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We have all noticed the explosion of SPAM since we started using email. The CAN-SPAM act slowed SPAM for a little while, but not long. In fact, the most aggressive emails we get seem to be the ones we want, Groupon Offers, Living Social deals and, most pertinent to our discussion, those that showcase content within our particular field of expertise. Direct marketers get an array of email focused around different marketing tactics, or the new webinar released by the DMA. Some of us are engaged in these emails, though I suspect many of us keep receiving them out of guilt, or some need to “keep in touch” with our profession without really doing so.

Why do we send and receive so many emails? Because the economics of email favor more interaction. The incremental cost of sending an additional email could be $0.10, $0.05 or even  nothing if you pay a set subscription price for your email platform. The return on investment for email marketing is therefore extremely high. Just 1 response in 100, or even 1 response in 10,000, may mean a positive return on investment. Even in a demand generation campaign where 1 interaction only correlates to a 10% increase in the likelihood to buy, with a product price of $20,000, that 10% likelihood equals $2,000. Therefore, if you pay $0.10 per email (which is high), then you might be willing to send 20,000 emails to get that 1 interaction, for an awful 0.005% response rate.

Do not take this article as an excuse to start spamming your prospects, because while 0.005% may be acceptable from a business standpoint, it seems morally unjustifiable. But it does illuminate the curious economics of email marketing, where incentives always point to more email rather than less. And this means email from everyone. You didn’t think that you were the only one emailing your prospects, did you? If an email recipient is properly researching different solutions to his problem, he probably receives emails from all your competitors as well. That means that, even if you maximize the response rates for emails your prospects receive, they will still receive too many emails than optimal because competitors are doing the same.

That means, to maximize response rates to your emails (clickthrus, downloads, webinar attendees, direct sales), you may need to send more or less email. Say, for example, that prospects decide who to choose by the perceived level of engagement from a prospective vendor. You send email once per two weeks while your competitor is sending emails every day. That difference in engagement may lead your customer to believe that the competitor has more supporting material, and thus better products. But what if one of your prospects just cannot stand the aggressive communication? Then your competitor’s email series will turn him off, and you may end up with the sale.

You may be thinking, “But I don’t know what my competitors are doing.” And you won’t. Even if you signed up to receive every email they send, the combination of activity-driven triggers on a competitor’s site means that there is no way you can figure out how they approach various prospect segments in your market.

So you’re stuck. You and your competitors send more than enough emails to your prospects, knowing full well that you are competing for his attention. That is the economics of spam, and it is leading marketers to the sort of anecdotal judgments about email marketing that should have been long banished by more effective analytical tools.

There is an answer, and that is to survey your prospects and customers. After nurturing prospects and customers for a certain period of time, ask them questions about which other competitors they considered, and who else they are receiving email from. Conceptualize your demand generation strategy so that you can divide it into attributes, allowing prospects and customers to score those attributes vs. competitive marketing programs. You will notice differences — in scores by competitor considered, between customers vs. prospects, from segment to segment, etc. All these variations will point you towards your own competitive advantages that your marketing should showcase, and the weaknesses you can work to improve.

Market research is somewhat more subjective than measuring exact response rates, or correlating views of certain content to direct sales. But in sacrificing objectivity, you will start to look at metrics that really matter instead of those metrics which are just available. It is always better to find inexact answers to pertinent questions, than exact questions to irrelevant answers. And with ever more email being sent by more and more companies, simple clickthru and conversion rates are becoming less relevant every year.

As a publisher you may be thinking, why should I even worry about lead scoring? Lead scoring is for longer sales cycles, where you have to think twice before passing a prospect to a highly-paid sales professional. Circulation marketing is about finding the right tactics for prospects, then converting those prospects en masse to paid subscribers.

This view misses the multi-dimensional nature of direct marketing. Two conversion tactics may yield dissimilar results, with highly varying ROI and gross sales. The chart below shows three scenarios using three different direct marketing tactics…

In this example email yields the highest ROI ($6,000 revenue / $300 cost), direct mail the highest profit ($15,000 revenue – $3,000 cost) and telemarketing the highest sales ($50 x 600 conversions). The obvious choice here is direct mail as it yields the highest net profit.

But it feels like a missed opportunity to increase sales, if only you could capture that higher conversion rate on telemarketing. Lead scoring helps you have it both ways. You can profile best-performing prospects by different factors, then use those factors to determine who will receive higher-cost marketing. To illustrate this, assume that prospects with different levels of web activity convert to paid subscribers at varying rates:

You can approach more active prospects with costlier marketing. Assuming that your segment divides nicely into thirds, you could email low-quality leads, send direct mail to those scored with medium activity and call those with high activity, with the below results:

Using this simple strategy, we can add “Mixed” to our list of promotions below:

In this case, email still yields the highest ROI, but a conversion strategy utilizing mixed tactics per varying lead scores maximizes sales and increases our profits from $12,000 (direct mail) to $24,900 (sending email, direct mail or telesales based on lead score).

