The Web For Business.com Blog

Internet marketing observations, perspectives, tips and tricks for your education and enlightenment.


How to Measure Online Marketing ROI - Part 1

Mark Kawabe - Tuesday, December 06, 2016

Calculate ROI for Online MarketingMarketers (and those who hire them) want everything they do to pay off in some fashion. You're making an investment in a website, or email marketing, or social media marketing, and of course you want to see positive results. Measuring the ROI of a website or online marketing campaign is getting easier, but it still takes know-how to drill through the numbers and tell your finance department what they want to know. Here are a few thoughts on calculating the ROI of your online marketing efforts.

Getting Started

Let's say you're just setting up your business and getting all your marketing materials in order, including your website. If you have a business plan for your business, you'll probably have heard that it should be a living document. While a business plan is a good start, it needs to be adjusted as your new business meets the realities of the market. A plan is great, but being able to measure and adjust as you go is a necessity.

So, how do you calculate a projected ROI for your new website? Simple. You take an educated guess, then you launch, measure, figure out what's working and what's not working, adjust and repeat. Let's look at some of the factors that could come into play with this scenario.

Assumption: New website development cost is $10,000. Website will generate 5 new leads per month. With a closing rate of 40%, website sales will result in two new customers per month. The average value of a sale is $2000, so the website will generate $4000 in monthly sales. After 3 months, there will be $12,000 in sales attributed to the website. With a 20% profit margin, there will be $2400 in profits after 3 months from web sales.

Reality: New website costs $10,000, as budgeted. Website generates 2 new leads a month. After 3 months, there are 3 new clients, representing a closing rate of 50%. The average value of those sales is $1000, resulting in $3000 in revenue. The profit margin on these smaller jobs is only 10%, so there is a $300 profit from web sales after 3 months.

What Do You Do?

Nobody's happy when a website doesn't perform. Customers aren't happy. Developers aren't happy because their customers aren't happy. People who genuinely need the product or service being offered aren't happy either, because they aren't getting what they need. What to do?

There are many things that can be evaluated and tweaked to make a website perform better. Here are a few thoughts.

  • What is the website's reach? Are enough people coming to the website? Google Analytics is your friend here. If people aren't coming to your website, you can't expect great things from it. If you're expecting your website to convert visitors into leads, you have to make sure there are enough visitors coming to it. What can you do? Buy advertising. Better your SEO. Do content marketing - and market your content through social media and other channels.
  • How is the website converting? If 100 people come to your website every month and five people make a sales inquiry, your conversion rate is 5%. What if your conversion rate's only 1%? You'll need 400 more visitors to make up the difference. What can you do? Have better website content. Improve your CTA (Calls to Action). Make sure you're reaching your target audience. Ensure your website design, or site loading times or other on-site factors aren't turning people away. 
  • How is your sales staff converting? Unless your website is purely and e-commerce site, your sales staff are the ones converting leads from the website into customers. The website has done its job and pre-sold your product or service to a prospective customer. Now it's your sales staff who need to perform. Are they doing a good job? Do they have the tools they need to succeed? Did the website do such a good job that all your staff need to do is take the order or is there still a hard sale ahead? What can you do when sales staff don't perform? Invest in better training, systems, or people.

There's another factor to take into consideration with the above scenario. What if you didn't spend $10,000 on a website? What would you have done with the money? Would that have been money you didn't have to borrow? Would it be money you could have invested in other revenue-generating activity? While it's generally agreed that most businesses need a website, it's also true for some businesses that it's really not necessary for their success. It is possible for a business to have an online presence that's completely based on social media presence and exposure, but those businesses are the exceptions, not the norm. In the above scenario, there could also be a financial and psychological cost of not having a website. These things are difficult to measure, but not impossible.

As the title of this article suggests, this is part 1 of a discussion of how to measure ROI from your online marketing efforts. If you have questions or comments, I look forward to hearing from you. Your contribution to the discussion is appreciated.



Always Asking Questions

Mark Kawabe - Monday, January 04, 2016

Asking questions about your website's a good ideaI'm a curious kind of person. Things that interest me don't always interest other people, but that's okay. To each their own.

For you business-minded folks with websites, there are a few things you should be curious about. They're called "statistics".

<shudder>

Yes, I know. Looking over your website visit stats isn't always exciting, but it's something you should be doing regularly.

Wait - you ARE looking at them, aren't you?

If you are (or aren't), here are a few things to consider.

  1. Number of visits: obvious.
  2. Bounce rate: how many people come to a page of your website from somewhere else (like a search engine or a link from another site) and then leave after only looking at that one page.
  3. Conversion rate: how many people contact you or buy something as a result of interacting with your website. To properly track this, you need to be asking questions of everyone you do business with for the first time. Something simple, like "where did you hear about us" or "why did you choose to deal with us".

These are some of the many important statistics you should be aware of when thinking about your website. If you're not looking at your stats, you could be missing a huge opportunity.

If you need some help with looking at your statistics or getting started with tracking, please give me a call. I hope you're as curious about your website's stats as I am!

Mobilegeddon is Here

Mark Kawabe - Tuesday, April 21, 2015

Mobile-f-ing-geddon!If you're like most people, you probably haven't heard of the so-called "Mobilegeddon" that's happening today. I'm not going to say it's a good or bad thing that you haven't. Just because Google says something in February doesn't mean that it makes the papers.

