Data Driven Marketing is best explained by use of an example.
My ad is shown to 1,000 people (in Google Adwords terms these are called 1,000 impressions).
Of those 1,000 impressions, some number of people will resonate with my ad and will click through to my landing page, let’s say 10% of people seeing the ad click it, meaning 100 people have visited my landing page (in Google Adwords terms this is called the click thru rate or CTR).
Of those 100 visitors to my landing page, some number of people will resonate with my offer and will take the action that I have requested them to take. This action can vary depending on my business model, some possible actions could be to fill in a contact form, fill in an application form, ring my phone number, make a purchase (in Google Adwords terms this is called the conversion rate or CR). Let say, for sake of this example that our conversion rate is 5%, so in this case with 100 visitors to our landing page we get 5 people who take action.
Or to think of this in reverse it takes 20 visitors to get one website conversion and to get 20 visitors we are required to show our ad to 200 people.
Now, our sales funnel may not stop there.
If we have an ecommerce type business then the sale can be made on the website and the sales funnel finishes there.
If we have a business that requires leads to be generated for our sales force, then the sales funnel will continue from our lead form to an offline sales process where a salesperson will follow up with the lead and depending on your sales process for your product this may be a one step or multi step process.
You MUST know and document every step of the sales process from beginning to end and from online to offline. You MUST not only know every step of the process but also measure every step of the process for its effectiveness.
On top of knowing how well each step in the process performs you also need to know what it is costing you to perform all these steps in the process. Identify both the costs and the volumes passing through each of the steps in the sales process.
There are three actions here for you to take:
- map out every step in the sales process from beginning to end
- measure the volumes passing through each step
- measure the cost of performing each step.
In the next article we will discuss cost per action or CPA.