Direct Response Radio Conversion
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Direct Response Radio Conversion |
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Poor Conversion is the leading cause of Misery among Direct Response & Retail advertisers.
Radio-driven Impulse Shoppers are curious and somewhat more imaginative than most people. (They can "see" your thing on the radio!) They are, however, no less impatient. During the first few days of any new campaign, your first responders will be among the most impatient people on earth!
► Leverage. Estimated Conversion Rate is one of the key metrics you'll use in my Free Planning for Profitable Radio Advertising Excel workbook. Get one before you leave this site:
I. People Do Judge Books by Their Covers. A succinct, to-the-point well-produced ad or commercial creates the expectation of a succinct, to-the-point, well-produced Thing. Your TMs, web designers, or sales force should greet the prospect with a succinct, to-the-point, well-produced Close, lest your potential sales vanish into the thin air from when they came. Few on-line shoppers, for example, have the time find their way from a cluttered home page through labyrinthine navigation protocols to a 1,200-word sell page to a shopping cart. Every required action - a scroll-down, a button click, even an eyeball movement - loses prospects and wastes money.
So moaned a wistful client in 2007. Three days of network radio drove in 1,354 clicks to his website, a cluttered maze of tacky Buy Now Save Big blurbs and busted links. Average TSOL 16.5 seconds. Twenty two sales @ $35.00. 1.62% conversion. A very expensive lesson. A simple site that works is preferable to a complex site that doesn't. However, IT guys are notoriously infatuated with Eye Candy & Neato Code. Only you can enforce KISS. II. All Purchase Decisions Are Driven by Emotions and then Rationalized with Facts. A good radio commercial, based on a solid Communications Strategy, should kindle the correct emotions. It should drive inquiry from this week's Cume Quota while building awareness and intent-to-try among next week's and next month's prospects.
Conversion Rate is simply Sales/Inquiries. In 1-800, click-to, dealership and retail conversion, there are three species of Inquiry. The more adroitly you deal with each, the higher the conversion rate. DOAs. Dead On Arrival. Accidental tourists, kids, cranks, confused, wrong numbers, no credit cards, tire-kickers, passersby... DOAs are 10% to 12% of all 1-800 calls, 30%-50% of home page hits, half of dealership ups, and 98% of retail shoppers. You don't want to waste much time on them, so weed them out politely and early. In most case, you should not count DOAs as bona fide Inquiries. RTBs. Ready to Buy.
For Drivers, the main issues are Price & Time. "How much? How fast does it work? How soon can I get one?" Drivers hate to waste time on the fine print. For Expressives, the main issues are Time and Fun. "How soon can I get one? Is it really a kick?" Expressives hate boredom. Don't bore them. NMIs. Need More Information.
Analyticals love the fine print. They actually look for Gotcha Excuses to bail out of a possible error. Amiables want to be loved and fit in with the crowd. The popularity of a brand is critically important to them. The proportion of DOAs, RTBs and NMIs is largely influenced by the degree to which the general public is familiar with category products, details, and prices.
Do you see yourself anywhere on that list, hmm? Leverage: In Direct Response Radio
► How much does the media cost per gallon? The arithmetic is fairly simple. GM/C=X. (Click the link if you're a first-time visitor. Read. Return here.) Of the three variables, Conversion (C) exercises the most leverage on Media Cost per Sale and total revenues. An example: Say you spend $5,000 on radio and field 400 calls. Your cost per call is $12.50. Your Media Cost per Sale, though, depends on the percentage of callers your telemarketers convert to buyers:
If you plan do any future business with today's customers, initial Conversion rates exercise tremendous leverage on total revenues. Another example: Say your average first-time sale is $25.00. Half your customers like the brand well-enough to buy it again. Of them, 85% become regular customers and generate, on average, $100 each in downstream sales. Today, your initial Conversion rate is 10%. If you improve CI just 2%, you feed 20% more first-timers into the mill and increase total revenue by 20%! Study this chart carefully:
At 10% CI, 100 customers generate $8,050 in revenue. At 12% CI, 120 customers generate $9,600 in revenue, all other things being equal. What happens if you improve CI, CII and CIII 2% each. See Back End, below. Slickify Your 1-800 Telemarketers.
