Friday, December 30, 2011

Cause Marketing Explained

Thompson and Pringle, in their book Brand Spirit, define cause-related marketing (CRM) as a partnership between a for-profit and a non-profit business for the mutual benefit of both. This form of societal marketing is practiced by any number of large companies including Patagonia, American Express, Marriott and PetsMart. Of course, when it comes right down to it, it’s not quite that simple.

What Cause Marketing Isn’t

Cause marketing isn’t philanthropy. You notice I said “for the benefit of both” earlier. When a company supports a philanthropic cause, it does so without the expectation of generating business, although they may expect a positive impact on brand equity. It also isn’t societal marketing, although it does promote societal benefits. The difference is that societal marketing is in the nature of “Don’t do drugs”, “Don’t drink and drive”, “ Stop smoking” and so on.

Benefits for Non-Profits

There are a multitude of advantages available:
  • Increased revenue
  • Enhanced visibility of the cause or the nonprofit’s message
  • Increased volunteer pool
  • Access to new audiences
  • Connections to the corporation’s network of employees, suppliers, distributors, and other contacts
  • Expertise in marketing, strategy development, and other corporate experience

Benefits for Businesses

The many benefits of cause marketing for businesses of all sizes include:
  • Greater awareness for company product or service
  • Increased sales
  • Access to new audiences
  • Competitive advantage
  • Increased brand image and awareness
  • Higher employee retention
  • Highlight to be used in employee recruiting
  • Opportunity for new strategic partnerships
  • Technical expertise from nonprofit partners
  • Training and development opportunities for upcoming company leaders and staff

Consumer Perception

According to Cone’s 2010 Nonprofit Marketing Trend Tracker, More than three-quarters (78%) of Americans believe a partnership between a nonprofit and a company they trust makes a cause stand out. When the cause breaks through, consumers are more likely to feel positively about the nonprofit (56%) and actively support it. As a result of nonprofit-corporate partnerships:
  • 50% are more likely to donate to the nonprofit
  • 49% are more likely to participate in an event for the nonprofit and
  • 41% are more likely to volunteer for the nonprofit.
According to Cone’s 2010 Cause Evolution Study:
  • 83% of Americans wish more of the products, services and retailers they use would support causes. In addition,
  • 80% of consumers are willing to switch from one brand to another brand that is about the same in price and quality, if the other brand is associated with a good cause.
  • 61% are willing to try a new brand or one they’ve never heard of if associated with a cause.

Employee Engagement

Employees are what you would call “cause shareholders”. They are invested in what their company is doing. They are willing to roll up their sleeves and get their hands dirty to support causes that are important to them. Going back to Cone’s Cause Evolution Study, “Employees who are very involved in their company’s cause program are 28 percent more likely to be proud of their company’s values and 36 percent more likely to feel a strong sense of loyalty than those who are not involved.” Companies who are not engaging their employees are clearly ignoring an untapped resource.

The Win-Win Scenario

The question now isn’t “Why CRM?” but “Why not CRM”? With this information in-hand, how can you afford not to look seriously at a cause-related marketing strategy? There’s no question that it’s beneficial to both partners for both the soft and hard bottom lines. In my next post we’ll take a look at things to consider when looking for a partner for your CRM strategy.

Tuesday, December 20, 2011

Google AdWords Bidding Basics

So...you've heard about this "new" thing - Google AdWords. It sounds pretty exciting. It sounds like you get a lot of bang for your buck. Your ad shows up on the page that is returning pertinent search results. An ad can show up anywhere on any of the pages returned. The more you are willing to pay, the better your page position will be. Page position is auctioned off, but you can get better page position with higher quality AdWords, too. You only pay if someone clicks on your add. So, what you do is tell Google AdWords what your maximum cost-per-click and daily budget is. It then places your ad accordingly and when you’ve reached your daily budget, it pulls the ad. You can make the ads local, national, or international or base it on language. Of course the broader the audience, the more money you are going to spend.

But how, exactly do you go about getting space? Well, you bid on it. And the thing is, you don't necessarily win your space based on how much you bid, but also on the quality scores of your words and landing page. Let's start with the basics: the bidding.

