Everything I Know about Marketing I learned from Google

Tony Bombacino, Restaurant.com

Tony Bombacino
CMO
Restaurant.com
1/25/10

How did your time in Search Engine Marketing (SEM) prepare you for your current role?

In a word, “Change.” Being part of a start-up SEM during the earlier days of the SEM industry, the one constant was certainly Change. Change by the day and sometimes by the hour and minute. I’m talking constantly changing costs. Constantly changing ROI [return on investment] goals. A constant need to be ranked #1 on the term “cool stuff”. Constantly changing content. Constantly changing competition. And a constant need for clients to see better results.

One other thing that was constant was the need to re-explain and sell search services/ROI to clients small and large. As a CMO, my days are spent planning for and adapting to change and constantly “selling” new things to my team, my CFO and CEO. My experience in SEM certainly helped me be ready for this constant change and need to constantly sell my project/story.

Lesson #8 in my book is “Test Everything.” Can you share a mini case-study of how you’ve applied a test-and-learn approach at Restaurant.com?

[A good example is a] Homepage/Landing Page Test. The goal of this test was to drive more buyers to our gift center to buy “store credit” versus restaurant specific gift certificates, especially during the holiday season. Through research, we realized that many of our customers didn’t even know we had a “gift center” and that they could buy “store credit” certificates that could then be redeemed online for any of our more than 13,000 restaurants. Thus, they were buying restaurant specific gift certificates. This gift option gave the recipient less choice/flexibility and was a drain on our finite restaurant specific inventory.

In response, we completely redesigned our homepage and landing pages for search and email to feature gift certificates and the gift center equally. We also added more messaging specific to our gift offerings in emails and across our site. To limit risk while expediting learnings, we created an A/B split test and monitored pre-post KPI’s [key performance indicators] in near real time via Omniture SiteCatalyst.

[We saw] results almost instantly, and then throughout q4 ’09, we realized a 150% increase in gift center sales as a percentage of overall sales. And, through mid-January, gift sales as a percentage of overall sales YOY [year-over-year] are still up over 75%. We continue to test and learn every day.

Lesson #13 is “Your Competition is Broader Than You Think.” Who does Restaurant.com compete with? Or rather who don’t you compete with? How do you draw the line between competitor and partner? Do you believe in frenemies?

There really isn’t a direct competitor that does exactly what we do. There is no Coke versus Pepsi scenario here. However, our mission is to be the trusted and valued source for connecting restaurants and diners and in doing so, to help restaurants fill their empty tables and improve their profits while helping consumers dine out more often and more affordably.

With that being said, it’s public knowledge that there are many other companies out there trying to make money in our space and leverage the positive trends in online coupon usage, restaurant savings and the broader industry as it relates to improving the entire dining out experience. Some people may also argue that grocery stores, regional savings sites, coupon sites that don’t feature us and many other regional and niche sites could be “competition”, but we don’t look at any of these companies/categories as true competitors. We are open to partnering with any of them and figuring out how we can help drive value for each other and our collective customer bases. We do believe in “frenemies” in most cases. Although we don’t currently have any “frenemies”, we are open to having them in the future.

Lesson #16 is “Altruism Sells.” Restaurant.com’s Feed-it-Forward program seems to play on this theme. Please describe this program. What stories have you heard from customers that fed-it-forward that you found particularly inspiring? What have the results been from this program in terms of # of certificates delivered?

In response to the troubled economy and recognition that many people would not be able to enjoy the gift of giving during the coming Holiday season, or at the very least, would have to shorten their lists, Feed It Forward was initially dreamed up and created in October, 2008. This program went from initial idea to launch in less than 6 weeks.

The main idea and goal of this program was to help people across America to celebrate the gift of giving. Through our giving site, each person was able to give away (3) $10 Restaurant.com Gift Certificates (for Free) every day for 30 days. The program in year 1 was a success where people gave away over $4 million in Restaurant.com gift certificates. We also received hundreds of amazing thank you emails from givers across the country. In addition, the media helped spread the word and by providing over 20 million free media impressions between thanksgiving and Christmas 2008.