DOAs. Dead On Arrival. A good :20 to :40 second loop tape should greet all callers with a brief recap of your ad message. (Try to avoid "Our menus have changed... press 4 to speak to an operator.") Loop tapes weed out most kids, cranks, and wrong numbers. After ten to 20 seconds, a trained telemarketer answers every call expecting to speak to an RTB or an NMI. TMs should listen for the speed and timbre of the caller's voice then go to the correct script for each. RTBs. Ready to Buy.
Drivers usually want to know the Price and delivery time ASAP. Give them both, perhaps after a few bullet-point facts. Follow with a Positive Option close, such as "Would you prefer VISA or MasterCard?" Expressives enjoy life and abhor boredom. Once again, a few bullet point facts followed by a pleasantry, chuckle, or mention of how much [fun] the thing will be. Positive Option close. NMIs. Need More Information. NMIs speak slowly. They are usually Analyticals or Amiables. Analyticals may be a bit gruff. Amiables are warm, but often a bit timid. Try to imitate their cadence. Analyticals will, given the time, ask you 328 questions about the most insignificant details. They're actually looking for a Gotcha excuse to bail. Pepper them with jargon, performance statistics, reputable third-party endorsements... A fusillade of incontrovertible facts will help overcome their innate fear of making a mistake.
Before you advertise on radio, or in any other media, review your current in-bound telemarketing scripts, especially the opening cells. Re-write the first two minutes to fit the Three Species & Four Personality Types that make up 100% of your inquiries.
Slickify Your Website.
But most first-time visitors size up a site in eight seconds or less. "Where's that Thing?" Up to 40% bail out in less than a minute. A few, with time on their hands, may well visit several pages, read up on your corporate history, even bookmark the site, then move on. Most sales come from people who hit your site, see what they want, read up a little, and proceed to check-out. Average TSOL: Two to Five minutes. Think Radio-driven prospects are not looking for a KeyWord phrase. They're looking for the thing they just "saw" on the radio. Assume they are RTBs! What are the last few words in your radio commercial before the Call To Action? Those should be the same words a visitor sees when your page loads. Large type. Bold. Right up top. Does your radio copy dramatize the emotional pain suffered by a prospect? Show a picture of that pain. Right up top. Does Your Thing come in a box or a bottle or an e-book? Show a picture of the package. Right up top. Is Your Thing an ingestible? Or is it made from a recipe of ingredients or parts? Somewhere on your site surround a beautiful product shot with links that launch detailed flyout pages on each component.
The main objective is to reassure curious radio listeners that they clicked to the right place! Here are the top 250 pixels of Dinovite.com. Perfect. 18.5% UV1 Conversion. 
UV1 Conversion. Many web operators divide total orders by total clicks to get a discouraging 1% to 2% overall conversion rate. UV1 Conversion is more useful, more accurate, and much more encouraging! Divide unit sales or orders by the total number of Unique Visitors who stay on your site for 1 minute or more. Using Google Analytics, or a similar tracking program, determine the average number of Unique Visitors per week. Subtract those who stay on your site for 1 minute or less. The idea is to eliminate DOAs, the quick-hit-looksees with whom you have zero chance of doing business. Then estimate or ask Google Analytics for the number of times a UV1 visits your site before he or she buys. Many people hit a site 2 or 3 times before they fork over their CC info. Thereafter the arithmetic is pretty simple.
UV1 C should probably be in the 8.0 to 18.0% range before you venture into Direct Response Radio. (See Leverage above.) If you cannot slickify your corporate home page, put up another page, with a different URL, that closes radio-driven inquiries. In Streaming Radio, prospects can click a banner on their media player and go right to a custom-built landing page on your site, bypassing all the Eye Candy and links to elsewhere.
Slickify Your Store!
So how do you measure the impact of radio advertising? Cash In v Cash Out? Traffic counts? On-Sale sales? CC receipts from cross-town ZIP Codes? "Heard you on the radio..." comments. All of the above! Price-item advertising is hard to do in radio. People don't absorb prices, percentages or numbers all that well through the ear. You're better off selling the inherent value of your higher-priced products.
Naturally, I got fired. "Radio doesn't work! Too many cash buyers! Not enough get-me-dones!" Mostly, though, Clarence missed seeing those BIG SALE TODAY ads on his prospects' front seats. Make sure your floor guys have all heard your radio spots before the doors open. Ask "ups" what brought them in today. If you run a jingle, play an instrumental version on the PA system. Use the same lingo and "love words" in your NP and radio. Keep track of first time buyers and be-backs.