Bidding

You can use the Google Traffic Estimator Tool to figure out an approximate result based on the keywords you select, maximum CPC, and daily budget. The more popular a keyword is, the more you're going to pay for it. The suggested method of figuring out how much you want to spend AND maximize your profits is:
  1. Determine our maximum Cost Per Acquisition(CPA): (Sale price – cost of product = CPA)
  2. Determine conversion rate: (number sales/number of clicks)
  3. Determine value per click: Max CPA * conversion rate = value per click (expected profit from website visitor)
    Value per click is what you can pay per click and expect to break even, so naturally we wouldn’t want to pay that much.
  4. Adjust your bids so your value per click equals your incremental cost-per-click.
    The incremental cost per click is the difference between what you pay for per click at one bid versus at another bid. Not very clear is it? This table was generated using the Google Bid Simulator Tool, which is only available if you have an AdWords account:
  5. BidClicksCostAvg. CPCRevenueProfitICC
    $5.00208 $697.42 $3.35 $1040.00 $342.58$5.73
    $4.50 190 $594.27 $3.13 $950.00 $355.73$5.20
    $4.00 154 $407.02 $2.64 $770.00 $362.98$4.63
    $3.50 133 $309.73 $2.33 $665.00 $355.27$3.99
    $3.00 113 $230.00 $2.04 $565.00 $335.00$3.32
    $2.50 86 $140.37 $1.63 $430.00 $289.63$-.--

    As you can see above, the $4.00 click actually returned the highest profit, even though you got fewer clicks, but it doesn't necessarily maximize your profit. That's where the ICC comes in. How did I get that number? ICC is calculated by dividing the cost of the incremental clicks by the number of incremental clicks. Let's use the $5.00 and $4.50 bids for an example. The cost of the $5.00 bid was $697.42. Subtract the cost of the next lower bid from that, $594.27. That leaves a difference of $103.15. You received 208 clicks at $5.00. Subtract the 190 clicks you received at $4.50. This leaves a difference of 18 clicks. Now divide $103.15 by 18 clicks. The result of $5.73 is your incremental cost-per-click. If you look at the the ICCs above, the $4.00 comes the closes to your value-per-click without going over. In order to <b>maximize profit</b> you'll want to increase your bid until your ICC is close, or equal, to the value-per-click without going over.  

Generally you will pay less than the bid CPC. Once we’ve determined your CPC, you can run some simulations to maximize your profit. You may actually be more profitable paying less and getting fewer bids because the incremental cost-per-click (ICC) above a certain point may be more than the CPC.

I ran some keyword simulations with a standard bid of $1.00 CPC and daily budget of $50. In the “Est Ad Position” column, the lower the number, the better the position. The best positions are above 3.
KeywordGlobal SearchesLocal SearchesEst Avg CPCEst Ad PositionEst Daily ClicksEst Daily Cost
dog toys246,000165,000$0.692.5569.77$47.92
puppy toys33,10018,100$0.632.371.76$1.12
chew toys18,10014,800$0.571.251.7$0.97
squeaky toys9,9006,600$0.00000

There is a pretty in-depth video tutorial by Google's Chief Economist, Hal Valerian, on YouTube. If you'd rather, you can read the script.

The Quality Score

The quality score is calculated using a variety of factors and measures how relevant your keyword is to your ad group and to a user's search query. The higher a keyword's Quality Score, the lower its cost-per-clicks (CPCs) and the better its ad position. Which page we direct the user to in our website affects the keyword’s quality score as well. For instance if the end-user were to click on an ad specifically for dog toys and you send them to the pet store homepage, that might lower the quality score. That’s one of the reasons people use landing pages – to ensure the content is directly relevant to the AdWords.

Conclusion

Keep in mind that conversion rates and costs are variables and will change depending on current economic climates, seasons, keyword popularity, bidding rates and other financial and cultural factors. It's a good idea to go in and run simulations on a regular basis to consistently maximize your profits.

Tuesday, December 6, 2011

Why Nonprofits Need Social Media Strategy

When you think about it, nonprofits have been using social marketing for decades to get their message across. I’m sure you’ve heard the phrase “grass roots campaign”. What is that but a pre-social media era social marketing effort. It seems to me that the natural evolution of the social marketing strategy is the social media strategy. So why are so many nonprofits taking a “wait and see” attitude? Are they afraid of the new technology? Afraid it will get out-of-hand? Are just unaware of the opportunities?

Some of these are easy to overcome. A little education and you’re “good to go”. Some of them are a little more difficult. Without a proper strategy, for instance, it’s very easy for social media marketing to take on a life of its own. A little dabbling can be a dangerous thing if there is no direction and it can also be pointless if there’s no strategy in place to take advantage of the interlinking opportunities.

