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Sales Training II Final

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Published on August 11, 2007

Author: Flemel

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“So, You Don’t Think Online Advertising Works” and other MythsSales Training for the XMOS Sponsors:  'So, You Don’t Think Online Advertising Works' and other Myths Sales Training for the XMOS Sponsors July 2004 Greg Stuart CEO Today’s Agenda:  Today’s Agenda State of the Interactive Ad Industry The XMOS Project 10 Objections to Online Advertising (and why they are Myths) But First, Thanks to Our Sponsors:  But First, Thanks to Our Sponsors State of the Interactive Advertising Industry:  State of the Interactive Advertising Industry The Times, They Are a Changing We’ve Come a Long Way Since Then:  4th Quarter 2003 was the Biggest Quarter Ever $ million We’ve Come a Long Way Since Then 4Q Up +38% vs. YAG Source: IAB/PwC Revenue Report $2,182 The Days of Intrusive, Must See Ads is Over:  The Days of Intrusive, Must See Ads is Over (1) Jack Myers Report, 2003 (2) DiMa Group (3) Jim Stengel Speech 4A’s Media Conf ’04 (4) Jim Stengel Speech 4A’s Media Conf ’04 (5) Merrill Lynch 2003 (6) NAB (1965-1986); Nielsen (2000) 85% of TiVo users skip commercials (1) DVR projected to be 10% of U.S. ‘05 (2) Avg HH has 90 TV channels vs. 27 in ’94 (3) Primetime Share is 31% vs. 52% 10 Yrs Ago (4) Newspaper Circ down 8% since ‘93 (5) TV Day After Recall is less than 10% (6) Top 5 Consumer Magazines declined 18% since ‘93 (5) And Became Essential to Consumer’s :  And Became Essential to Consumer’s Nielsen NetRatings Mar ’04 andamp; Mar ’03 2003 CIA World Factbook 30% seek Financial info mo. Min. up +47%vs YAG 25% seek Movie info mo. vs. 18% YAG 18% visit Job sites mo. 85% seek News mo. 25% seek Map info mo. vs. 20% YAG 46% seek Travel info mo. Avg 50 min per mo. vs. 38 min. YAG 16% seek Dating help mo. vs. 13% YAG; avg. 40 min. If U.S. Unique Users where a country, it would be 7th, just behind Pakistan, but bigger than Russia Internet is a Mass MediumComparative HH Penetration ‘04:  Internet 59% Internet is a Mass Medium Comparative HH Penetration ‘04 Radio andamp; Television Cable TV ~ 67% 98% Magazines 84% Newspapers 55% 2004: 68% Source: eMarketer And Getting Stronger:  And Getting Stronger Source: Nielsen//NetRatings andamp; DoubleClick Broadband users spend 50% more time online Source: Arbitron Research, 2003; Knowledge Networks/SRI, Jan, 2004 Broadband HH's are 50% more likely to be active online shoppers The Industry is Making Progress:  The Industry is Making Progress The IAB XMOS Project:  The IAB XMOS Project 2 ½ years, 12 major brands, 18 ad agencies, 27 online publishers, thousand’s educated, billions in ad spending influenced 12 XMOS Public Studies to Date:  XMOS 1.0 Unilever’s Dove XMOS Branding - 1st wave McDonald’s Colgate Total Kimberly Clark Kleenex AstraZeneca Nexium XMOS Branding - 2nd wave Universal Pictures Home Video ING VeriSign XMO$ Sales andamp; Branding Ford F-150 Pandamp;G’s Olay Kraft’s Jell-O Nestlé's Coffee-mate 12 XMOS Public Studies to Date Conducted with Numerous Agency Partners:  Conducted with Numerous Agency Partners Zubi Saatchi What is XMOS?:  What is XMOS? Widely Accepted andamp; Validated Each Study is reviewed by the Advertising Research Foundation (ARF) Nominated for ESOMAR John andamp; Mary Goodyear Award (Best International Research ) Independently Reviewed by Forrester Research Landmark study methodology assesses 'Cost Effectiveness' of each Medium Scientifically evaluates real world, in-market campaigns Marketers carefully considered methodology Better Results:  Better Results Same Budget The net takeaway Most often because Online’s allocation within media mix is increased Summary Of XMOS Results:  Summary Of XMOS Results * Not the actual optimized level, but considered an interim increase ** Brand ran Optimal level so there was no gain from more online spending *** Because of differing objectives, cross media comparison was inconclusive Value of XMOS Branding Project:  'Shouted from The Rooftops' … 7 city Road Show reaching 1,500 Marketers