After hearing such positive and powerful comments from customers and restaurant partners all year long, we decided that we would launch Feed It Forward again in 2009. The goal again was to help people across America to celebrate the gift of giving. This time we allowed customers to give away (30) $10 Restaurant.com Gift Certificates (for Free) per day for 30 days through our giving site and added a Facebook giving application to the mix. This time around customers gave away nearly $10 million in Restaurant.com gift certificates, we received even more positive and inspiring thank you emails from customers and the media provided over 60 million impressions across TV, web, print, radio, etc.

In less than 140 characters, what’s the most important marketing lesson you’ve learned from Google?

Stop trying to be Google. Focus on what your customers want & what your company does best…if you can own a category, I guess that’s cool 2.

2/2/10

What does it take to create a “test-and-learn” culture within an organization?

In my personal experience, the answer to this question really all depends on a few key factors. Do you work for a public or private company? Is your company small or large? And what phase of the company are you in? Start up, growth, maintenance mode or decline? With that being said, here are some general keys to success that I think apply in all cases.

1) Executive Sponsor(s): It still does start at the top. Even if there are no tools involved to track or automate testing at the beginning that require 3rd party investment, there are many changes/rules that may be necessary to truly create and maintain a “test and learn” culture….and your CEO (and CMO/head of marketing) better be on board. Doing this halfway leads to wasted time, wasted test efforts that measure the wrong things and/or don’t prove anything, keeps the team focused on constant busy work, subjectivity (Hippo) still may rule over reality and skepticism will most likely rule over any expected excitement about that “test and learn” culture everyone keeps talking/hearing about.

2) People: Make sure you have the right people in the right roles. Having the desire to test and learn and the support of management will not get you all the way there. You also need to have the right people in the right roles. Depending on the size of a company, it’s important to have marketing leads the can outline ongoing test scenarios that ultimately own the results of these tests (revenue, profit, Average Order Value, conversion rate, etc), you need a head of marketing analytics/decision sciences (or whatever you want to call it…the person who is responsible for creating models, customer profiles, test criteria, etc., etc., creative resources to help make the ideas come to life and solid people in QA and tech to help you eventually automate and scale your testing (and learning) machine.

3) Processes: Develop, test and roll out smart processes that will protect and enable this important initiative.  Once you have an executive sponsor and have either created the vision for your team or have hired the right people into these roles, you’ll need to outline some smart processes and the rules of engagement that will help direct the team through this journey. This will most likely require a significant time and financial investment and you shouldn’t just “wing it”. This is one place where you’ll want to “measure twice and cut once”. Make sure the key stakeholders understand who is responsible for what, what is expected of them and what it means to “test and learn” at your company. From there, publish goals & results, expect accountability and reward/celebrate success. Remember, you are testing and learning with these processes as well. Take the time to get them right from the start, but do then get started…and realize that some processes will need to change (or go away) as you scale your business and become more sophisticated with your test and learn culture.

4) Technology and Tools: Don’t bring a knife to a gun fight or vice versa. This seems very obvious to many people, but I have seen it at other companies and experienced it myself. Many companies decide to go down the test and learn path halfway and they don’t want to spend any money or time on this initiative; they just want to test and want the results now. No new tech investments, no tools, no process improvements. “Just test some stuff and learn already, will ya”? (Knife to a gun fight). Most of these companies never break this cycle and end up wasting a lot of time and money and eventually burn out their employees and customers. The reality is that customer expectations are higher than ever before and with media fragmentation at an all time high as well, even if you are just an online retailer with no physical stores, you have more things to track, test and learn from than ever before. To get it right, to be efficient and to truly scale your test and learn operation, you’ll most likely need to build or buy any number of tools. On the other hand, you may want to think twice before skipping steps 1-3 and going directly to step 4. I have also seen (firsthand) companies bring a gun to a knife fight. The whole goal of the test and learn initiative for these kind of companies is usually focused around simply buying some shiny new tool/technology that the CEO or new marketing guy love. They don’t want to hear about process changes, hiring strategy, phased implementations….they just want to buy and implement the tool so they can tell their friends about it, check off the “me too” box, sit back and watch the sales/results come in. You obviously know what’s more likely to happen is that they will realize they wasted a lot of money, purchased the Mercedes when they only needed (and were only ready for) the clunker and forgot to build a foundation for their very expensive (and, no,w crumbling) house. Oh, well, I guess we’ll just start over. When in doubt, focus on steps 1-3 and automate as you learn.

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