Mostly, pay attention to the cash register. Slickify Your Bar Codes!(?)
But it's very difficult to track Aisle 5 Conversion because stores don't normally monitor the number of people who cruise Aisle 5. They do, however, keep track of total store traffic. You can easily divide weekly (or purchase-cycle) unit sales by weekly shoppers to get a rough idea of Bar Code Conversion.
Say you buy 100 GRPs in a market. Two or three stations deliver a 40 reach, 2.5 frequency over a 25-day purchase cycle. You can reasonably assume that 40% of regular shoppers will hear your spots. Assign any sales increases to that 40%.
Going in, you pulled a .5% Bar Code Conversion (BCC). You sold an extra 800 units, raising overall BCC to .66%. But 60% of shoppers didn't hear your spots. They bought at the same .50% BCC. The 40% who did hear your spots bought those extra 800 units. Their BCC was .90%. Use BCC = .9% to plan your rollout. Tiny percentages are often hard to read. In the examples above .50% and .90% could be misread as "five percent" and "nine percent." You can avoid the confuse by dividing BCC into 1. 1/.5% = 200, meaning "200 shoppers per sale."
GM/C = X becomes GMC=X.
Leverage: ...and The Back End is Queen. CI ≥ CII ≥ CIII! CI Conversion. The first sale is always the hardest and most expensive to make. The advertising has to kindle the right emotions. The TM-Web Design-Floor Sales-Package Design team have to deliver just enough rational facts to close the sale. CII Conversion. If first-timers can get over their natural reluctance to try anything new, and they actually like Your Thing... you can encourage that second sale using call-backs, e-mail, direct mail. You can also Flight Your Radio to coincide with average purchase cycles. CCIII Conversion (AKA "Retention"). The third and subsequent purchases become more a matter of habit than persuasion, so your advertising should always include a primary sell as well as a Try Now! call to action.
The Total Downstream Value of a new customer is a function of
Radio is not Conversion is King. The Back End is Queen. Properly addressing the peculiar needs of Drivers, Expressives, Analyticals, Amiables, DOAs, RTBs, and NMIs is a lot cheaper than buying more media. And a lot more profitable. Estimated Conversion Rate is one of the key metrics you'll use in my Free Planning for Profitable Radio Advertising Excel workbook. Get one before you leave this site:
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© 2011 PETER A. BURKHARD (407) 895-3092) peter@burkhardworks.com |
There's no better way to ruin
a perfect radio campaign than to drive willing prospects to a
telemarketer, web designer, or sales rep who cannot close the sale.
"Gee, we spent five grand on radio and didn't
get enough sales. Maybe we should try TV?"
Conversion is
the process of delivering
just enough rational information to shoppers to turn a profitable percentage of them into customers.
Direct Response advertisers normally measure Media
Cost Per Sale using CICO (Cash
In: Cash Out.) But MCPS is always a function of three
dynamic, semi-independent
variables, whether or not you choose to track them.
Most 1-800 telemarketing firms or staffs meet and greet callers using the same
scripts. They convert 12% to 32% to customers. Average time on the phone
varies from :10 to 15:00.
However, TMs can increase conversion by treating DOAs, RTBs, and NMIs
differently.
RTBs speak quickly. They are usually 
Amiables want to be sure that lots of other people have bought Your
Thing, so lead off with some mention of its popularity. Focus on
how Your Thing will improve the caller's status among family and
friends.
Many web designers build vast corporate sites
using standard templates.
They stuff a little text content into complex layouts loaded
with drop-down menus, flash, buttons, banners, and links to elsewhere in
the corporate empire. 
!
Not 
!
Dealers & Retailers whose bread & butter is price-item newspaper
advertising are often reluctant to try radio. Nobody walks into a
store or dealership with a big circle drawn around a radio ad!
I once bragged to a local Chevy Dealer that I could increase his sales by 18% in eight weeks without increasing his ad budget one penny.
To do so, I diverted some BIG SALE TODAY! newspaper headline ink into radio. Six weeks later,
Clarence had his biggest weekend ever. All his loaded Camaros and Pick-Ups were gone.
When you
People don't listen to the radio for KeyWord phrases. Mostly they
listen to music or the news. If your commercials stand out from
the Daily Drone of Urgent Announcer copy, you can field a steady supply
of Inquiries.
