Dana VanDen Heuvel: Blogs (read: websites) must increase sales or reduce costs...why else companies have them?

August 23, 2005

Blogs (read: websites) must increase sales or reduce costs...why else companies have them?

As a former Internet marketing director, I was tied to a few key metrics each month, not the least of which was sales that the website generated. Running both a B2B lead generation site and a retail e-commerce site, I got to see both sides of the house from a 'sales metrics' perspective, and if Iearned one thing, it's that a website (or blog, for that matter) does nothing if it doesn't net you increased sales.

I'm a bit concerned about the conversation going on between Betsy Richter of OneByOneMedia, and John Cass of Backbonemedia.

Betsy says:

I'd argue that it's nearly impossible to effectively and directly measure the impact of any marketing initiative on sales, unless there's a measurable hoop (hook?) (coupon, discount offer, special URL that can be tracked, etc.) that is the only way into the special offer (especially if you have a separate sales force with competing interests.) That's why I'd argue that you shouldn't list "increase sales" as the proof point about your blog's effectiveness over time.

We argued the same thing about websites in 1997. In the end, we had to put up, or shut down. We'd never have gotten a damn thing funded if we couldn't show revenue from it. Is showing positive sales growth from all of your marketing and advertising endeavors too much to ask from such investments? Blogs are good for a lot of things, but if conversion, and whatever that entails for you, isn't at the top of the list then they're good for nothing. (OK, before you jump all over that one, I know that they're good for a lot of other things too, but IMHO sales have to increase or some costs have to decrease for them to be of any value at all. Period)

Come on John, you can't agree that we don't need to show sales

Betsy's right...

....sales was not a big pull for many of the corporate bloggers we interviewed, though I would say that for some individual bloggers, Macromedia in particular, companies have experienced some additional sales. I think that blogging is still relatively new 2-3 years and it will take some time to help with direct sales.

That's taking the easy way out here. The tools exist to track, the tactics are evolving and the money is there. My hunch on why we're not going for the throat on this one is that the 'blogging purists' have told us that it's all about the conversation and the transparency and yadda, yadda, yadda. YES! It's all about those things...as long as they equal some form of net-positive cash flow for your enterprise.

Dana I get your point, but at some point don't you think certain segments will have to blog (or do something to connect with customers) just to keep up the status quo? To your web page analogy, I think at some point we all decided that we HAD to have a web page just so that we don't get striped by the competition. (A decade or so ago it was the fax machine - you might be too young but once upon a time people seriously asked if a fax machine was measurably justified.)

On the otherhand, I just posted about comments made by Lisa Poulson of Burson-Marsteller. She said her clients are moving past writing blogs and asking about monitoring blogs.

I'm currently struggling with whether or not I want to try to prompt my employer to blog so this is all great food for thought.

-Matt

I agree with Dana - at least for mainstream commercial B2B or B2C applications (excluding personal/lifestyle blogs, etc.).

A business exists to make money (great exceptions exist: not for profits, humanitarian organizations, etc.). Every activity is directed towards that goal.

A previous comment cited a fax machine as something that couldn't be justified. If so, then why convert education, experience, blood, sweat, & tears into cash, only to convert that cash into a useless fax machine? The machine was likely purchased because it increased revenues or reduced costs (either one increases profits) via enabling/enhancing communications (with suppliers, customers, employees, etc.).

Another point was made that some investments are made to maintain the status quo. That's the same thing. If you were going to lose a customer without the investment, you were investing to retain that (soon-to-be-lost) revenue & profit. Consider the revenue lost without the fax, and re-earned when the fax machine arrived on the scene.

Even if a corporate blog exists solely to put a human face on a business - you have to ask, "Why does the company want/need a human face?" If the answer (naively) is, "so customers feel better about the company," ask "why" again. After several iterations you will get down to revenue/profit (aka SURVIVAL).

Dana is spot on IMHO.