall about a problem one thought the other had caused. One blamed the other. Everyone heard it and felt uncomfortable. Seth made them stand in front of everyone in the company and apologize. Problems happen.
  5. DON’T KEEP COMPANY KNOWLEDGE A SECRET. SHARE IT AND MORE WILL COME BACK TO YOU: Bigger companies tend to believe there is something proprietary about what they know and the way they work. That’s why they got big. They get secretive believing they have a corner on knowledge. They don’t. Instead, share what you know, more people are likely to find you interesting and want to know more about you.
  6. DON’T GET SO BIG, YOU GET BAD.  “How big can we get before we get bad?” asked legendary ad executive Jay Chiat of his agency, Chiat Day, in the 1980′s. Chiat Day doesn’t exist anymore. It was acquired by Omnicom, who is now merged and called the Publicis Omnicom Group, the biggest ad agency network ever. Jay’s comment is  not only a great statement about the ad agency business, it’s direction of for any company in the early stages of their life cycle to unlearn the lessons for big companies.

We are following this direction. We founded this company on ROI and like to share what we learned along the way. If you interested in digital marketing, download our complimentary eBook, 166 Case Studies prove Social Media Marketing ROIor sign up for our newsletter. Or, be in touch. Maybe we share the same values.

Do you have any lessons from big companies you have to unlearn?

20 Facebook ad tips for the holiday season 4

Posted on November 17, 2013 by Rob Petersen




With the holidays approaching, gift gifting is about to increase, significantly, and so are advertising costs on social networks. Social sharing can have big sales impact, especially on Facebook.

In fact, if last year’s is any indication, within a couple of weeks, costs for Facebook ads are about to rise 20%-40% versus the rest of the year on the primary spending metric – CPC (Cost Per Click).

How do you make Facebook ads work harder when costs are higher.

Here are 20 Facebook ad tips for the holiday season.

  1. BE CLEAR ABOUT CONVERSION GOALS: Conversion means getting people to take the action you want. Do you want Facebook users to buy something on your site? More Likes on your Facebook page — knowing that Facebook fans tend to be valuable customers in the long run?  Enter a sweepstakes or contest? RSVP to a Facebook event?
  2. KNOW YOUR AUDIENCE: Use Facebook’s robust targeting options to focus on specific groups. The more specific your advertising segment, the more clicks your ad will get. The better the Click Through Rate, the more you save on Cost Per Click (CPC).
  3. OPT FOR “PRECISE INTEREST OPTIONS“: Get connected with people who share specific interests analogous to your brand.
  4. GET HIGHER CONVERSIONS TO SAVE ON CPC WITH HYPER-TARGETING: Start with a core, solid fan base first and engage them to get better ad conversions…without breaking the bank!
  5. CREATE “CUSTOM AUDIENCES”: With the addition of the “custom audiences” feature, advertisers are reporting higher conversion rates.  An auto company saw a 24x return using custom audiences in combination with Offers).
  6. REACH MORE FANS THROUGH THE NEWS FEED: 60 percent of all users are visiting Facebook on their mobile phones and tablets. Facebook mobile ads earn up to 2.5X more than desktop-only ads according to a study from SocialCode 
  7. HAVE FANS SHARING WITH “LIKE” ADS” “Like Ads” work just how they sound. Viewers can “Like” you ad at the bottom. They do well when they appear in the right-hand column in addition to the News Feed.
  8. GET MORE EYEBALL FROM YOUR AUDIENCE WITH PROMOTED POSTS: Promoted Posts work best with one audience: yours. Your fans already know you, trust you, and want to engage with you. Target Fans first becaue Promoted Post can  a lot like spam, especially the sponsored story that is created with it. If your Promoted Post is reported as spam, it’ll be running a lot less.
  9. MAKE COPY “SUCCINCT, FRIENDLY AND CONVERSATIONAL”: This is what Facebook recommends too. You have a headline of 25 character and body copy of 90 characters to do it.
  10. CREATE HOLIDAY URGENCY: Put holiday clues in your copy and let people know whatever you’re offering has a limited time to take action
  11. FOCUS ON KEYWORDS: Make use of the related words as close as possible. It will give you an edge against your competitors and rivals.
  12. PUT IMPORTANT CONTEXT IN YOUR IMAGE OR VIDEO: You get one shot and one image or video to make a first impression. Put important copy in your image or video so you don’t waste it. Facebook has standards so don’t make the copy take up more than 20% of the image space.
  13. PUT HOLIDAY IMAGERY IN YOUR AD: Why not create added relevance with images of the holiday that can boost relevance and time to act?
  14. TEST MULTIPLE ADS: Even the smallest change can have a a impact on the click-through rate for your ad, so it’s best to create multiple versions and test. Facebook makes this process easy: Once an ad has been created, you have the option to “Create a Similar Ad” and simply swap in a new picture or text.
  15. UPDATE YOUR WALL. NOT JUST YOUR ADS: Your ads are only as good as your Wall. If you spend a $100 on ads, but the last update on their fan page was a month ago, that’s not a smart spending strategy.
  16. KNOW YOUR BIDDING OPTIONS: A CPC strategy is all about getting the biggest bang for the buck. With the Advanced Pricing feature in the Campaign and Budget window, you can then use the CPC (cost per click) model, as well as set your own bids for the CPM model.
  17. KNOW THE BEST TIME TO RUN YOUR ADS: Make sure your updates are going out during peak hours – the time zone of your fans (for promoted & sponsored posts); he time zone of the demographic you are targeting (for display ads & sponsored posts)
  18. RUN YOUR ADS FOR THE RIGHT AMOUNT OF TIME: Continually assess the ROI (Return on Investment) of your ad so that you can remove or revise it before it starts to really cost you. Watch your CTR and when it starts to dip, it is time to change your ad up
  19. DRIVE PEOPLE TO AN OPTIMIZED LANDING PAGE OR DESTINATION: Make sure the ad directly leads to your website page that tells the potential customer what to do next.You will be throwing your money in a trash can if you do not have a converting landing page to direct the targeted Facebook traffic.
  20. HAVE ONE CLEAR CALL TO ACTION: A comprehensible call to action must be established in the Facebook advertisement itself and also on the landing website page.

We want your business to be successful this holiday season and share some practical advice on how it can be.

Were these holiday tips on Facebook ads helpful? Will you be using any of them?




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    BarnRaisers is a full service digital marketing consultancy and agency. We build brands with proven relationship principles and ROI for big results that scale.

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