Everyone is fixated on numbers. Big data and analytics are finding their way in all aspects of business and everyday life. We log our steps with fitness trackers. Count calories and track our macros. Major League Baseball boasts “exit velocity” to measure how fast a ball leaves the ballpark. Do we really need to know this? A homerun is a homerun, regardless of the speed it jumps off the bat. But I digress.
Metrics are everywhere and because they are, the propensity to track, analyze and manage everything is tantalizing. We use data – large and small – to (hopefully) gain perspective and understand the “bigger” picture. But often it’s the data that creates “analysis paralysis” if not properly managed.
One of the biggest metrics in marketing is conversion rates. Quantifying conversions are critical to the performance of any marketing campaign. But this metric can be measured differently, depending on who you ask.
We recently helped a client implement a social advertising campaign. The goal was to drive prospects from Facebook and Instagram to a landing page where a free trial would serve as the lead magnet. From this, the sales team would make calls to schedule a free trial. Once the prospect completed the free trial, the normal follow-up would be made to close the opportunity.
Although this scenario is simple and typically used to support marketing campaigns every day, tracking the “conversions” can be arduous, as data lives in various formats, applications and channels (we discuss this further in this Math of Marketing post). It is important to define what a conversion is. After all, there are several conversions in this scenario. Let’s deconstruct it further.
Facebook and Instagram provide metrics on how many impressions the social ad received as well as the clickthroughs and a host of other details (we will call this conversion rate 1). Then Google Analytics provides metrics on page visits, how long the visitor stayed on the page, the bounce rate, etc. Based on a host of variables, there is usually disparity in the numbers Facebook and Instagram declare compared to Google.
Then there is the application that powers the form on the landing page. It is either a marketing automation system or CRM tool that enables the sales team to manage the information submitted through the form (conversion rate 2).
After sales schedules the free trial (conversion 3), and the prospect actually shows up (conversion 4), follow-up inquiries are made to close. Assuming a sale is made, conversion 5 is arguably the most important as it closes the loop on this circuitous workflow process that straddled multiple systems and data sets.
The simple answer on conversions and how it relates to marketing return on investment is to measure the inputs (social ad budget, marketing and sales personnel to manage and close the lead) against the output. But the aforementioned scenario shows it is not that simple and requires the orchestration of many different resources.
Regarding our client, 200 clickthroughs from Facebook and Instagram resulted in 150 visits to their landing page, 25 form completions and five deals (to date). Their $2,500 investment yielded $15,000 in new business – a 6X return on investment.
Numbers help us track performance. The key is understanding how they specifically tie back to your marketing initiatives and strategic business goals. Metrics can help make better decisions, but only if you know which ones to pay attention to.