Imagine for a moment you want to win the Super Bowl. You take your $3 billion, buy a franchise, assemble a team and get ready for your first season. With so much at stake, it’s doubtful you’d write a check and then walk away and forget about it. My guess is you’d be right down in the trenches — measuring and testing, continually refining and optimizing your team and its players until you had a winner. And if you weren’t improving and winning, I’m sure heads would roll, or you’d cut your losses and try something else.
Why don’t you apply that approach to your lead generation efforts and customer acquisition costs?
Too many company owners I encounter build their website, put it online and then hope and pray that it works. They buy some ad space, do some marketing and wonder if it works. They don't hold these things accountable for producing profit. They never test to find out what works best.
Take, for example, a guy I was talking with at the ISC West. This guy had a gorgeous-looking website. He’d spent nearly $30,000 on it. When I asked him how it was working for him, he said not too well. “Why?” I asked. “I wish I knew,” he said.
Don’t be this guy. He violated one of the fundamental rules of business: Measure and test to find out what works best.
You’ll never know the impact of something unless you measure the results. You’ll never achieve maximum results unless you test different options to find out what works best.
Make it a priority to access and review the website performance data once a month minimum, just like you do the financial statements of your business. You’ll be amazed at what just 20 minutes of time per month will reveal.
You gain the performance data of your website using Google Analytics. It’s a free service available to anyone with a Google account. Google Analytics provides statistics and analytical tools for marketing and advertising purposes. Think of it as your profit-and-loss statement relating to your online marketing.
Google Analytics is easy for you to use. Its information is valuable and easily understood. There are plenty of short three-minute or less YouTube videos that will answer any questions you may have about Google Analytics.
Your webmaster will need to place the Google tracking code on your website. If you are advertising or doing extensive marketing on any of the big social media channels such as Facebook, you’ll want the tracking codes for those channels placed on your website pages and landing pages, as well.
Your goal is to understand how people found your digital assets (like your website) and what they did once they got there.
There are lots of measurements you can use to tell you website visitor behaviors. Work to find the metrics that are most important to your situation. Some of the most common include visitor growth, conversions, number of page views, time on site and bounce rate.
One of the major marketing numbers you need to understand is how much it costs your business to acquire a new customer. The lower your costs of new account creation, the greater your profit margins will be.
You can calculate customer acquisition costs by marketing channel. You’ll want to know what it costs you to generate a customer by each channel. You need that level of accountability. Basically, customer acquisition costs are calculated by dividing the total costs spent on acquiring new customers (the marketing costs) and the number of customers acquired during the period in which the money was spent.
Reviewing your marketing numbers holistically helps you see how everything plays off against each other, so you can decide how you want to invest going forward. Knowing where to spend your time and money, and the channels to spend them on, are critical steps to maximizing the returns on your efforts.
One of the main issues I come across in helping businesses grow is that owners just don’t know their numbers. They rely too much on instinct and intuition, and not enough on data and facts. Knowing your numbers keeps you accountable. It helps you grow. It helps you make great decisions.
