I was recently discussing call results with a direct marketer and he was asking questions about how the calls are counted for his infomercial campaign. Now understanding the numbers is very important, but this marketer got caught in a trap that many of us get caught in, instead of Managing By The Numbers, he wanted to manage the numbers. Now this may on the surface sound like the same thing, but there is an important difference.
The discussions of the call count on his infomercial campaign went something like this. The marketer looked at his numbers and determined that if he got 30% of the people that called to make a purchase, the infomercial would be profitable and the current closing percentage was only 25%. So the marketer went to his call center sales manager and gave him the goal for getting to a 25% close rate. So far so good, but when the sales manager gets the goal, he immediately said: “we would be closing 30% except we have calls from people that dialed a wrong number, and people that want to talk to customer service, and people with no credit card – if you took out those calls we would be closing at 30%”. The marketer instructed those calls to be removed from the call count report and he would then be at his goal. His closing rate immediately jumped to 32% and he thought things were great. Some time passed and he realized he wasn’t doing any better than before this ‘improvement’ and he wasn’t sure why. The answer is simple, he was managing the numbers, he had changed the way they report the information and not the actions that the number represented. In the end he was getting the same amount of orders for the same media dollars, he just lower the calls per thousand (CPT) and increased the close rate.
With the vast amount of data that we collect in direct response, it is easy to get caught in the trap of “Managing the numbers” instead of “Managing BY the Numbers”. This trap is easy to avoid if you just remember to focus on the actions/behaviors that drive the numbers and that all the media efficiency ratios (MER) and percentages are really just indicators and you can’t take them to the bank. What you can take to the bank is the resulting profit from taking steps to improve the actions and behaviors that drive the numbers.