Why ROI Rules

By Chris McMurry, CEO of McMurry

When you spend hundreds of thousands of dollars launching a custom magazine, you want to be certain it's doing the job. But how you measure your return on investment (ROI) depends largely upon what you want your title to do. And your custom publisher should be prepared to help you quantify results, whatever it is you set out to achieve. "We make certain we understand a client's objectives before they spend any money," says Jerry Kaplan, vice president and group publisher at Meredith Corporation in Des Moines, IA. "Then there has to be some agreement as to whether their goal is presented in a way that is measurable."

The truth is, most goals are measurable. Often, a goal will be something broad, seemingly intangible like "improve customer relations" or "build brand awareness." But such a goal isn't unmeasurable, it's just measured differently from a goal such as "boost the bottom line" or "increase sales." So how do you start to track the success of your custom magazine? We've come up with the five goals most common to companies with publications to show the range of creative methods you can use to measure the return on your investment.

Goal 1: Boost sales from existing customers

Boston-based Pohly & Partners President Diana Pohly used a mailed questionnaire to measure magazine impact for its customer, Nynex, a provider of telephone services. The publications "Access, for small to mid-size businesses, and Interactions, targeting larger businesses" were both looking to boost sales of the company's services. Pohly mailed questionnaires to a portion of the combined 30,000 readers. The questionnaires didn't have incentives to encourage people to respond, so she followed up with phone calls to directly ask recipients to mail back their answers.

Because telephone services are ordered through representatives who don't tally the impetus for a customer's call, it's tricky to tell exactly which orders are inspired by the newsletter, by ads and so on. Pohly used the questionnaire to ask customers specifically how the magazine influenced them. Nine percent said they bought a product as a direct result of reading the magazine, and 48 percent said they contacted their account representative the first big step toward a sale.

Goal 2: Acquire new market share

Database comparison can be a great way to measure how well a publication is meeting its goals. Take, for example, one of Phoenix-based McMurry Publishing's titles, One Source. The magazine was published for Columbia Healthcare, whose number one goal was to drive new business into its 300-plus hospitals. One Source was mailed quarterly to 4.5 million people, mostly living within a few miles of a Columbia hospital. McMurry maintained a database of all the people who responded in some way to One Source.

That database was compared to a list of people who visited a Columbia hospital 90 days following receipt of the magazine to determine which responding readers came in for a treatment after reading One Source. That group was then compared to a historical patient database to determine whether the customer was new or a repeat customer. After 950,000 consumers responded to the first 12 issues and all the data was crunched, nearly 20,000 readers became patients, generating a 7:1 return on Columbia's publishing investment, and 32 percent of the patients hadn't been customers in the past.

Goal 3: Create brand awareness

Another McMurry client, Rural/Metro, is a $500-million company that provides fire and ambulance services in North and South America. Despite such widespread service, too few people knew the company. Prior to launching their magazine, Solutions, McMurry worked with Rural/Metro to do a baseline survey of municipal decision makers (mayors, city councilors and managers) to find out exactly what they knew. Mailed to 1,000 people, this survey included a dollar as a "thanks" for a response. The survey was returned by 422 people who averaged only 1.8 on a 1 to 5 scale rating their familiarity with Rural/Metro's services. The silver lining? More than half were somewhat to very interested in learning more.

The questionnaire was mailed to the same people after they'd been receiving the magazine for a year to measure exactly how well the client's goals "increased brand awareness and a true understanding of Rural/Metro services" were met. In the second survey, the respondents' familiarity with the Rural/Metro name not only increased, but the number of respondents with a positive image of the company grew by more than 25 percent. Their desire to learn more about the company also increased by 20 percent.

Goal 4: Change perception

Everyone knows IBM, but not everyone thinks of it as a leader in technological research. That's why the company decided to create Think Research, a 50,000-circulation quarterly that goes to the media, analysts, consultants, universities, computer science departments and opinion leaders.

