One of the biggest opportunities that B2B and service-based businesses and marketers have today is understanding the impact that digital marketing efforts can have on their bottom line.
Have you seen responses like this if you asked your marketing team or agency how marketing efforts are impacting your net income?
- 30% increase in traffic from SEO
- 500 more followers and 20% more engagement this month on social media
- Blog post impressions are up, or the consumer spent more time reading our content!
- 30% more traffic from our target keywords in Google Ads!
- Our email program open rate is above industry averages!
- Or 100 more conversions this month from our efforts!
While growth in these metrics is promising and can be good indicators that marketing efforts are trending the right direction, they need to go a step further. As a business owner or organizational leader, you need to have a clear picture of how those metrics and your marketing efforts are impacting your bottom line.
Conversions Are Good, But Customers Are Better
- If your marketing department or current agency is showcasing the 100 “conversions” they got you last month but not how or if those conversions turned into customers or sales for your organization or business, it’s time to ask them some more questions. What is a conversion, and why should I care?
- If we had 100 more conversions this month, why am I not seeing that in our revenue?
- How does a conversion impact my bottom line?
- How is my marketing team or agency vendor making my bottom line better with “conversions?”
How to Connect Marketing Efforts to Sales Processes
The first step in getting a clearer picture of what conversions means to your business starts with connecting your marketing efforts to offline sales.
Why is measuring offline sales important?
While ecommerce continues to be a major driver of economic success, it still only accounted for 16% of retail purchases in 2023. When you look outside of retail into the service sector or B2B lead generation space, that number drops even further.
For well over a decade, the ability to take things a step further and measure “sealed deals or actual business won” vs. conversions has been an option.
So, while conversions are a step in the buyer’s journey to becoming one of your customers, a conversion isn’t the most impactful metric.
Let’s do a hypothetical. Our first assumption is that you want customers. Probably not a stretch. You have a budget of $10,000/month in marketing and advertising to acquire new customers.
Our second set of assumptions is that your marketing department or agency of note at minimum:
- Identified your ideal customer profile/target audience.
- Discussed what an ideal customer acquisition cost is with your current margins.
Digging Deeper in Your Reports
In this hypothetical, your ideal customer acquisition cost is $250.
Our third assumption is that your marketing department or agency delivered a marketing report or dashboard. I really wish I wouldn’t have to use “assumption’ here, but to this day, E-Power Marketing still talks to prospects that don’t get any data, let alone real data on performance.
Your report might include some of these common metrics: impressions, clicks, traffic, followers, likes, time on site, open rate etc. While these are all potential indicators of successful marketing, they still don’t answer your question.
Your report might also show that you got 100 conversions or leads.
Your marketing team or agency is patting themself on the back for those 100 conversions or leads because the cost per lead was “only” $100, which is a benchmark according to “insert whatever source you want.” Trust us, $100 per lead is great!
There’s a problem with those metrics and the math.
- It’s estimated that only 25% of these conversions are legitimate, and the bulk are spam and vendor solicitations. Now we have 25 legitimate conversions.
- But how many of those 25 remaining conversions are qualified?
- Are they looking to buy now? Are they the right size client? Do you service that region?
- Your report may not tell you. Let’s say optimistically of the 25, about half are qualified, bringing that 100 leads to about 12.
- Of those 12 qualified leads, how many was your sales team able to close? You still have to deal with pricing, timing, etc.
- But you have a killer sales team, and they close 50% of those leads, winning you 6 new customers!
You just lost $8,500/month
You just paid $10,000 for 6 customers, with a desired customer acquisition cost of $250 per customer. Your marketing department or agency was patting themselves on the back for losing you $8,500 a month.
How You Can Fix Gaps in Your Marketing and Reporting
The answer is complex. There are many ways to improve customer acquisition costs, but the right fix depends on the size of the organization and the kind of offline activities you need to track.
- Store visits
- Phone calls that led to offline sales
- Coupons/promos
- Tradeshows
- Traditional billboards, magazines, and other print
What happens when an organization can finally connect marketing efforts to offline sales?
The consumer journey and marketing aren’t linear
While I advocate for the connection between marketing and sales, I want to be clear that, in many cases, that journey isn’t linear. There can be multiple touchpoints on a consumer’s path to purchase. Attribution modeling, while helpful, can be messy. But that doesn’t mean you shouldn’t attempt to understand the data.
The moral of the story is that you deserve better. You deserve a marketing agency that will go the extra mile and strive to connect marketing efforts to actual offline revenue. Contact E-Power Marketing today.
With decades of marketing experience working with hundreds of clients across multiple industries, Justin is passionate about helping clients exceed their goals in an ever-evolving digital landscape.
An ever-curious soul with an insatiable hunger to always beat the previous best, Justin found marketing to be the perfect outlet for his desire to use marketing efforts to drive sales results. Justin started his career in marketing as an E-Power Marketing intern. Since then, he has worked in a variety of roles and joined long-time colleagues Adrian and Ellie in 2021 to purchase the agency and officially add “business owner” to his list of titles.
Throughout the years, Justin has led dozens of successful marketing programs by developing and implementing complex digital marketing strategies. He has an impeccable knack for understanding trends in marketing and technology to envision, develop, and deliver new capabilities that drive business growth and boost a brand’s impact through a cohesive, omnichannel approach.