representing $22 Billion in ad spend 15 Industry Conferences (AAAAs, ANA, iMedia, ARF, IAB) reaching $50+ Billion in ad spend Key Industry stakeholders through AAAAs and ANA Committees representing $40 Billion in ad spend 67 of the top 100 marketers and agencies presented by IAB Staff representing $50 Billion in ad spend Hundreds of marketers and agencies prospects and clients through publisher distribution of sales materials Tens of thousands of industry executives through registration industry portal at iab.net Estimated value of programs: If .1% moves = $22M If .05% moves = $25M If .01% moves = $4M If .1% moves = $50M Value: $101M Value of XMOS Branding Project XMOS ranked as the 2nd most important input for marketers in making decisions Sales/ROI Modeling To Date:  Sales/ROI Modeling To Date Marketing Mix models determine what factors are contributing to those fluctuations And allow marketer to re-arrange budget among marketing elements to optimize results When sales volume fluctuates… Marketing Mix Modeling Measures the Past:  Marketing Mix Modeling Measures the Past Typically requires 2-3 years of past media and sales data Therefore, does not reflect a current media environment Online spending is too small to measure anyway But What if the Road Curves?:  But What if the Road Curves? Isolating Online in the Mix: The Measurement Approach:  Isolating Online in the Mix: The Measurement Approach Shopping Database (or Panel) Branding Survey Total Population However, Sales is Not the Only Goal:  However, Sales is Not the Only Goal Marketing is more complex than just driving sales Brands succeed because they also differentiate in the consumer’s mind The Conventional Wisdom for Brand Assessment is a 2 x 2 Grid:  The Conventional Wisdom for Brand Assessment is a 2 x 2 Grid “So, You Don’t Want to Buy Online”:  'So, You Don’t Want to Buy Online' 10 Objections and Why we Now Know They are Myths 10 Objections (and why they are myths) :  10 Objections (and why they are myths) Online is not a Branding Medium Online is not a Mass Reach vehicle Online does not generate offline sales We need to get the job done in our primary media Online is less impactful/efficient than TV Our Target audience segment is not Online We are already Online; we have a web site The sales channel won’t let us use Online We don’t know how to compare Online and Offline The client doesn’t like Online 10 Objections :  10 Objections Online is not a Branding Medium 12 studies to date indicate that Online moves the branding needle Whether that be awareness, image or purchase intent “The Most Important Launch In the History Of Ford” - Bill Ford:  'The Most Important Launch In the History Of Ford' - Bill Ford The F-150 Communications Strategy:  Opportunity: Build Upon Leadership – Ford Leads. Others Follow Key Idea: 'Ford is Setting the Standard – Again' Key Message: 'The Only Truck that Earned the Right to be the Next F-150 Communications Strategy: Develop and leverage high visibility media spikes to deliver maximum impact of launch message The F-150 Communications Strategy The Next F-150 TV Ads:  The Next F-150 TV Ads The Next F-150 Magazine Ads:  The Next F-150 Magazine Ads The Next F-150 Online Ads:  The Next F-150 Online Ads Ford Advertising Drove Ad Recall:  Ford Advertising Drove Ad Recall Have you recently seen or heard advertising for…? (All New 2004 Ford F-150: 'Yes- have seen or heard advertising recently') 8/20/03 8/27/03 9/3/03 9/10/03 9/17/03 9/24/03 10/1/03 10/8/03 10/15/03 10/22/03 10/29/03 11/5/03 11/12/03 11/19/03 11/26/03 12/3/03 12/10/03 12/17/03 12/24/03 12/31/03 1/7/04 1/14/04 1/21/04 1/28/04 2/4/04 2/11/04 2/18/04 +32 Point Increase Ford Drove EVERY Brand Image Attribute:  Ford Drove EVERY Brand Image Attribute Good Looking +22% Rugged/Tough +12% Excellent Payroll Capacity +15% Dependable +16% Tried and Tested +6% Viewed as a Leader +5% Excellent Towing Capacity +6% Lasts Long +14% Strongly Agree/Agree (net) Difference Totally Redesigned +12% Excellent Handling +12% Fun to Drive +19% Excellent Workmanship +19% Exceptionally Quiet Interior +13% Excellent Ride +16% Good Value +12% Difference Ford Drove Purchase