Analysis to Help You Stop Wasting Valuable Time

How useful would it be for you to know exactly where your time was best spent? How would it improve your productivity if you could quickly and reliably determine which customers were most lucrative for your business, and which ones were costing far more than they were worth holding on to? Fortunately, the ability to determine exactly that was established more than 100 years ago.

Back at the dawn of the century, an Italian economist realized that he could mathematically calculate the fact that 20% of Italian citizens owned about 80% of the nation’s wealth. This equation proved to be valuable in analyzing far more than just the wealth distribution in Renaissance Revival-era Italy. In fact, the so-called “Pareto Principle” has been (and continues to be) used as an effective method of measuring distributions of wealth, effort, sales productivity, and countless other applications. This is because there is a fundamental truth — what some might call a philosophy — associated with the 80/20 equation discovered by Vilfredo Pareto.

What is the fundamental philosophy of Pareto?

At its core, the philosophy of the Pareto Analysis is based on an understanding of the fact that a relatively small percentage of input is responsible for a significant amount of the output. More specifically, that 80% of output can be attributed to 20% of input. This, of course, works when analyzing wealth distribution (as it was originally used by Pareto), but it also works in a number of other applications as well.

Perhaps the most compelling application — at least in our entrepreneurial and capitalistic society — is the use of the Pareto Analysis when assessing productivity. More specifically, a business can usually attribute about 80% of their profit (or sales volume) to about 20% of customers. On the other hand, about 20% of customers often take up about 80% of available bandwidth.

The Pareto Analysis can be applied to any number of things:

  • Customers – both the time demands and their profitability
  • Daily tasks – where your time is spent productively and unproductively
  • Wealth – where the majority of your wealth is coming from, and where the majority of your expenses are derived
  • Anything else you can think of!

Use Pareto Analysis to become more productive

In order to use Pareto Analysis effectively, you must first be willing to accept a couple of facts: The first is the fact that some of your clients or customers may not be worth your time. The second thing you must be willing to accept is all work is not equal.

  1. Not all clients are worth keeping.
    Many businesses are reluctant to turn down any work that comes their way. Sometimes, the opportunity costs associated with highly-demanding or unprofitable clients may be preventing you from gaining more worthwhile clients. These customers demand a disproportionate amount of your company’s time and can ultimately prevent you from developing new, more profitable business elsewhere. You can use the Pareto Analysis to determine which clients are taking a disproportionate amount of your time (so you can try to phase them out) while also helping identify which clients are producing the vast majority of your revenue (so you can nurture and grow those clients as well).
  2. Some of the work you do isn’t worth the effort.
    The bottom line is that you simply cannot do everything, and you certainly cannot do everything well. As such, you should use the Pareto Analysis to determine which specific aspects of your day are producing the majority of benefit, then work to eliminate or delegate/outsource anything that does not fall into that category.

Try using the Pareto Analysis yourself, and see if you can make your day more productive by eliminating the time consuming, unproductive tasks and focusing on the high-yield tasks.

Categories Operations, StrategyTags , , , ,

Integrated Marketing from Concept to Measurement

Integrated marketing requires that businesses align their marketing processes in a way that continuously improves the customer experience. Understanding the how your processes feed into each other as part of an overall plan is a crucial first step. Successfully integrating these processes along with establishing KPIs ties together the goals of each department into a single unified strategy to enable supporting larger goals.

There is a way to create order out of chaos. The growing complexity of marketing makes it crucial that companies document, define, and automate their marketing processes. In order to be effective, processes within the following categories, which overlap to some extent, must be defined and integrated:

  • The execution process is often referred to as campaign management. This is the communication arm of marketing, and often deals with both outbound and inbound marketing as well as analyzing leads and customer value.
  • The operations of a marketing department include budgeting and resource allocation. Processes include marketing performance measurement, campaign planning, strategic planning, marketing systems and data capture.
  • Analytical processes are used to create predictive models and to analyze the data gathered to measure the results of a marketing program.

While implementing a marketing automation solution can more than double the output that a marketing team can produce, one must do her homework before implementation.  The success of marketing automation implementation does not primarily depend on the selected software, and it is not only about automation. Cross-functional coordination must be formalized by integrating the processes above and setting KPIs that focus teams on achieving corporate goals.

Process alignment creates truly integrated marketing programs.

Integrated marketing is powerful and effective. Each customer or prospect interaction reinforces your brand, increases awareness, and builds trust over time. By coordinating the customer journey across marketing channels, marketing investments become more efficient and effective.

You can integrate your marketing programs by following a few simple steps:

  1. Customer Experience.
    Integrated marketing aligns campaign management, marketing operations, and analytical processes to create a closed-loop around the customer. Create processes that focus on improving the customer experience in ways that will increase satisfaction (thus loyalty), drive revenue for the company and reduce marketing costs.
  2. Conceptualize.
    Set objectives and brainstorm ideas, keeping an overall focus so that everything aligns. Analytical and operational factors carry more weight at this point, while execution processes focus on understanding the target segment and the needs of the customer.
  3. Create a plan.
    Use analytics to understand your audience and competition and to optimize your marketing campaigns. Ensure that you address all three process categories in mind as you plan.
  4. Budget.
    Create a budget and allocate it among the various marketing programs that have been prioritized. There is no hard and fast rule for setting your marketing budget, which should be set on a based on a number of factors.  I have seen budgets in as little as 1% to as much as 35% of projected revenue.
  5. Campaign creation.
    Define and create the marketing campaigns that you have prioritized based on improving customer satisfaction.
  6. Test the waters.
    Test messaging, target segments and creative and make changes as needed. Always test, even if you think something is a no-brainer.  Human behavior is difficult to predict.  I have been surprised many times by test results of both “horrible” and “great” ideas.
  7. Analysis.
    Measure the success of the various parts of your campaign and analyze the results.
  8. Closure.
    Use the information from your results to develop the next marketing strategy.

If you follow the steps above, you can create a revenue generation loop that improves the efficiency of your marketing spend. If you need help, feel free to contact us.

Categories Branding, Digital, MarketingTags , , , , , , , ,