Travel Goods, Fashion & Accessories - Summer 2010

Page 31

Marketing e ee

marketing impact by sales alone? The answer is “no” because your marketing could have been wildly successful even though sales looked lacklustre. Putting Results in Context

Here’s an example to illustrate. In order to drive sales, a one-day event was scheduled for the 3rd Saturday of the month. At the end of the month, management looked back at Saturday sales and the results were as follows: Sales were up on the 3rd Saturday compared to the 2nd and 4th Saturday, but not by much. Furthermore, sales on the 3rd Saturday were exactly same as the 1st Saturday – when there was no event. Based on these sales results, it would be reasonable to conclude that the marketing didn’t work. Of course, we sometimes take solace in the notion that sales could have been worse if we hadn’t invested in marketing, but this argument is cold comfort. Unfortunately, this is exactly how most retail marketers measure the impact of their marketing investments. Traffic and Conversion Change Everything

In order to truly understand if your marketing investments are paying off, you need to understand store traffic and customer conversion – that is, how many prospects visited the store (traffic count) and what percentage of these prospects actually made a purchase (conversion rate). Now let’s look at the same four days,

but this time we’ll compare the traffic and customer conversion rates by day. The sales results don’t change, but how we feel about them certainly does. On the 3rd Saturday customer traffic in the store was up dramatically compared to the other days. T his suggests that the marketing was indeed effective at driving prospects to the store. Unfortunately, the customer rate dropped significantly. The good news: the event was very effective at driving prospects to the store; the bad news: the store was so busy, staf f couldn’t serve all the prospects and the conversion rate dropped dramatically. The net result: overall sales looked about average. Without counting traffic and measuring customer conversion, this retailer could have never known that their marketing was effective. As illustrated, analyzing sales results alone masked what really went on in the store. Setting the right Marketing Objectives

When you invest money in marketing, one of three things should happen: (1) More prospects visit your store; (2) Your customer conversion rate increases; and/or (3) Some combination of 1 and 2. Generally, you should expect to see more prospects come into your store if the marketing effort was successful. However, if

you did an exceptional job of targeting the right prospects, it may be that overall traffic volume didn’t go up dramatically, but conversion rates went up which s u g g e sts t h a t yo u r m a r ke ti n g w a s ef fe c ti ve at d r i v in g m o re q u a li f i e d prospects into your stores. If neither of these happened, then you need to re-consider your marketing strategy – clearly it’s not working. Why Retailers are turning to Traffic and Customer Conversion

Business continues to be tough, budgets are tight, and retailers can’t afford to waste a nickel of precious marketing dollars on activities that don’t deliver results. Leading retailers are turning to traffic and customer conversion analysis to understand what their marketing dollars are delivering. While there is an investment required to buy traffic counters and analyze the data, in the end, you’ll save money and develop more effective marketing. If you rely on sales data alone to guide your marketing decisions, you’re flying blind. Traffic and conversion data will put your results in context and help you more effectively measure marketing results – and a lot more. e Mark Ryski is Founder & President of HeadCount Corporation, a retail analytics company and author of “When Retail Customers Count”

Summer 2010 31