Consideration:  Ford Drove Purchase Consideration The next time you are in the market for a new vehicle, how likely are you to purchase a lease on the following pick-up trucks? (All new Ford F-150: 'Definitely Would Buy' and 'Probably Would') +17% Point Increase 40% 50% 8/20/03 8/27/03 9/3/03 9/10/03 9/17/03 9/24/03 10/1/03 10/8/03 10/15/03 10/22/03 10/29/03 11/5/03 11/12/03 11/19/03 11/26/03 12/3/03 12/10/03 12/17/03 12/24/03 12/31/03 1/7/04 1/14/04 1/21/04 1/28/04 2/4/04 2/11/04 2/18/04 60% Individual Media Effects Led by OnlineBranding Metrics Summary – 1st 2 Months Only:  Individual Media Effects Led by Online Branding Metrics Summary – 1st 2 Months Only Universal Home Video – E.T. DVD Release:  Universal Home Video – E.T. DVD Release Launch Goals: Communicate the release of E.T. DVD Position brand as one of the most beloved movies of all time, with new footage andamp; enhanced visual effect, a must buy DVD Primary Objective: Generate purchase interest TV Built Awareness but Not Purchase Intent:  TV Built Awareness but Not Purchase Intent Brand Awareness Purchase Intent % Pre-TV TV Campaign Post TV Campaign Summary of branding gains:  Summary of branding gains One of the most beloved movies of all time An unforgettable masterpiece for the whole family Based upon what you have seen or heard, how much would you say each statement describes the movie E.T. The Extraterrestrial on DVD and video… (Describes completely/Describes somewhat) TV + Rich Media Overlay TV + Online TV Only Pre-Campaign However, TV & Online do Drive Purchase Intent:  Thinking about E.T. The Extraterrestrial, how likely are you to buy the DVD or Video However, TV andamp; Online do Drive Purchase Intent Definitely will/Probably will buy (net) Stat sig. Stat sig. Findings: TV alone does not affect purchase intent However, the combination of Online advertising and TV does produce a statistically significant impact Moreover, TV and the overlay Online execution makes an even bigger impact TV + Rich Media Overlay TV + Online TV Only Pre-Campaign 10 Objections :  10 Objections Online is not a Branding Medium Online is not a Mass Reach vehicle Ford proved otherwise F-150 Integrated Communications Plan:  Aug Sep Oct Nov Dec Jan Feb Mass Media NFL Kickoff Weekend Ford Champ Weekend Thanksgiving Football BCS Online media (Roadblocks and In-market Sites) BCS F-150 for Life Portal Roadblock 24 Premier F-150 Integrated Communications Plan Plan focused on using a heavy-up during key events For example, Online Roadblock on main portals One Day Reach = 40%!!!:  One Day Reach = 40%!!! More reach via 3 phone calls than any other medium Roadblock 10 Objections :  10 Objections Online is not a Branding Medium Online is not a Mass Reach vehicle Online does not generate offline sales XMOS 'on Steroids' Says it Can Ford Sales Analysis:  Ford Sales Analysis 500,000 F-150’s sold annually Online was 6% of sales, or 30,000 trucks Results in $750,000,000 annual F-150 sales Tracked Buying of Control andamp; Exposed Group @ $25,000 per Truck Ford Succeeded at Brand & Sales:  Ford Succeeded at Brand andamp; Sales Online Advertising contributes to a Healthy Brand both in Sales and Differentiation Unrealized Potential Dying Brand +6% Sales Lift +17 points Purchase Intent Brand Image Double Digit Increase in all key attributes Sales Low High Brand Image High Low Healthy Brand Vulnerable What if Ford Ran Increased Online?:  What if Ford Ran Increased Online? Online included Roadblocks andamp; In-Market Plan would then sell +5%, or 25,000 trucks Results in additional $625,000,000 annual sales Optimization and Judgment suggested +6% increase in Online @ $25,000 per Truck Not bad for $300K investment in Research Jell-O Ad Examples :  Jell-O Ad Examples The Addition of Online Builds Brand:  The Addition of Online Builds Brand Control n= 468 Branded n=469 Coupon n= 465 Purchase Intent: The next time you buy dry gelatin mix that comes in a box, what is the probability that you will buy Jell-O gelatin mix? (Top 2 box- 11 point Juster Scale) All significant values are at a 95% confidence level Online advertising increases purchase intent by 7 points Offline Offline + Online