You know that statement “50% of our marketing efforts are working we just don’t know which 50%”? Well it turns it the stats are much better, depending on which research to believe the actual amount wasted on marketing might only be 30% or 40% - awesome!
Wasting money and time on marketing is a problem that impacts on every business and in this article I’m going to show you 5 ways to get better data about your marketing efforts to enable you to make more educated decisions that reduce this waste.
While reducing waste is great, I believe there is a bigger opportunity here for businesses who truly go the extra mile to understand their data and use it to drive their decisions. And so do others much smarter than me:
“The amount of digital data being produced today is growing exponentially… Those who become proficient in collecting, managing and analyzing this information will gain competitive advantage.” -INTUIT 2020
Further, I believe that very few small businesses are doing it (16% according to this report).
And I know why – because it’s hard.
Setting up a website? Easy. Setting up AWeber? Easy. Setting up Google Analytics? Easy.
But really taking the time to analyse your marketing efforts, working out which campaigns are performing and where to best spend your time – hard… in most cases.
And as a keen proactive business owner who is out to improve your website conversion this should be music to your ears. Because ‘hard’ means there’s an opportunity.
Here are 5 powerful ways you can track your marketing and in turn reduce waste and separate your business from the rest…
1. Advanced Custom Segments in Analytics
I’ll assume you have your website setup with Google Analytics installed and you have identified a ‘Goal’ and you are doing some conversion tracking. I’ll also assume for any online campaigns like paid advertising etc you are using ‘Campaigns’ so you can compare their performance.
But this doesn’t capture the whole story. For one thing not every piece of marketing you do can be captured in a campaign – because campaigns require trackable links and you don’t always have control over the link.
For example, if I was to visit a bunch of marketing blogs and start commenting on them how do you think the blog owners would respond if I put a giant trackable link for my URL on each comment? Or any URL different to my main homepage?
This is the case for a lot of online efforts like posting in forums, profile links in places like twitter etc.
As a business owner, you need to know where to direct your time and money and you can only do this by getting a high level picture of all of your marketing strategies, how much traffic they are sending and how they are converting.
Here are 2 charts from my dashboard app Web Control Room that show my various high level strategies, how much traffic I am getting from each and how well they are all converting.
As you can see it’s very easy for me to see where I should be focusing my attention. This chart covers absolutely every marketing initiative I am using for the launch of Web Control Room. As an example ‘AWD Advertising’ is a deal I have with a blog owner where I give him content and he gives me a free add. As you can see, while the conversion rate is high, there’s simply not enough traffic for this to be worth it. I might as well focus on creating content for other high traffic blogs where I can get a lot more traffic.
If you want to learn more about how to set up Custom segments you can check out my article on Google Analytics Advanced Segments (they’re kind of tricky).
2. Customer Value by Referrer
Not to totally bag out Google Analytics but there’s another fairly big problem with only looking at their standard data.
Google Analytics doesn’t know ‘people’, it only knows ‘visitors’ and it doesn’t keep a history of purchases. For this reason you can only really see which strategies are sending you the most initial purchases (or signups or whatever you are tracking). Long term customer value is completely excluded and this is potentially a big problem.
If you are relying on Analytics you don’t know where your best customers are coming from!
Depending on your business, there are a few ways to deal with this.
Since my business is a SAAS app (software as a service) I have installed KISSmetrics which doesn’t just track ‘visitors’ it tracks people. So I know who is logging into my app, I know what they are doing when they are in there and I know what they have done in the past. I can look at a report that shows me how they found my site for the first time and what they have done since (did they upgrade etc).
I can see not just where my visitors are coming from but where my best long term customers are coming from. If you believe 80% of your business comes from 20% of your customers, it makes a lot of sense to focus on your top customers and look to double down on the sources that sent those customers.
If your business is online sales then there are potentially 2 ways you can access this powerful data:
- Use Kiss Metrics – There’s no reason you can’t do what I have done above and track your people and the actions they are taking on your site.
- Ecommerce platform – A lot of ecommerce platforms will be able to tell you who the referring sites are and they will also have the whole history of purchases so you can achieve the same thing as above.
If your business is offline, tracking these metrics purely online is not really an option. This is where a CRM can help.
This always requires a bit more work because it means getting accurate accounting data into the CRM and accurate information on lead sources etc. This may even be a lot of manual work but without it you are guessing and wasting money.
3. Offline Campaigns
Offline campaigns are a bit trickier than online ones because you can never fully control what people click on and track them. But with a bit of ingenuity you can often achieve the same thing.
Bigger businesses will have large marketing initiatives designed to build ‘awareness’. This kind of vague measure is difficult to track but usually smaller companies will be looking at a more direct response type initiative where they are wanting people to take some sort of action immediately. This is much easier to track.
