Weak math leads to weak marketing plans

I spend a lot of time with iPost clients and prospects, helping them maximize their return on marketing dollars.  So I read (and write) a lot of marketing plans.

Here's an uncharitable view of a typical email marketing plan:

1. Make a wish for stronger response and a bigger list.
   
2. The budget will be the same or smaller than this year's, because we can't reasonably justify a bigger spend.  After all, we're making money now, and spending more is a risk. So let's spend less, and if we fail to improve demand, at least we're lowering costs.
   
3. We'll use the technology that we're already comfortable with, because it's worked all right in the past.  Maybe we can find cheaper outsourcers.
4. We'll try some new "best practices" content techniques, because that doesn't add to our costs and it's pretty easy.

This isn't planning for success, it's making wishes and covering your butt. Businesses that run this way end up being surpassed by competitors who can make calculated risks and generate incremental demand that's many times their incremental spending.

The key to a successful marketing plan, like any business plan, is in making calculated risks.  But to make another uncharitable generalization, marketers are typically not comfortable with, or even aware of, the math required to perform this calculation.

In my next post I'll lay out the bedrock math you need to move beyond making wishes to an email marketing plan based on numbers, including justifiable spending and achievable goals.

Customer flavors

Kevin Hillstrom draws some interesting boxes around his five flavors of customers. Since we do retention marketing, we at iPost almost exclusively focus on the brand-aware customer boxes (Kevin's "organic" and "begging" buyers).  It's a great place to be, since we leverage that opt-in permission to generate 40x - 50x ROI in the email channel for our clients.

But we can even do quite a bit better:  if you could place all your email subscribers at opposite ends of a organic / begging spectrum, you're able to:

• Stop discounting to the organic, brand-enthusiast customers (they're going to respond strongly anyway)
• Identify the at-risk "begging" customers and work to win them back with targeted  email outreach.

We do this now with our Autotarget behavioral analytics system.