So, what's the big deal? Here's the story.

Google announced in February that sites that are not mobile-friendly will essentially be penalized in search results when a search is made from a smartphone. This does not affect searches made from tablets. Yes, I know, a tablet is a "mobile device", but Google treats tablets like desktops when it comes to searches.

What does "mobile friendly" mean? Fundamentally, Google's philosophy has now extended beyond getting people the best, most relevant search results. Now they want top ranking websites (on mobile) to have unique content, lots of social media and other relevance AS WELL AS a great user experience. These days, "great user experience" when viewing a website on a mobile phone means having a responsive website. The term "responsive" means your website has a layout that RESPONDS to fit various screens. Having a responsive website is now more important than before for many companies.

What this means for most businesses is . . . well, that depends.

If your business gets a significant portion of its web traffic from people using mobile devices, you could be in trouble. This depends largely on how people search for your business. If you run a coffee shop called "Higher Grounds Cafe" in Niagara Falls, for example, you may not be found as readily if someone does a search for "niagara falls coffee shop" or "niagara falls cafe". However, if people primarily search by your business name, you probably won't lose visitors searching on mobile devices.

Another perspective is that if your business operates in an industry where your clients aren't likely using mobile devices to search for a company like yours, you shouldn't be losing sleep over this change. Chances are that a person making a major purchasing decision will not be doing all of their research on a smartphone. If you sell office equipment or machinery or are generally a B2B type company, you may not notice any decline in your site visits.

I agree that "Mobilegeddon" may have a significant impact on many business' rankings in mobile search results. On the other hand, it's also true that MANY businesses already have poor rankings with their websites and are not getting great amounts of search engine traffic from non-brand (i.e. company name) searches. If a website is already ranked #25 for a search and it ranks #35 after Mobilegeddon, will it truly make any difference?

My suggestions for dealing with Mobilegeddon:

  1. Don't Panic. It was good advice when The Hitchiker's Guide to the Galaxy came out and it's just as relevant today.

  2. Look at your website. Is it responsive already? If so, relax.
  3. Check your search engine rankings. Do you rank highly for a number of relevant searches? You might want to preserve that. Don't rank well at all? Well then, you might as well skip to #4.
  4. Check your website statistics. Do you have Google Analytics? Good. You can see how many searches came from mobile.
  5. Create a responsive website. I know - this is definitely easier said than done. I can help, so contact me.
  6. Act. The majority of business owners and entrepreneurs truly care about their search engine positioning. Most do nothing about it. If you're one of the ones who acts, you'll have an advantage over those who don't.

Another important point to consider is that according to Forrester research, between 2004 and 2011, the percentage of consumers who cited "search engines" as the way the found websites declined from 83% to 61%. One can see that while search is important, it's not the only factor involved in how you can draw attention to your brand and your website. Maybe your website is not mobile friendly. Perhaps you might be better off strengthening your brand on social media to get more visitors rather than investing in a mobile friendly website.

In short, Mobilegeddon may be a huge thing or nothing for your business to consider. If you want some advice, please contact me and I'll answer any question you may have about this topic.

 

Do you measure?

Mark Kawabe - Thursday, February 16, 2012

And how?

Do you rely on statistics from your ISP to know how your website is performing?

In my opinion, most of the stats I've seen from ISPs are useless.

It doesn't take much to install Google Analytics. It's free.* It measures most of the things you need to know about your site's performance.

Do you have it installed? If not, you can have it installed today. In most cases it should take around 15 minutes by an experienced website developer. Budget 30 minutes if you call someone unfamiliar with your website to do the job.

 

*Free: depends on your perspective. There is no financial cost to use Google Analytics. However, you do give Google information about your website's performance. Whether that matters to you or not is up to you.

Businesses are NOT my Facebook Friends

Mark Kawabe - Monday, November 15, 2010

I received yet another request from a business on Facebook to be a friend. Here are six reasons why I don't recommend businesses use personal profiles on Facebook to market themselves.

  1. It's against the Facebook terms of service and if someone complains or Facebook decides to enforce their rules, all your work will be for naught.

  2. There is a limit to how many friends you can have (5000) for both personal profiles and groups. There is no limit to how many can "like" your business. What happens when you hit your limit? (Think WHEN, not IF.)

  3. You can't message all your friends at once. You can contact everyone who likes your page in one fell swoop. This makes communication much easier.

  4. Facebook pages for businesses can be customized through the FBML application. Profile pages and GROUP pages can't be. For a business trying to put its best face forward, this is important.

  5. Pages also give you demographic information as well as usage information. Profiles and groups don't. If you're going to put effort into your Facebook marketing, shouldn't you have some ability to measure how you're doing? If so, then a Page is definitely for you. If you're a Google Analytics user, you can add tracking code to your main marketing page. You can't track the wall of your page - only the FBML page you've created - but it's better than what Facebook provides.

Marketers know that measuring results is vital. How do you know if you're succeeding otherwise? Pages give you the ability to directly market and measure. If you have a personal profile AND a business page, you'll be able to reach people in two different ways on Facebook and it's the combination that in my opinion provides the best value for marketers.

Happy Marketing Monday!