ROI management and customer demand management

From: http://semwatch.org/2010/02/roi-management-and-client-demand/

Author: gaoge Date: February 26, 2010 category:

Paid search SEM-2 comments

 

Zhang Zhiyong's Reply to "ROI management and Agent paradox" is very important, so I am reluctant to reply directly and use this reply to write another reply blog.

Zhang Tong said: "When I was working in the company, I especially emphasized that the execution team focused on customer results. Later, they paid special attention to the conversion cost and spent little money. Instead, they often led to dissatisfaction with advertisers, I also stressed that we must accurately understand advertiser requirements.
In fact, this problem may not be as serious as the landlord said, but it is important to communicate effectively between the two parties ."

This problem is not serious, but almost does not exist. Three reasons: First, advertisers lack understanding of ROI management, which is quite common in North America. This is also the core of my disagreement with Google's presales engineers. Strict ROI Indicator Management is not necessarily the most effective ROI management. Secondly, if advertisers have a clear understanding of this, we can realize the high cost involved in the process of pursuing the maximum profit, and the effectiveness of ROI management needs to be included in the management cost factors. Therefore, it must be a compromise. Ultimately, it is also the most important, advertiser who uses the consulting agency service has already made a choice in the market. Therefore, the agent paradox is unlikely to cause conflicts between advertiser and Agent service.

Being diluted by market activities does not mean that the agent paradox is eliminated. Effective communication is a customer requirement management process, which is theoretically independent from Roi management. The ROI management discussed here focuses on maximizing ROI. But for advertisers, maximizing Roi is a virtual thing, because the word "most" is hard to measure. In practice, we often face the following requirements: 1. obtain the maximum ROI under a certain budget indicator; 2. obtain the maximum revenue under a certain ROI indicator. As discussed earlier, once this attribute is added, it is impossible to maximize the ROI. For example, the eldest son pulled out from the dwarf may not be the highest in the world. However, in reality, we often have to block a line for various reasons, and the highest people are not allowed to enter the Longson trial.

Customer requirement management is to understand this line. Like any service industry, the SEM consulting agency is designed to satisfy customers, while providing high-level services is just one of the ways to satisfy customers. For example, if a person has a very low smile, a bad joke may make him laugh. This does not mean that the joke level is very high. If a person is depressed, maybe the best comedian cannot make him laugh. To make him laugh, you must first treat him. Customer requirement management, as said by Zhang Zhiyong, is mainly a communication process. It is a process of exploring laughter with advertisers. Advertisers must pursue ROI, but the ROI management process is complicated. In reality, we often use specific ROI indicators instead. The reason for understanding this ROI indicator and the advertiser's formulation of the indicator is to find a smile. Once this joke is reached, advertisers will laugh. On the other hand, most of the clients who use agency services are large and medium-sized advertisers and are responsible for online business. To a considerable extent, there is also the paradox of Agent-"we can achieve the expected goal, do not do too well. In case of a high growth rate in this quarter, we will go back to the expectations of the boss (shareholders) and it will be hard for us to do so in the next quarter ." Or, "these budgets have to be spent, so don't worry about the ROI. I will be given a market share! Otherwise, you will not be able to get that much for the next budget ." And so on.

Therefore, for consulting agency services, customer requirement management is more critical than ROI management. The relationship with advertisers has been well established. with trust, it is much easier to do things. The reply from Dr. Zhang Zhiyong is a story from experience! However, as an SEM administrator, we should have a clear understanding of the differences between ROI management and customer requirement management. Customer requirements are met, not the end of ROI management. "Later, they paid special attention to the conversion cost and spent little money, but often led to dissatisfaction with advertisers. The simplest and quickest way to achieve a certain Roi is to increase the price and reduce the price. It is also the main work of the SEM agent, which is very easy to surface. Most advertisers do not understand the details of ROI management, and the consulting service provider does not take the initiative to provide customers with this knowledge. Otherwise, the customer's expectations will be improved, but it will not be difficult. Even if the customer understands SEM, even if the data is given to the advertiser, they may not be able to see the problem due to the huge gap between the advertiser and the SEM administrator. In my personal experience, all the SEM accounts have room for further optimization, but the degree of difference is different. The actual size depends on the personal preferences of the SEM administrator.

I do not think that the SEM administrator must perform SEM management from the perspective of maximizing the ROI. advertiser satisfaction is the first. The definition of ROI is not limited to the current profit. I believe that more than SEM administrators do not know how to use VPC to measure ROI. Even if they do not understand it, there is a lack of effective tools to estimate VPC. In most cases, this requirement does not exist in the market, but this principle should be understood. A lot of things can be done temporarily, or even not done at all. It can be used as an SEM administrator. You should know how to do it or at least have an idea.

From the perspective of business management, meeting customer needs takes precedence over ROI management. From the perspective of SEM, we focus on ROI at any time, and it is possible to fall into the empirical nest if we stop at customer satisfaction. In SEM management, experience is crucial. Only by constantly acquiring new experiences (including Operation Experience, trial experience, and reasoning experience) Can we actively obtain new experiences ), in this way, we will not be bound by experience. I think this is also the greatest significance of our communication on semwatch, because everyone's experience is different, which is a very valuable asset.