In a previous post, we talked about having an unlimited marketing budget. But knowing what is working, and what is not, is the most difficult part of your marketing plan. How do you know if a campaign, or one of your 10 marketing strategies, is worth it? We have to go back to the basics of how to gain customers. In your financials, the number of customers is calculated by taking the number of leads (prospects) and multiplying it by the conversion rate. Your conversion rate is the percentage of leads that purchase from you. To make it simple, the formula is:
CUSTOMERS = LEADS x CONVERSION %
What do you have control over? It’s not number of Customers. The number of Leads, or Prospects, that come in the door, call the shop, or request a quote. Increase this and even if 10% of your Leads buy from you, then you’ve increased your revenue. But what if you increased your conversion rate? Take it from 10 to 20%. You’ve just doubled your money.
Here’s some ways to measure the Return on Investment (ROI) of your Marketing plan:
INCLUDE ALL THE COSTS
Let’s say you decide to do a Facebook Advertisement for a new event that you are going to launch. We love Facebook advertising, because it is inexpensive, has very specific targeting mechanisms, and the analytics are easy to use. Even just $3 a day for a week ($21!) you’ll get some link clicks, event responses and more. Think about this though – are you hiring an expert to place these ads for you? Experienced Marketers who know Social Media Marketing are typically $100+/hour. It takes time to create the content, whether photo or video, determine the targets, navigate the Ads Manager, and read the analytics. All of this needs to be in your budget.
USE LANDING PAGES & COUPONS
Once the campaign is out there, and you are using 10 marketing techniques as we suggest, how can you know which campaign is the one that worked? In our firm, we use Landing Pages and Coupon Codes. Our Marketing Magician, Julie, can tell you from each click to sign up to our email list where they came from. How? By making a destination for each person to click through that is unique to their source. If you’ve listened to any commercial on the radio, if they are sending you to www.mycompany.com/123, that’s a sure sign that it’s a landing page. Click through from www.freegiftfrommycoach.com/facebook? The landing page looks exactly the same as www.freegiftfrommycoach.com/instagram to the consumer. But there is a lot of data and analytics that live behind those websites. We use mailchimp.com for our landing pages, but there’s a lot of services out there such as unbounce.com, kajabi.com, and more. Landing pages should be simple: give the prospect only one choice – the one you want them to make.
Coupon codes are also a great way to track how customers got to you. The majority of e-commerce sites allow you to do multiple coupon codes and you determine the discount. Coupons also work in many different mediums, like print, television, radio, direct mail, and digital. There’s no reason you can’t have several codes that give the same discount. Track the usage of those coupon codes and you’ll see which sources are driving your traffic.
Once you’ve figured out the costs of your form of marketing, then calculating the cost of acquisition is the next step. Let’s say you spend $50 promoting an event on Facebook. You’ve got the event set up through either paid online events or Eventbrite, you’ve paid a content creator (or accounted for the hours that your in-house marketing team spent), and you’ve come up with a total cost of the campaign of $250. Eventbrite takes a fee of 3.5% plus $1.79 per ticket. Let’s do the math:
Using this example, you’d have to subtract the cost to produce your event from the bottom line.
One metric that we look at when it comes to successful versus unsuccessful marketing campaigns is Cost of Acquisition. In the example above, the cost of acquiring 15 new customers is $303.10, or $20.20. That is a successful campaign. Remember, it’s a whole lot harder to acquire new customers than to keep the ones that you’ve already got. Those 15 people are now in that group. If you can get them to return to you, or sign up for a recurring program, they now have a much larger lifetime value than $29.80. You only selling one ticket, though, means that you spent more than you made on the total campaign.
Remember, successful marketing takes time. Marketing is like farming: you have to plan the plot, cultivate the soil, plant the seed, have the proper amount of water and sunlight, prune the plant, and eventually it will bear fruit. Eventually, with a successful marketing strategy, customers are going to find you before they find them.
Need help developing a marketing strategy for your company? Is Social Media overwhelming? Are you posting on social media every day but no one is buying? Is your marketing team out of great ideas? We can help. Schedule your no-cost, no-obligation business or marketing analysis today.