Your marketing dollars are spent. The campaign was a success, or so you think. As far as you can tell, the campaign worked. You brought in some new customers and made some money.
Then your accountant asks you what your ROI and average cost per customer is. Your mind goes blank. The biggest challenge that companies have when building their company is not marketing their business. Your biggest challenge as a marketer is that you do not understand if your marketing is effective.
While marketing is vital to a business, research indicates that 97% of all inbound marketing campaigns fail if they do not set up analytics tracking.
That is because conversion tracking is the biggest determinant of your success. How else will you know if your marketing is profitable? Furthermore, what metrics will you use to learn from your marketing?
We want to address these questions so companies can learn what they get wrong in their conversion tracking.
Setting up your conversion tracking on Google AdWords, Bing Ads, Facebook, and Twitter is a great way to ensure you are setting up accurate tracking. However, this is just the beginning.
Study how visits come to your business and/or website. Do they come through advertising? Maybe you get traffic from phone calls? Perhaps your newsletter is the heart and soul of your business? Whatever the platform, set up analytics tracking to improve your numbers.
Even if you don’t advertise on these platforms, you still want to have access to as many different data points as possible to improve upon your conversion tracking. One of the worst excuses for not advertising on a platform is that you do not have enough data. Avoid this challenge by tracking from the start.
Let’s start with the end in mind. You need to know how much it costs to acquire each customer. This starts with understanding how much it costs to produce a product. For example, if you have a sandwich shop that sells a $10 sandwich, you need to know that each sandwich costs $2.50 in food and another $2.50 in labour to complete.
So, if you spend $7 acquiring a new customer on Facebook, you know it is not worthwhile if they only visit your sandwich shop once. However, if one out of every three new customers become a regular patron visiting your store once a month, it is a worthwhile investment.
The math is as follows: 3 months of sandwich sales from your three new customers equals$50. The cost to produce the sandwiches is $21 in advertising and $25 for the sandwiches. This means you make a profit of $9 for the first three months, and $5 per sandwich for the life of the customer.
None of this is possible, however, if you do not set up conversion tracking to analyze the value of your marketing efforts. If it takes $25 to find a customer, then you need to look at your efforts in a whole new light.
Finally, what happens if you get no new customers? How do you learn from the experience without setting up solid analytics tracking?
For example, iSpionage tracked over 2,000 Google AdWords accounts. They discovered that only 29% were tracking conversions effectively. That is because only 6% of keywords produced conversions.
The problem is that advertisers bid on too many keywords. They are too spread out, and that leads to them advertising poorly. They could improve upon these results, but the same survey reported that 42% had no conversion tracking in place at all, and that 29% had conversion tracking that was lacking. This is despite the fact that Google has added a number of different analytical tools like Google 360.
Your marketing is the lifeblood of your business, therefore make sure that you get it right with the right conversion tracking. The difference between a successful and failing marketing campaign is the ability to set up accurate tracking.
If you need help setting up analytic tracking for your business, then contact us at Shout. Our experts can help you set up the conversion tracking you need to get the most out of your marketing campaign.