Purchase Intent Lift: +7% More Powerfully, Online Builds Sales:  More Powerfully, Online Builds Sales *All volume numbers above are weekly volume per 100 Households Control* Exposed to Online Ad Average Weekly Volume per 100 Households Measured in Ounces Sales Lift: +7.5% Incremental Volume +.1 oz Online advertising resulted in a 7.5% sales volume lift Together, Jell-O is a “Healthy” Brand:  Together, Jell-O is a 'Healthy' Brand Healthy Brand Vulnerable Sales Low High Brand Image High Low Online Advertising contributes to a Healthy Brand both in Sales and Differentiation Increase in select attributes Purchase Intent: +7 pts (top 2 box) Sales Lift: 7.5% Unrealized Potential Dying Brand The Coffee-Mate Online Campaign:  The Coffee-Mate Online Campaign And Again, Online Builds Sales:  And Again, Online Builds Sales *Control Panel=606 Exposed Panel=1,127. All volume numbers above are weekly volume per 100 Households **Statistically Significant at the 95% confidence level Control* Exposed to Online Ad Average Weekly Volume per 100 Households Measured in Ounces Sales Lift: +10% Online advertising resulted in a 10% sales volume lift Incremental Volume +1.3oz Coffee-Mate is a Healthy Brand:  Coffee-Mate is a Healthy Brand Vulnerable Sales Low High Brand Image High Low Online Advertising contributes to a Healthy Brand both in Sales and Differentiation Brand Image: +5 to +7 pts (top 2 box) Sales Lift: 10% Purchase Intent: +3 to +4 pts (top 2 box) Healthy Brand Unrealized Potential Dying Brand Olay Online Campaign:  Olay Online Campaign Healthy Olay: Strong Sales & Brand:  Healthy Olay: Strong Sales andamp; Brand Vulnerable Sales Low High Brand Image High Low Online Advertising contributes to a Healthy Brand both in Sales and Differentiation Brand Image: Increase in select attributes Sales Lift: 12.5% Purchase Intent: +12 pts (top 2 box) Healthy Brand Unrealized Potential Dying Brand Conclusively: Online Advertising Sells!:  Conclusively: Online Advertising Sells! Sales Low High Branding High Low *Mid-point data only. Campaign is still in field, Reported % increase in household buy-rate. Actual volume increase were higher. Online Sales Lift Ford 5.0% Jell-O 7.5% Coffee-mate 10.0% Olay 12.5%* 10 Objections :  10 Objections Online is not a Branding Medium Online is not a Mass Reach vehicle Online does not generate offline sales We need to get the job done in our primary media It’s not the Medium, it’s the Mix! The Combination of Mediums is Often Better :  The Combination of Mediums is Often Better Cost per impact Point gain over baseline is calculated by measuring the post branding level and subtracting the pre-campaign level. Costs per person impacted indexed against National campaign as a whole. National Campaign as a whole measures rolls-up each media in proportion to its reach. Primary Objective No Medium Can Deliver Entire Audience:  No Medium Can Deliver Entire Audience TV Use Online Use Heavier Heavier Lighter Lighter Heavy TV Heavy Online Heavy TV Light Online Light TV Light Online Light TV Heavy Online 26% 38% 15% 21% Media Usage among 18-49 year old target 34.3 Million! TV and Online Complement One Another :  TV and Online Complement One Another Source: Debranded XMOS Managing Frequency is Key to Online Efficiency:  Managing Frequency is Key to Online Efficiency Insight The heaviest online quintile is getting over half your ad impressions:  The heaviest online quintile is getting over half your ad impressions Typical Campaign (Debranded) Light Users All other quintiles Heavy Users Each quintile is 20% of all users. Website Frequency Caps Can Help:  Website Frequency Caps Can Help Typical Campaign (Debranded) Light Users All other quintiles Heavy Users If the campaign delivered 50 million impressions and reached 15 million before the frequency cap. After the cap, reach would increase to 26 (+72%). Or, impressions could be cut by 42% to achieve same reach. Freq cap of 3 per site Increase reach by 72% Cut impressions by 42%* Online Frequency AnalysisSales Impact:  Online Frequency Analysis Sales Impact The top quintile received 85%+ of ad impressions Frequency capping in a regular campaign would