Week two: Marketing and conversion funnels for startups. Get your lead on.
Repeat after me: Marketing is a science and your business is an experiment. Hypothesis > test > result > repeat.
In week two Amcom Upstart participants were provided some great information on understanding conversion funnels in marketing. It was suggested there are five ‘core points’ which need to be understood in intimate detail to truly understand how people engage with, and purchase your product or service:
How many people are interested in what you are doing? How can you measure this? Firstly implement simple things like looking at google analytics. Observe how many people are actually going to your webpage, and what pages on your site they are looking at.
Secondly, collect their email address so you can contact them again later to more directly tell them about your product. Try adding SumoMe to your webpage or a landing page which collects email addresses painlessly so you have a way to further connect to people interested in your product.
If you are having a chat in person or at a conference, you can collect a phone number or business card so you can keep in touch and give the update them on what you’re business is doing if it is relevant to them.
Cost per lead
How much does it cost you to obtain each lead?
Some of these costs are direct marketing costs for adverts on Facebook, Google, LinkedIn, in print media, through flyers, radio or television.
Each advert, page impression or meeting will cost you money. It is useful to figure out exactly how much it costs you to get someone to look at your page. So how many page visits do you get for each GoogleAd you run? Being able to do the basic maths on that will allow you to understand your cost per lead.
It is useful to try and test each contact medium (Facebook Ads, Google Adwords, LinkedIn Ad etc) in a clear experiment to begin to understand how each one works.
It is important to know how much traffic they direct to you, when they direct traffic to you (and when they don’t), what type of traffic they direct to you. For example there is no point in get a whole heap of traffic from China, Uzbekistan or New Zealand if you aren’t actually able to sell your product in that country. If you know this information you can put your marketing budget towards mediums which actually attract the highest comparative rate of page views for the lowest cost. This might not end up being the cheapest type of ad, but it will be the type which directs more appropriate traffic than others.
For each lead which is directed to you, how many of them actually purchase your product or service? How many are converted from simply perusing what is on offer, to purchasing it. If you can improve your quality of leads, or more directly target the people who are most likely to be searching for your solution you can improve the number of people who buy your service.
How much are you actually selling your product for?
If you increase your transaction price you may increase your revenue. However if you increase it too much you may well decrease your sales. Finding the appropriate price point to maximise both sales as well as revenue is a matter of repeated experimentation.
Transaction frequency is how often people purchase your service or product from you. If you increase the frequency of transactions, you should be able to increase your revenue.
Change and optimisation.
To optimise your marketing you need to experiment with and challenge each of these points in your conversion funnel.
Lesson 1: Marketing is a science experiment.
Measure everything. Test everything. Marketing is not just based on hunches. It is based on educated guesses, which you try, test and see if the results match your initial hypothesis.
Lesson 2: Get data.
To be able to experiment to gain true results firstly you must be collecting data points.
If you aren’t collecting and storing data on what you are doing you will never actually know what is going on. If you don’t know what is actually going on there is no way you can make an educated decision based on evidence.
Lesson 3: Make EVERYTHING you do a tiny experiment.
Change the time of day/colour of your website/words in your email subject line/ add in a sale when you send out your campaigns. Try A/B testing. Each time you do ANYTHING make it an experiment, keep the results and compare them to previous results to truly learn what influence each variable has on the outcome you are interested in.
Lesson 4: Do not test too many variables at once.
As a simplistic example, if you attempt to concurrently run a Facebook ad campaign and an Google Adwords campaign it will be difficult to determine which one is actually having which influence on your site traffic. Make sure you are keeping a very close tab on the outcome of each experiment and separate them enough so you can understand the outcome of each.
Lesson 5: Tweak a variable and repeat the experiment.
Try experimenting to shift each of the points in your conversion funnel individually to improve the efficiency of what you are selling and to garner a better understanding of how each component of your business is inter-related with the others. Don’t think that one result is the truth of the situation. Make sure you test your hypothesis and test it again as changes over time and in the world around you may influence your experimental results.
Once you understand how your conversion funnel works you can optimise what you spend your marketing money on to spend the least amount of money for the biggest impact.