How to Measure Your Marketing Efforts
by Larry Slusser on March 17th, 2008
There are a lot of different ideas on the web to help you in your marketing efforts. However, techniques and schemes are great, but you really need to know about the theoretical background in order to give you a foundation for moving forward with your marketing efforts.
First, there are three basic ways of making money on the internet. They are in essence, selling products, selling ad space, and selling services. A fourth way to make money on the internet is to sell domain names and websites, which is becoming more popular. However, for this article, we are going to concentrate on the first three categories, how the conversion funnel works, calculating your ROI and how to track your marketing efforts–all of this to help you make more money.
The conversion funnel is in essence the sales process and the stages of going through the process. Visualizing a funnel, the top of the funnel is the start of the sales process where there are the most people. As you continue to whirl around the funnel, there it becomes smaller, which is indicative of the amount of people that continue through the sales process. Taking 100 people as an example, only about 20 of them actually reach the completed sales stage. This ratio is known as the conversion rate.
Determining the amount of people that actually complete the sales process is easy to figure out, as you make sales. However, when trying to calculate the conversion rate, you need to know how many people enter your website and actually start the sales process.
In essence, it is important to know the start of the sales process, which typically is the landing page. If you have deemed several pages as landing pages, then all traffic from those pages will start the sales process. However, if people are just browsing, they are usually not likely to purchase something, as they may just be gathering information, not necessarily needing or wanting to purchase something.
Regardless, ensure that you are always calculating the conversion rates the same way. This will give you a more accurate number and help you to improve your conversion rate. Thus it is important to track everything.
Tracking people’s behavior will help you to know how to market to them. For instance, looking at each step of the sales process in order to optimize each stage is crucial. Another thing is to review each of the landing pages and learn how different people respond visually, helping in the sales process. In essence, if you have a way to track, then you have a way to experiment-knowing how your customers and potential customers respond to your website will help you to make changes to your site and achieve a wider funnel (sales) at the end.
Market segmentation is also important. A market segment is loosely defined as a group of people that have similar product needs or interests, are the same age, gender, etc. There are a lot of different market segments. What you are trying to do is determine what your market segmentation is for your business.
Your first step is to determine why people would want your product or service. You will have a basic idea of how they got to your site based on your keywords or the basis of what you offer. However, you need to answer the question of how to keep them there and what is your market segmentation for ensuring that you will result in a sale at the end of the sales process.
Of course you want to make money and getting people through the sales process is the only way in which to make this happen. You have determined your market segments and your conversion rates. You want to increase the amount of people into your funnel in order to increase your sales conversion rate. It is possible that different market segments will need different funnels to pass through in order to complete the sales process. Knowing the different markets will help you to better target those markets, resulting in the same thing-making more sales.
When you set your targets, do not change everything all at once. It is best to tweak a certain aspect of your sales process and see how the market responds to it. Then you can move methodically through your sales process, making tweaks as necessary and then watching your conversion rate. If the changes keep the conversion rate the same or higher, then keep it. If your conversion rate goes down, then change it back or try something different.
Having a plan and a goal and executing your plans and goals will help you to become more successful and willing to try new and different things in order to make more sales.