It’s Time to Get on the Band Wagon

Social media isn’t a trend. It’s a legitimate channel of marketing. If your nonprofit isn’t incorporating it into your marketing mix, you’re missing out. Do you have any idea how many Tweeters there are? 4 or 5 million….on a two-year-old platform. Facebook, which launched in 2004, has more than 150 million users, over half of whom check in every day. That’s a pretty big pool of potential to be missing out on. And I haven’t even mentioned the numbers for LinkedIn and YouTube, or the new technologies like QR Codes and mobile platforms.

Social media is a routine way to keep up with things you’re interested in. I follow several organizations on Facebook, including the author Laurell K. Hamilton, the ASPCA, Pinup Girl Clothing, the History Channel, and the Denver Center for the Performing Arts, to name just a few. I love knowing my favorite author finished 7 pages, or new stuff has gone up on a site, or if a new concert has been scheduled. I’m much more involved and up-to-date and I feel…connected to these companies. It’s definitely an emotional thing.

Role Models

Spurspectives gives us two nonprofit role models to look to: the American Red Cross and the National Wildlife Federation.
The American Red Cross has dedicated professionals who blog, tweet and produce videos, creating a presence across multiple social media channels. Can you imagine the uses to which an emergency responder organization can put Twitter? And they are taking advantage of it.

The National Wildlife Federation is another nonprofit that’s pushing its marketing strategy into the new frontier. They have four blogs, a YouTube channel, and more than nine staff members who tweet behind-the-scenes information on different initiatives.

These are just a few of the ways social media strategy can work for a nonprofit organization.

What’s In It For You

There are some easy ways for you to get started on your strategy.
  • Add a blog to your website.
  • Create a YouTube channel.
  • Set up a Twitter account.
  • Create a LinkedIn profile.
And for goodness’ sake don’t forget the metrics. All of these are quantifiable with regard to clickstreams, readers, comments, viewers, etc.

Social media opens the door between you and the community you serve. It starts a dialogue. It creates interest and loyalty. You can create awareness and interaction. It’s flexible and low-cost. That’s a big key for nonprofits – low cost. You know that.

And like any effective marketing effort, social media promotes your mission and increases understanding of who you are and what your purpose is. That’s the first step in gaining support – especially if the testimonials come from friends and neighbors with a high degree of credibility.

Friday, December 2, 2011

Creating Resonance Through Leadership Style

If you remember, in the post entitled Effective Leadership and Emotional Intelligence I promised to discuss leadership styles in my next post, but then skipped them in favor of 2012 marketing trends. This is that promised post.

There are, according to Daniel Goleman, six leadership styles and all are effective - when used at the appropriate times; however the overall impact on the situation can be seen as positive, negative, or neutral, depending on the when and where of use. That is key to effective leadership - knowing when to use a particular style in order to create resonance. This means the leader is in tune with other peoples' feelings and can use that knowledge to move them in a positive emotional direction. Truly skillful leaders are able to switch swiftly between leadership styles as the situation demands. Below is a summary of the six styles with their accompanying information from Daniel Goleman's Harvard Business Review Article, "Leadership That Gets Results".

StyleThe Leader's MOStyle PhraseDriveStyle TimingClimate Impact
VisionaryMobilizes people toward a vision“Come with me.”Self-confidence,
empathy, change
catalyst
When changes require a new vision, or when a clear direction is neededMost strongly positive
AffiliativeCreates harmony and builds emotional bonds"People come first."Empathy, building
relationships, communication
To heal rifts in a
team or to motivate people during stressful circumstances
Positive
DemocraticForges consensus through participation"What do you think?"Collaboration,
team leadership,
communication
To build buy-in or consensus, or to get input from valuable
employees
Positive
CoachingDevelops people for the future"Try this."Developing
others, empathy,
self-awareness
To help an employee
improve performance or
develop long-term strengths
Positive
PacesettingSets high standards for performance"Do as I do, now."Conscientiousness,
drive to achieve,
initiative
To get quick results form a highly motivated and competent teamNegative
CommandingDemands
immediate
compliance
“Do what I tell you.”Drive to achieve,
initiative, self-control
In a crisis, to kick start a
turnaround, or with problem employees
Negative

The more leadership styles you are able to master, the more effective a leader you will be. It's not easy to master multiple styles. Sometimes it means unlearning old habits, especially for "old school" leaders who habitually fall back on Pacesetting and Commanding styles, which negatively affect the work environment. It takes practice and perseverance. Everyone knows it is much more difficult to unlearn an old habit than it is to put a new one in place. But, like Pavlov's dog, the more often you repeat a cause and effect scenario, the more ingrained the response will become and the more likely it is you will have a positive leadership response to a difficult situation.