When a lead stems from a source with poor conversion rates, or has a poor demographic profile, then you would score him low and send campaigns up to a certain cost level where ROI remains acceptable. When another lead comes from a better source or has a “buyer’s” job title, he could receive expensive follow-up efforts like direct mail or telemarketing. Maybe some combination of the two converts at an even higher level, enabling you to conduct multiple, multi-channel follow-ups over an extended period of time.

Incorporating web activity can help you score with better data than even demographic or source. When an identified prospect clicks on a certain piece of content, you can use that click to showcase a related information product. And the more activity a prospect takes, the higher up the chain you can send them so that an expert, expensive sales representative may even get such a great list of prospects that she can make a huge profit, even at higher cost.

Think of lead scoring as a segmentation strategy, but one that breaks out your segments to the most granular level, allowing you to measure how each segment performs according to various tactics. Putting that information together, you can run multidimensional campaigns to prospects based on compiled profiles. If someone clicks on an email, send him another. If he clicks twice, call him. If he expresses some interest, follow up even more.

In addition, as information providers, you may want to expand into corporate sales of information packages. But how do you qualify your thousands of subscribers as corporate leads? By adding subscribers to various nurture tracks, you can send them “meta-information” about your content, gauging their interest by talking about a group subscription. Their activity in that series can then build up a lead score, which you will then use to qualify for a sales follow-up.

Build your lead profile on a combination of demographic profile and recent activity, and then report on the differing response rates of each group across different marketing efforts. Using those results, you can then construct a lead scoring program that will preserve ROI where necessary, but go for profitability when the opportunity presents itself.

Below are two related articles:

• Using Marketing Automation to Sell Group Subscriptions
• Moving Beyond Implicit and Explicit Scoring

When you develop an automated nurture track, you should think about the specific goals of the track in question. You don’t want to send a series of emails to a prospect for no reason. But you also don’t want some of your prospects to be left behind with no communication whatsoever. You do want to have a plan for every person who fills out one of your forms based on who they are, what they need and where they are in their buying cycle.

Nurture tracks

Below are lists of general types of nurture tracks you should be using today to keep in touch with your prospects as they become ready to buy.

• Welcome: When a visitor to your website fills out a form, he has identified himself. He has said, yes, I am interested in your company, and I trust you enough with my email address for you to send me more content. Your first email will be the form’s auto-responder. If it’s not a contact me form, they don’t become a lead right away. But you want to stay in touch for as long as possible, not in an overbearing way, but just to let him know you’re there. So you send him through a welcome program, experimenting with different variations of content with the hope of fast tracking him into a faster nurture track with more calls to action.
• Inform: A prospect has been welcomed, she receives your emails once every two weeks and has finally expressed interested in a particular area of your content. Start sending her follow-up efforts focused on that content. That way she’ll get the information she needs to make her decision, and she’ll start trusting you as her preferred source of advice on that decision.
• Engage: A prospect has expressed interest, and now you want to nudge him towards a buying decision. Speed up the process by providing those pieces of content that relate to buying your product or service. Once he takes an action in this track, you may be ready to call him with a sales pitch.
• Wake: Some prospects will come to your site and then go inactive. For these prospects, try anything new to see if they take an action. You want to send periodic efforts to shake them up; wake them and push them into one of your other tracks.
• Follow up and assess: When someone becomes a customer, send them some follow up materials to judge their satisfaction or if they need any customer service help. Don’t just close the sale and forget about them.
• Refer: Make sure you have nurture campaigns built around your referral program as well. A happy customer is worth more than a single sale.

Types of content

The types of content you create can be tagged with the above criteria. Maybe one of your demos is meant to really engage a prospect, or a white paper to inform them about the specifics of one of your products. Below is a list of content types and where they likely fit into the above nurture tracks.

