When going into a new year or a new quarter, business owners are always looking for new ways to increase their return on investment and grow their businesses. Growth is something every business owner wants and a lot of that growth lies in how much return you are squeezing out of each process you are preforming and investing in. More and more business owners and CEOs are demanding an ROI to secure marketing budgets.
With the internet, measuring and quantifying marketing efforts is much more of a analytical science and creative data reflection then it used to be. But finding the right metrics to report on can be difficult and counter-productive if looking at the wrong numbers.
When looking to Increase your marketing ROI, all the metrics that we call business indicators are looked at. The key metrics that every business owner is looking at on a monthly basis.
- CAC - customer acquisition cost
- LTV:CAC - Ratio of life time value to CAC
- TPBCAC - Time to pay back customer acquisition cost
- L > C conversion rate - lead to customer conversion rate
These marketing metrics give management a great sense to how well each of these sections are performing so that they can manage the business through these numbers. Lets take customer acquisition cost as an example. This is calculated by taking all of the sales and marketing costs including everything from salaries, bonuses to online ad spends for a specific period of time and dividing the total by the number of new customers you acquired in that same period.
So if you were to compare two months of data and notice that you acquired the same amount of customers but your customer acquisition cost went up you need to drill in to see where the problem is. This also tells you that your marketing ROI has gone down.
First you would want to take a look through other marketing analytics and focus the problem on a specific metric or conversion rate. Conversion rates are much more complex then a lead to customer percentage, and mastering them can help you grow your business at a rapid pace. Behind every marketing metric lies a conversion rate. More importantly, a process to produce a better conversion rate.
To continue on the previous example, say you find that your landing pages are converting a lower number of leads than last month and you think this is adding to your increase in CAC. You might look at ways to A/B test them, refine them more specifically to buyer personas or insert deeper life cycle stage personalization. This might get you a better conversion rate out of each one.
Or maybe you need a new process to product, test, refine, launch and retest landing pages all together. Maybe the process doesn't account for enough retesting. Maybe there is a disconnect to how the data is collected which might affect the metric. Maybe the process is what isn't allowing for all those things like A/B testing or persona personalization to take full form.
Lets take a look at 7 ways to get the most out of every process you preform:
- Take a real time look at the process and document what you see - The first step is watching the process in action. Talk to the people implementing the process. Are they frustrated with a certain piece of the puzzle? Are they unclear to which measurement of success is more meaningful than another? This will give you a good sense of what is going on and how well it is running. If there are any steps that act as blockers or possibly just too many steps. Whatever you notice document it in as much detail as you can.
- State whats needed for the process to operate and what result the process produces - Now that you have done some documentation on exactly what is going on and where some frustration might lie, take a look at the processes surrounding the one in examination. What is driving traffic to the landing pages? Maybe one of those systems is the one at fault? Are your social media to landing page visitors down? This will reconfirm where the problem is. Or tell you the problem is more or deeper than what you thought. Now take a look at what the landing page process feeds into and take a pulse to see if any other numbers have dropped significantly because of your landing page prefromance decline.
- Determine the indicators that are used to measure the process - drill into all the different conversion rates you use to benchmark the process. These can get tricky but think creativly as well. As you discover a new way to measure a conversion rate run the creation of that process through this checklist.
- Benchmark where improvement is needed or can be injected - now comes the creative part. You are going to start brainstorming where and how you will get the most improvement in the process. The important thing to remember here is to test specific parts of the process at a time and not develop an entirely new process from scratch and start using that. Look at parts of the process that are slow, that don't align with what the result should look like, that make the process, as a whole, more complicated than it needs to be.
- Design new process flow - Once you know which part of the process you are going to re imagine, re design the process with the new step. It is a good creative way to come across a better place to input things now that you are looking at the process as a whole from a new place.
- Use among a small group and test results - First train one or a few people on the new process, put into action and measure the performance. If the performance was positive train everyone. If the performance was negative go back to step 4.
Processes are all the granular aspects of the business that are happening whether or not you have them planned out and documented or not. To get the most return for your marketing investment you need to continuously improve your processes to reflect better, more specific conversion rates that will tell you more and more about how people behave through your buying cycle.
In what ways do you keep your business growing and make sure you're investing money in the right places?
Image Credit: Berkeley T. Compton