If that response is to call a number you can use phone call tracking to track specific numbers so you know which campaigns resulted in calls (and if you are diligent recording the whole cycle in your CRM you can see which leads to the most long term customer value).
For an online response, you can have a specific page on your site or even a specific domain just for the campaign (this will minimise the chance of people just going to your normal homepage). You can then either track the visits to the specific domain or if you are using a sub-page you can set up a 301 re-direct to a trackable Google Analytics URL.
The advantage of this, particularly if you can send traffic to the same site with a trackable link is you can measure this marketing initiative right alongside your other online marketing initiatives and make informed decisions about where to focus.
4. Product Metrics
Whenever I think about marketing the first thing I think about is product. I really believe that the best thing you can do from a marketing point of view is create a great product or offer a great service. Long term this will lead to the best form of new leads – word of mouth, which are free and will naturally scale as you grow the business. So think about ‘product’ as a marketing strategy and make sure you are doing specific things to improve your product and these things are tracked as marketing initiatives.
If you recall my table from above on my marketing strategies. One of mine is ‘Natural product coverage’ this is because I’m actively trying to improve my product in response to feedback and I’m making sure that places that matter find out about the product. Even before I’ve launched this is one of my top sources of conversions. The better the product, the more likely it is to get traction in blogs and sites that list apps like mine etc.
For your business it might be a totally different metric. Here are 3 things you might want to look at
One good measure for a product or service particularly one that is designed to be used regularly is stickiness. With my app for example I want people to be logging in regularly to view their stats. If they aren’t doing that then the product isn’t good enough.
So I measure how many times the average user logs into the app in a week and I try to increase this number. I use Kiss Metrics for this as you can see in the chart below.
You can see people on average log in 2.5 times per week and it’s up 10% from last week. I put this down to a bunch of new features released during the week so I’m learning that releasing new features that people like is increasing the stickiness of the app.
But even if you are an ecommerce store or an offline business you can do something similar. As long as your product isn’t a one off type product then you can measure how often people are returning to your service, or how they are using your service / product and come up with a number that you can try to increase. The more this number goes up the better your product is and the more likely they are you recommend it to others (and stick around and become a good long term customer).
2. Customer Data
Customer surveys are another way you can get useful customer feedback. Tools like Survey Monkey can be used to email customers or you can use website based tools like Qualaroo to survey users live while they are on your site.
While not everything can be quantified, I like the idea of having one metric that you can keep an eye on for your product so you can track it over time and be able to see how changes in your offering impacts on this number.
3. Net Promotor Score
Net promotor score is an example of a quantifiable score that you can use to measure how well your customers are receiving your product. It specifically asks the question “How likely is it that you would recommend [your company] to a friend or colleague?”
It can be asked with additional questions or free text of course but the raw number that comes back (your net promotor score) can be a useful measure of how much your customers like your product.
The other good thing about it, is it’s fairly well adopted around the place so you can find reports that show you the scores given to other companies which can provide a rough benchmarking guide (see benchmarking reports).
I wouldn’t worry too much about benchmarking against other companies unless you have data that is specifically from your industry. However I do think it’s a great idea to measure it on an ongoing basis to see how changes in your product or service are impacting on the overall score.
There are many ways you might choose to measure how good your product is, the important thing is you consider this to be a part of your marketing and you actively try to improve it as a way to building a long term, scalable and affordable marketing strategy.
5. Analytics Goal Values
If you are like most businesses, the goals of your website won’t be quite as simple as ‘selling product a’. You might want people to sign up to a newsletter, you might want them to download an ebook or any number of different actions.
If this is the case then just simply defining a few goals and conversion tracking isn’t really going to be that useful to you. Because the goal of ‘making a sale’ is much more valuable than the goal of ‘getting an email opt in’ for example.
This is where goal values come in. As an example let’s say you know through analyzing your metrics using the techniques above that the lifetime value of an average customer to you is $1,000 and you know that on average 1 out of every 1,000 email subscribers end up becoming customers. You can then allocate a value of $1 for an email opt in. This way you can use this number to make reasonably educated guesses on your marketing ROI and you can now compare different goals with a monetary value.
If one marketing strategy is sending you 15 email opt ins a month (worth $15) but no sales then it’s going to have good ‘conversions’ but it’s not as beneficial as the marketing strategy that sends you 1 customer (worth $20) for example.
This is not an exact science because again Google doesn’t know people and doesn’t know lifetime value but it nonetheless can provide you with data that is much better than the average business owner has.
Who’s doing it?
In my experience only highly tech savvy sophisticated small business owners are doing all of these things and as a result they are enjoying less wastage and higher chance of success. What about you? Are you measuring these things? Or are you tracking other powerful marketing metrics that weren’t on my list?