When it comes to metrics, there are so many reporting systems and parameters to choose from. You can get overly excited by numbers like CTRs and unique users. There’s also a chance you might be overanalyzing the figures and reading too much into certain metrics. Even with a tool like Google Analytics, which is meant to measure important data, there are too many metrics to measure. While data is significant, it’s easy to go on a deep dive into the numbers, and lose sight of your overall objective and what you’re trying to accomplish. Learn what metrics to focus on, create a plan and stick to it to get the right story from all these numbers.
Why Bother With Metrics?
Why do we measure metrics? Well, when we put content out there, we want to know how it’s performing. Part of understanding the success rate behind the post or blog is having numbers to measure. When we start to look at different metrics, such as views and clicks, we begin to get a sense of how the content is performing. Without measuring, there’s no way to tell if anyone is even looking at your content … which is critical. So, it’s essential to analyze these numbers and make sure the content you’re developing is actually reaching the audience you’re targeting.
There are multiple ways to segment your target audience. You need to critically think about what appeals to that group of people, their interests, and what type of content is appealing to them. Take a website, for example, and look at the behaviour of the entire audience that is engaging with that brand. The data can be spliced into how they found you, what they clicked on, what they searched for, and the search terms used to find said website. Segmentation is done using prehistoric data that we have, as well as present data to measure current interaction with our website.
The Funnel – The Path to Purchase
What is the funnel? The path to purchase is getting our audience into this flow and filtering through to the ones that are interested in our content, offering, services or product. As potential customers move through the funnel, you get closer to people who are interested in your products and services. In each stage, there are certain barriers, which are the challenges and concerns the audience has about your offering; there will be dropouts along the way. In the beginning stage, ‘Awareness,’ you should create content that addresses issues your audience is facing. Take a skincare brand for example. In the awareness stage, they aren’t quite thinking about ingredients yet, but about their skin concerns and why they need skincare products. This is when you develop content that speaks to understanding skincare. Once they move down the path, we bring them along with us to ‘Consideration’. We’ve answered some of their questions, they enjoy the content they’re getting from us, and the brand is addressing their concerns. They now want to know more! They are now considering buying skincare products from our brand, as well as looking at our competitors and other brands. Of course, we want them to go with our brand, so we talk about how unique we are, about our clean ingredients and show off our influencers. Once we move our audience into the next stage, ‘Conversion’ (again, there will be dropouts here too), we’re now in their top two choices in terms of selecting a skincare brand. In the conversion stage, the communication becomes geared to our products, where to buy them, and pricing. We want to get our audience to a point where they very interested in buying from us. An example of a piece of content we could send them is the ‘We saw you eyeing this in your cart’, type of email.
One thing to remember is that everyone that is coming into this funnel will be at a different stage. We can’t make the assumption that everyone is starting at the same stage, so the strategy should be to have an Awareness drive that is consistent throughout the year combined with a Consideration and Conversion strategy that is interspersed throughout the year. That way you don’t miss anyone!
ROI – What Does It Mean?
ROI (Return on Investment) is a term that gets thrown around a lot in conversations, but what does it actually mean? It’s how many sales am I getting in return for how much I’ve spent. In the digital space it could be hours that we’ve spent creating content and putting it out on various platforms. Or it could be the actual spend of buying media in order to get a return. That return must be quantified, it must be measured.
When you have a product, measuring ROI is very easy. For example, if your product cost is $10, and you sell it for $15, how much of that $5 profit can you sacrifice to continue to promote this product to make more sales? If you have a profit of $1 and spent $1 on promotion, then you have a 1:1 ratio and made no money, which is not ideal. An ideal ratio is 1:8, which is achievable through strong targeting and accurate audience conversion.
In a service-based industry, it can get a little complex. Because ROI is measured at the Conversion stage of the funnel, it is not logical to measure Consideration and Awareness. For service-based businesses, this means it doesn’t make sense to measure the ROI on web page clicks and social media followers. While you can quantify website traffic, you need to go back to your marketing objectives and think about the funnel. For example, if your website has a ‘Contact Us’ form, and a potential customer fills it out, great! You now have a lead. An account manager would follow up with an email or call to qualify that lead. If he or she is qualified as a customer, the next stage is to develop your proposal to show how your business can help them, moving them down lower the funnel to Conversion. Here’s when you’d do a demo or workshop to showcase your work and the impact. And after all that, this potential customer is either so convinced of your work and abilities that they want to sign with you, or they aren’t convinced, and don’t sign with you.
During this entire process, the customer is moving along the funnel, and you are incurring costs at each stage. From the minute they submit the ‘Contact Us’ form to the point where they sign with you, that’s what we need to account for in the calculation of the return on investment. If they didn’t sign up, unfortunately, there is no ROI, just expenses. Service-based businesses are not like product-based businesses. The service-based contract can be between $25,000 and $50,000, so you can feel comfortable with your advertising spend, even though signing these contracts can take several months, even up to a year. But the ROI? 100% worth it.
Determine Key Metrics for You and Stick To Them
If we know these product and service industry lifecycles, we can use the funnel to calculate the appropriate time of the year to hit with Awareness, Consideration and Conversion ads. While segmenting audiences, pushing content and optimizing ads are great, it’s important to quantify ROI immediately, regardless of if you have a service or product-based business. If everyone is on the same page about the numbers, a strategy can be created and implemented that will lead to a successful outcome.