• White papers & articles: Usually informative, these pieces of content are text-heavy and non-biased. In building your brand as a thought leader and trusted advisor, a white paper or article shows prospects that you just want to educate them on your area of expertise.
• Videos: Also informative, a video is much like a white paper, but in a different medium. In fact, you can easily repurpose the content of a white paper to make it more interesting to different types of prospects.
• Demonstrations: A product demonstration is meant to engage your prospects. When they look at how your product works, they are more interested in buying what you may have. Include this sort of content in your engagement nurture tracks.
• Price guides: Again, when someone is looking to buy, they want to know pricing and offer structure. Do you offer a free trial or money-back guarantee? If a prospect looks for this, it’s time to score them well and send them to sales.
• Case studies & surveys: A case study or survey will fall between informing and engaging your prospects. Both case studies and surveys show how other companies in the prospect’s niche have succeeded using your product. They can each help make the case to purchasers that you offer value for the price you’re charging.
• Events (webinars or live): Any prospect attending an online or live event is engaged. This content can be repurposed demos, a presentation of survey results on a particular industry or general information on your company’s relationship to your prospects’ niche.

Conclusion

When you nurture prospects or send them different pieces of content, you’re leading them down a certain path that will hopefully end in a successful sales call. But don’t come on too strong. If someone downloads a whitepaper on your site, start slow with a welcome track. If they express more interest, push them into an informative or engaging track that will speed their way to different decisions along your buying cycle.

You want your prospects to take actions that raise a flag to sales that they are a hot lead, looking to buy. You can even design your tracks and assets to raise that flag with some information on how to respond. If someone is looking at price guides, call them with an offer for a free trial. If they view a demonstration on how your product helps a particular industry, call with a case study in mind to reinforce where you can help. In this way you can educate your leads to about the right decision before selling to them.

Marketing automation platforms encourage one way to score leads. They use implicit and explicit scores, where implicit score represents activities taken by your leads and explicit relies on the exact values in fields like title, company and demographics. But is this the best way to score leads? With all the capabilities inherent in marketing automation, why are we tied to only tracking two scoring dimensions?

Today we develop lead scoring strategies by thinking the way our sales people think, assuming certain factors mean more than others and going with those for implicit/explicit scores. We only pass leads where both scores are high enough to warrant a sales call.

But there are more dimensions on which to score leads, and we need to get past some of our assumptions. Most importantly, by splitting out different parts of your scoring, you’ll be able to better track and report on your programs. How can you do this?

1) Brainstorm

Conceptualize the different factors that make a lead good for follow up. Your sales people know the most about this, so start asking them questions. How would they describe their best leads? What activities do they take? What characteristics do they share? Can you incorporate those thoughts into your lead scoring program? Below are some examples of factors to consider (most of them are already a part of your current scoring systems):

• Decision maker: Does the lead have buying authority? Will they be the one who makes the final decision?
• Job title: What is the person’s job title? Does it help you differentiate people who you think would be good leads?
• Industry segment: Are there certain industry segments that your company sells more to?
• Individual visits (overall or by content type): As an individual, did the contact visit a lot of web pages? Can various web pages be classified together in a way that makes sense for lead nurturing or sales follow-up?
• Individual downloads (overall or by content type): Did the lead download different white papers making her a more likely sale?
• Events attended: Does the lead show a lot of interest in your company’s webinars or live events?
• Company-wide activity: Sometimes a decision maker may not do their own research on what they want to buy from your company, but others may. Tracking overall activities by company (or account) may help to identify good leads.
• Company-wide spend: How much does a company already spend with you? If they spend a lot, but submit a form, there may be a good opportunity to up-sell.
• Top companies (by domain, company name, etc): You may have a list of top companies you definitely want to close. Membership in this group of targets could be a great way to score your leads.
• Form submissions: Some forms may be better than others. Score “Contact me” forms higher as they show real interest in speaking to a sales person.

2) Choose which factors seem to make the most sense for your business and score on each separately

Wait a minute, you might say. Why would I break down my explicit and implicit scores into their contingent parts? Because you want to isolate different variables and see what works.

From the above, perhaps you choose decision maker, industry segment, individual activity, company-wide activity and top companies. To score on all these, make a matrix …

Your leads will be scored 1, 2 or 3 for the five factors above. But how will sales know which prospects they should call? At the beginning they won’t because you need to test which of the factors above really makes a difference to your conversion rates. You want them to call all leads, or perhaps all leads who submit a “contact sales” form and a random 25% from the rest.

3) Report on the results of your scoring

Once you decide on the factors above and implement your scoring program, report on conversion rates by factor, by rating. Here you’re looking for correlations – does a higher decision-maker rating result in a higher conversion rate? What about industry segment? Below is a sample chart on what your results could look like.

Conversion rates by factor by rating

In this example, the factors for decision maker, individual activity and company-wide activity point to better leads. If you have enough revenue and cost information, try figuring out your ROI per factor per rating. You may find that all your leads have a positive ROI, in which case you’ll want to send all to sales. But flag better ones for quicker follow up.