"It's so people don't have to wait for a product announcement to think of IBM," says Rowan Dordick, the in-house editor of Think Research, who works with a team of editors and designers to put the title out. "The magazine covers IBM's capabilities and shows that we're contributing to technological advancement across the board all the time."

"We've grown from a circulation of 7,500 to 45,000 in the last few years, and I know it's having an impact because more and more conferences are calling and asking for it," says Dordick, who invites reader response via BRCs, 800 numbers and a web site, but only uses the feedback informally. "Sheer numbers alone are not the bottom line. If the magazine is impressive enough for people in the major media to pay attention and then amplify our message ”that's exactly what we want."

Goal 5: Enhance trade relations

Aside from its publishing prowess, Meredith Corporation is also known for its database of 60 million names, reaching five out of every seven American households. That's why Sola, the progressive eyeglass lens manufacturer, knew it could reach a wide audience when Meredith agreed to publish Eye-Q for them.

One of Eye-Q's goals "to add value to the trade" is accomplished by providing free eye health information to an eyeglass dispenser's patients, and by providing a toll-free number for patients to get referrals to Sola dispensers. Dispensers also get special cover wraps, some tailored for stores requesting information on Sola's high-end line, some for stores that have an Eye-Q display case on their floor.

But that's not all. To make sure Eye-Q was reaching its goal and Sola was getting its money's worth, Suzanne Harwood, senior account manager at Meredith Integrated Marketing who oversees the Sola account, says she conducted 12-minute interviews with 400 optical professionals and dispensers, and more than nine out of 10 said Eye-Q effectively educates professionals about new eyecare products. Plus, four of five see it as educating people on eye care, which is an added value that builds customer loyalty. What's good for its professionals and dispensers is good for Sola. Now that's good trade relations.

Revving Up Reader Response

Here's a quick look at the many ways you can elicit reader response to your magazine and measure your ROI.

Conduct baseline and follow-up surveys: Conduct a phone or mail survey with your readers before they get the magazine. Then, conduct the same survey with the same readers a year or two later, to measure the magazine's impact.

Provide fax-back questionnaires: Simply enclose a questionnaire within your magazine. Offering an incentive, such as entry into a drawing or a free gift, will always boost your response rates.

Tally visits to your Web site: This one can be tricky, since it's tough to tell if you've had 100 visitors, or just one guy hitting your site 100 times. That's why you should measure unique visits, rather than simply the hits, suggests Murray Wolf, vice president of sales and marketing for Hanley-Wood. Once readers are at your site, you can ask them to make purchases, fill out questionnaires or interact with you via e-mail.

Use an automated voice response (AVR) system: Here readers call and respond to a series of automated voice prompts using their telephone key pad. There are many service bureaus that offer AVR setup, implementation and application reports, making this high-tech option surprisingly affordable and easy to use.

Furnish coupons: Make sure you code the coupons so when redeemed, you know which ones originated in your magazine. Also, test which coupons work best and how your redemption rates compare to the national norms of 0.8 to 2.4 percent, according to NCH Promotional Services.

Publicize a toll-free number: If it's qualitative feedback you're after and you just want to know how readers like certain articles or approaches, a toll-free number can be a handy tool. If you can get a dedicated line and list that number only in your magazine pages, you'll be confident you can track calls to the publication.

Offer fax-on-demand: A great way to offer readers more information without having to fulfill orders yourself. Readers call, place an order via automated voice prompts and receive their request via fax within a few minutes. Like AVR, service bureaus are the best way to set up your fax-on-demand service.

Host focus groups: Getting together groups of readers and asking them if they like a recent redesign and whether the magazine is meeting editorial and corporate marketing objectives can be invaluable. While focus groups cost in the tens of thousands of dollars, you can do more than tally answers; you can watch body language and generate lengthy discussions about your product.

Enclose reply cards: A bind-in card can generate tangible, easily quantifiable response. It's also one of the cheapest ways to survey readers, says Wolf, claiming you can include it in your magazine for less than $10 per thousand copies.