Grown-Up Marketing

AOL—love 'em or hate 'em, they've always been a marketing-driven organization. It's gotten them where they are, and you can learn from their example.

by Doug McDonald Director, Affiliate Programs, The TUCOWS Network courtesy of HowToSell.net [January 28, 2000]

Say what you like, but I have always been a staunch supporter of AOL. Please don't throw anything at me. As a competitor I've cursed their existence at times, but buried deep inside I've always harbored a little piece of envy at their successes. As such, I was in an odd way happy to hear the news of their recent merger. I am not crazy, let me explain.

I remember when AOL was an "also ran" in the emerging online arena. CompuServe was the undisputed leader and seemingly had a stranglehold on the business. Now they are a division of AOL.

Over the years AOL has done many things right. One of them is that they have never let the things they have done wrong get in the way of their ultimate agendas and goals. The announcements of recent weeks are a testament to this perseverance. Through tenacity and an overwhelming desire to succeed, they have.

Funny how that works.

To a very large number of the Internet users, America Online is the Internet. This can be attributed to the outstanding job they have done building their brand. Granted, having the size of marketing budget that they are blessed with has been a key factor. Still, the reality still remains that no amount of money can overcome poor execution, it can only magnify failures. I am glad I did not have a bigger budget to really blow up a couple of the mistakes I have made over the last few years.

It's not just about money
Next time you find yourself wishing you had access to even a small percentage of AOL's marketing war chest, you might want to examine the processes surrounding the effective use of that money. Understanding how it is that they not only decide how to spend those dollars but also the methods employed to accurately determine their individual successes and shortfalls is an important step towards ensuring that the funds will be available again in the future.

Marketing and Sales initiatives that do not track and monitor effectiveness are a failure. Whether they generate incremental revenues or not, without a means to quantify their effectiveness, how can they be justified? How many effective marketing and sales initiatives have been canceled because there was no evidence of their success? How many hundreds or thousands of customers have you not gotten because of this? If you had done your research up front, or if you had been tracking the responses, you would know the answer. More importantly perhaps you would have never implemented the program in the first place.

Know where you're starting
Just prior to penning this, I was doing some market analysis and projections for a niche product. As a result, statistically I now know what is needed in order to meet and exceed the minimum revenue objectives.

How many customers do you need to comfortably profit from $1,000 in advertising? As a base figure, that becomes your minimum requirement. The profit level that you are comfortable with is for no one else but you to determine, so you alone need to determine it. With this knowledge in hand you can begin to separate the wheat from the chaff but only if you know what your acquisition rate is.

Keep track of where you're going
Tracking— There are many explanations and descriptions, but I look at it as the place where art and science meet. Basic tracking is really very easy. It is not always easy to conceal but it is simple to implement. Here are a couple basic methods for the online world.

The Offer Code— Made famous by direct mailers and then later by the television industry it is generally used in a form as simple as; "If you call within the next 10 minutes and mention the special offer code you can get a second for half price." In collecting your new clients you will need to be a little more sophisticated. Instead of specific offer codes I suggest that you use a specific phone number. Instead of pointing all of your sales calls to your primary reception number, establish a series of revolving telephone numbers to apply to new offers. Using your telephone systems tracking capabilities you can then monitor the numbers of calls it generates. Once the program is underway, you can then start comparing your sales figures to your telephone logs and determine your call/sale ratio to better plan staffing for that and future programs.

Registration Codes— For CD offers, specific registration codes can be created and attached to the CDs you hand out. Many people blindly distribute hundreds or even thousands of CDs without knowing how many new customers actually installed them or how customers actually stayed beyond the trial period. If you don't use online signup functionality then setting the homepage of these new users to a onetime refresh page is another easy way to count the installation percentage. The best model however is to sign them up with a specific set of registration codes so that you can track them throughout their time with you and get a better picture of their true use of your services.

These systems do take some time to plan, implement, and monitor, but without something like this in place, how will you know how effective your ideas really are.

When I was young(er) I believed that the grass was always greener on the other side of the fence. Now I know that the grass is really greenest only where it is properly tended to.

Sincerely, Doug McDonald

—End