4) Use results to improve your ROI

With this matrix of results, you can isolate various conceptualizations you’ve made and see if they work in the real world. If they do, configure your marketing automation system to only send to sales based on those scores. But if they don’t make sense, replace them with other ideas to continually refine and improve your lead scoring program.

Conclusion

Just because different platforms use template lead scoring programs showing implicit and explicit as your only dimensions, don’t feel like you’re stuck. You can use as many or as few dimensions as you like to score your leads. You may come up with 10 areas you think make a difference, but find in reporting that only 3 actually correlated to statistically significant results.

Overall, make sure you score leads based on what makes them a good lead rather than on what others tell you is a good scoring system. Brainstorm various ideas, test them, get results and use what really works. Your company will reap the benefits.

When you survey prospects and subscribers, you try to profile them, hoping to focus a message around what they want from your product. Profiling can also clarify your offering to advertisers. The more description you can give about your subscribers’ buying behavior, and the better you can slice this out by profile, the more worthwhile it becomes to advertise in your magazine.

In segmenting your subscribers during a survey, where do you start? It helps to think in terms of the profile data on which you could act (or on which your advertisers could act). Basic demographic data like sex, marital status, age and income can be useful for large-scale branding initiatives that cover all households in a certain geography. But if you’re a specialty publisher, you need to be more specific with targeted demographics like job title or industry sector. In fact, there is a whole array of data you can acquire through effective market research, which are not limited to demographics.

• Customer segments: Do subscribers in different stages of your customer life cycle value the attributes of your publication differently? If yes, develop different content for approaching customers who are prospects, free trials, have subscribed for 6 months, or for 5 years.
• Behavioral: This data applies to some action your subscribers have taken. This includes segmenting responses by web pages viewed, original source, or whether they have showed interest in other publications. In addition, segmentation applies to buyer behavior that helps advertisers. For example, are certain types of subscriber more likely to look at advertising, or be more inclined to purchase certain products? Does this change by season, demographic, magazine, or by some other dimension?
• Psychographics:  Some data offer a psychological profile of your subscribers. They may consider themselves as part of a generation (ie. Baby Boom, Generation X, Generation Y) or belong to a group that defines them in a way that a simple demographic does not (ie. Veterans, the LGBT community, Cosmo readers, Retirees, Environmentalists, etc.).
• Demographics:  These are basic data like age, sex, marital status and income. Large consumer magazines trade on this type of information, targeting huge segments of the population at large for new subscribers and advertisers.
• Business demographics: B2B specialty publishers will want to use data like job title and industry sector to segment subscribers. For example, what do pulp and paper industry business intelligence analysts value in a newsletter? Or to which associations do executive secretaries in service industries typically belong?

In terms of market research, this profile data will be transcribed against the rating questions you include in your survey. You will start to know that sales professionals really value competitor reports while C-level managers want industry forecasts. Or that retired men particularly enjoy reading about home improvement. While segmentation of your market is a useful concept for other forms of market research like panels and focus groups, if you want quantitative validation that your ideas about a segment hold true among everyone in that population, then you will need to conduct a subscriber survey. And as you design your questionnaire, make sure to ask questions that will give you relevant dimensions with which to segment your subscribers. Some rules apply:

• Don’t ask what you already know: If you ask your subscribers for a job title classification when they originally subscribe and can track that data back to responses, then there’s no reason to ask it again during a survey.
• Don’t ask what you have no possibility of using: If there is no way that you can differentiate marketing tactics for different segments, don’t ask the question. Survey space is precious. Although we may be curious about some inane demographic or another, only ask for it if you can actually use the information.
• If you ask something very personal, leave an opt-out option: Some subscribers may not want to share information about their income or lifestyle or race. If you have a survey question that is more personal, then add in the option “I prefer not to say.”
• Don’t be afraid to identify the needs of a tiny part of your audience: Some marketers think that they only attract a certain type of customer, so why even try to delineate responses by some other dimension. However, a small segment of subscribers could lead you to a new opportunity; you can use different messaging to attract that audience to your existing publication, or even launch a new publication catering to that particular segment.
• Slice your data any way you can: When you’ve finished collecting your survey data, slice each question by all segments. You may be surprised at which segments correlate (or don’t correlate) to different ratings.
• Don’t assume anything: Just because you believe something to be true doesn’t make it so. At all companies, anecdotal evidence can take on the mantel of established fact. It gets repeated so many times that everyone believes it without checking the evidence. Market research may challenge these assumptions. Let it.

Now that you’ve thought about how to conceptualize your subscriber segments, you’re ready to include the right questions into your survey, and be ready to slice satisfaction, importance, determinance and any other measure by these segments. You can then approach various types of subscribers with content relevant to their needs, enabling you to generate new business and retain existing customers.