eliminate this heavy skew 10 Objections :  10 Objections Online is not a Branding Medium Online is not a Mass Reach vehicle Online does not generate offline sales We need to get the job done in our primary media Online is less impactful/efficient than TV Most often, Online is the most cost efficient media, especially when most effective Universal ET DVD Campaign – TV & Online:  Universal ET DVD Campaign – TV andamp; Online Rich Media 6½x More Cost Effective TVBased on Relative Cost Index against Effectiveness :  Rich Media 6½x More Cost Effective TV Based on Relative Cost Index against Effectiveness Summary However, the CPM was only 2X Online 100 TV 169 Rich Media Overlay 299 Optimal Mix Was a Significant Change:  Optimal Mix Was a Significant Change Before After TV Online Rich Media Overlay Universal: Major Gains with Online:  Universal: Major Gains with Online Absolute gains (bar chart) and % lift Slide70:  Jell-O Sales ROI Online frequency=9.8 Online frequency=7.0 Calculated National Theoretical Recommended frequency level Payback of Each Media Vehicle per Dollar Spent Above average ROI Below average ROI Direct TV Direct Print Radio Trade FSI Online Coffee-mate Sales ROI:  Coffee-mate Sales ROI Online Recommended Level ROI of Each Media Vehicle per Dollar Spent TV Consumer Promotions Trade Online Above average ROI Below average ROI Purchase Consideration Impact Efficiency Relative Cost Index (ROMO):  Purchase Consideration Impact Efficiency Relative Cost Index (ROMO) Interpretation: If it cost Online $1 (indexed of 100) to increase purchase consideration, then it cost $1.96 for the roadblock, $3.54 for magazine and $21.54 to TV to achieve the same increase. 10 Objections :  10 Objections Online is not a Branding Medium Online is not a Mass Reach vehicle Online does not generate offline sales We need to get the job done in our primary media Online is less impactful/efficient than TV Our Target audience segment is not Online Target Segments researched: B2B, Hispanic, A18-49, W18-49, M25-54, Mom’s w/ Kids, A35+, Truck Buyers, IT Decision Makers Different Audience’s Online vs. Print :  Different Audience’s Online vs. Print Corpographics Magazine Sample Job Title Online Sample Slide75:  VeriSign Online Ad Examples:  VeriSign Online Ad Examples Versign: Results Summary:  Versign: Results Summary *3/31 to 6/30/2003 Each media had different roles. Goals by medium: Direct Brand Response Print 70% 30% Online 50% 50% Print did move some brand metrics while Online moved brand metrics but only at the higher frequency levels. Online achieved more downloads of white paper: Budget Downloads Print 89% 16 Online 11% 2,319 Unknown -- 7,665 Cost per download for Online was $58 vs. a standard of $100 to $300 Current media mix and recommended mix Online Magazine Ford F-150 Hispanic Launch:  Ford F-150 Hispanic Launch Hispanic Online Advertising Works Also:  Hispanic Online Advertising Works Also Spanish language ads produced significant gains in upper-funnel metrics Especially brand image However, like with TV advertising, little effect was achieved on lower-funnel metrics Analysis based on plotting a frequency curve (since pure control exposure sample size was too small to analyze on its own) 10 Objections :  10 Objections Online is not a Branding Medium Online is not a Mass Reach vehicle Online does not generate offline sales We need to get the job done in our primary media Online is less impactful/efficient than TV Our Target audience segment is not Online We are already Online; we have a web site There is little payout to Web Sites relative to general web Advertising What is the “Real” Reach of a Web Site?:  What is the 'Real' Reach of a Web Site? Based on Research, assume only 14% visit the Web site (1) Source: Debranded XMOS (1) Ranges from 1% to over 20% Web Sites Influence a Very Small Percentage of Consumers:  Web Sites Influence a Very Small Percentage of Consumers Use corp. Websites for decision making No corp. Website use Source: Debranded XMOS Value of Online Ads vs. Web Site Clicks:  Value of Online Ads vs. Web Site Clicks Online Value of Advertisement A Web Site Value Click Through Cost of Campaign $200,000 $200,000 Total Impressions 10,000,000 10,000,000 Click Through NA 2.50% Potential Viewers 10,000,000 250,000 % Influenced 3% 20% Total Influenced 300,000 50,000 Cost per Influenced $0.67 $4.00 Generally, advertising provides 90% of the value relative to the web site Implications of Search::  Implications of Search: Consumers that searched were four times more likely to buy an F-150 However, search reached 0.6% of total online users And 3% of F-150 buyers Search is the ultimate 'opt-in' Search keywords: 4x4 Truck, 4x4 Trucks, Chevy Silverado, Dodge Ram, F 150, F 250, F Series, F150, F250, F250 F350, F350, Ford, Ford 4x4, Ford F 150, Ford F 250, Ford F 350, Ford F Series, Ford F150, Ford F-150, Ford F250, Ford F350, Ford F-Series, Ford Pickup, Ford Pickups, Ford Super Duty, Ford Truck, Ford Trucks, Pickup, Pickup, Pick-Up, Pickup Truck, Pickup Truck, Pickup Trucks, Ram, Toby Keith, Toyota Tundra, Truck, Trucks, Tundra 10 Objections :  10 Objections Online is not a Branding Medium Online is not a Mass Reach vehicle Online does not generate offline sales We need to get the job done in our primary media Online is less impactful/efficient than TV Our Target audience segment is not Online We are already Online; we have a web site The sales channel won’t let us use Online McDonald’s franchises’ said absolutely no online…until they did an XMOS project McDonald’s Cancelled Online, till XMOS:  McDonald’s Cancelled Online, till XMOS Introducing New Menu Item: Grilled Chicken Flatbread Sandwich Budget % Aided Awareness 20% of Broadcast Budget Reinvested 13.6% in Online Point of Diminished Returns 5pt Gain! When Optimized, There are Major Gains:  When Optimized, There are Major Gains Recommendation Place 13.6% in Online 10 Objections :  10 Objections Online is not a Branding Medium Online is not a Mass Reach vehicle Online does not generate offline sales We need to get the job done in our primary media Online is less impactful/efficient than TV Our Target audience segment is not Online We are already Online; we have a web site The sales channel won’t let us use Online We don’t know how to compare Online and Offline The studies indicate that they are close on an impression basis Online & TV Have Same “Impression” Impact:  Number of advertising exposures Avg Brand Impact (metrics) (%) Magazine Online Television Online andamp; TV Have Same 'Impression' Impact 10 Objections :  10 Objections Online is not a Branding Medium Online is not a Mass Reach vehicle Online does not generate offline sales We need to get the job done in our primary media Online is less impactful/efficient than TV Our Target audience segment is not Online We are already Online; we have a web site The sales channel won’t let us use Online We don’t know how to compare Online and Offline The client doesn’t like Online Better Results:  Better Results Same Budget Summary Of XMOS Results:  Summary Of XMOS Results * Not the actual optimized level, but considered an interim increase ** Brand ran Optimal level so there was no gain from more online spending *** Because of differing objectives, cross media comparison was inconclusive 10 Objections :  10 Objections Online is not a Branding Medium Online is not a Mass Reach vehicle Online does not generate offline sales We need to get the job done in our primary media Online is less impactful/efficient than TV Our Target audience segment is not Online We are already Online; we have a web site The sales channel won’t let us use Online We don’t know how to compare Online and Offline The client doesn’t like Online Loves Demands the Mix Reasons Online Works XMOS Marketers Road Show Schedule:  XMOS Marketers Road Show Schedule Encourage marketers andamp; agencies to join us for XMOS Road Show is morning andamp; Search Road Show in afternoon July 14: Los Angeles July 15: San Francisco July 20: Dallas July 27: New York Aug 10: Chicago Aug 12: Detroit Send us your sales contact database and we’ll mail to them. Or, organize your own event around this event. www.iab.net/xmostools:  www.iab.net/xmostools Greg Stuart 212.949.9033 greg@iab.net Thanks You

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