We recently set out to figure out how profitable we were on the services we offer. We knew we were bringing in more revenue than our expenses, but wanted much better clarity in order to prepare for real growth. Were we getting ROI on the services we provide? How much? Which services were more profitable than others?
So, we set out to figure out what ROI we were getting on on every piece of work we performed for our clients. What we also learned along the way was how our own marketing ROI was impacting our business.
Let me share with you our process and how it lead us to realize how much we needed to measure marketing ROI.
Cost of Skill Sets & People
First, we had to calculate the hourly cost of each individual on our team. And given there are about 170 available working hours per month this helped us figure out a fully-burdened cost per hour for each person on our team.
For example purposes, if a paid search analyst costs you $5,000 per month / 170 hours, that equates to roughly $29.41 per available hour. We also needed to include 20% overhead on each hour or $5.88. This gave us a fully-burdened cost per hour of $35.29.
Price of Each Service
Next, we looked at the skill sets each person on our team who provided various services to clients and how much time it took them to deliver that service each month or on a one-time or custom basis.We even included the cost of the software our team members use to serve our clients.
In this example, the person who cost us $35.29 per hour took roughly 10 hours per month to deliver this particular service or $352.90. We also added an additional $85 per month for the software that person used to deliver those services, a total of $437.90 per month cost to us.
In our example, we were only charging $400 per month for this service – a loss of 37.90 per month on each client using this service. So, if our sales team sold more of this service we would be losing money faster even though our revenue was increasing.
The Importance of Inbound Marketing ROI
We were getting a negative return on our investment to provide this service. Period. It was all right there in black and white.
So what on earth does this have to do with your marketing ROI and SEO? If you are not looking at what you are spending for the labor and tools to market your business and the acceptable return they are giving your business – you may be losing money — or missing out on opportunity.
Let me give you a basic example. We recently started working with a company that was getting roughly 10,000 new visitors per month, 650 registrations (6.5% conversion) for their service and 500 of those registrations were turning into customers – a drop rate of 23% (150 per month).
The price point on their service was $75 per customer. This meant they were losing about $11,250 per month just in dropped registrations. This was not taking into account any opportunity cost (loss) from added improvement in the type of traffic they were bringing in and registration conversions.
The Conversion Rate Optimization (CRO) testing along with some basic Search Engine Optimization (SEO) we wanted to begin with them would cost them $1,900 per month for 3 months, a total of $5,700.
We set out to do the following for them.
- Increase registration conversion by 1% (750 registrations)
- Decrease drop rate to 20% (still 150 drops per month, 600 sales per month)
- A total increase in paying customers of 300 over 3 months (100 per month), which would equate to $22,500
The ROI they would receive on our services 3.167. This is solid ROI for marketing spend, although it is just the beginning. (And in some cases a negative ROI is acceptable for a certain period of time, especially when you are running pilot projects. But more on that topic in future posts.)
Look here to review the definition of ROI to perform your own calculations of marketing performance.
As the marketing field continues to change and develop, keeping up with the times can be a difficult task. Marketing managers are faced with the challenge of managing and organizing their marketing teams and strategies to perform successfully on every available marketing front — and there are a lot. With so many facets to think about and so many steps involved, there is an ever increasing number of areas in which things begin to crumble and marketing strategies go from potential success to obvious failure.
Here are 5 Common Problems that Marketing Managers Face, along with 5 solutions to combat these nagging issues.
Problem 1: Inexperience or Understaffed
As the marketing field grows and becomes more complex, there is more to know, more to do, and more to track. While you may start out with what looks like the perfect marketing team, holes can begin to appear where there is a lack of knowledge or capability. This results in sub-par marketing strategies and poor performance. Thoroughly consider the possibility that your team may need to see some changes before valuable marketing results can start to appear.
Take a close look at your current team and see what improvements can be made. A general lack of understanding regarding inbound marketing practices might be indicative of a need to partner with an inbound marketing agency. There are specialized teams that partner with marketing managers to create content, track results, and generate traffic, leads, and sales, such as our team here at Fannit.
Problem 2: New Marketing Trends
As new trends appear on the market, it can be difficult for marketing managers to keep track of the changes and implement them in their own strategies. While embracing these changes would be to their benefit, keeping up with all things new regarding social media, web design, user interface, and much more, can be quite overwhelming.
Inbound marketing agencies exist to do the research and detailed work involved in deciding which new inbound marketing trends to embrace, as well as how to go about implementing them into business’ marketing. The process of figuring out which target audience matches the social media and target audience you should focus on can be left in an inbound marketing agency’s hands. They will produce the information for you, saving you whole lot of energy and time.
Problem 3: Interpreting marketing report data
Some marketing managers lack the knowledge necessary to interpret marketing report data. Without this information, they are not able to know which marketing strategies to pursue. This can decrease their ROI as they continue to utilize too many strategies, not knowing which one is performing best, or can drastically damage their campaign if they are not using the correct strategies to their full potential.
And inbound marketing agency’s role is to help interpret and translate the data received back from marketing happenings for marketing managers. Utilizing analytic software, they are able to configure reports and provide advice to managers on how to modify their marketing strategies to get the best results.
Problem 4: Lack of Communication
While there is a swirl of things going on (blogs are posted, websites are updated and the marketing strategy progresses) it is important that all results and happenings are communicated to the rest of the team. Marketing managers that do not have a working system for collecting, organizing, interpreting, and communicating their campaign data to the rest of the team are ill equipped to analyze and improve their marketing strategy.
In addition to this, poorly collected data or a lack of data can cause poor and uncomfortable communication between marketing managers and their superiors.
When searching for better communication between team memebers, many have found that the best results have been achieved by looking at 3 specific areas of a marketing strategy. First, consider how your marketing strategy is driving traffic and if it is working. Second, see how well your strategy is converting that traffic into leads, and finally, analyze how effective your sales funnel is at turning leads into customers and generating sales revenue.
To have better communication with management, work to gather and translate site data, implement call tracking software, report on successful content, and provide reports on marketing results. Don’t be afraid to show where problems are most likely occurring, and build a strategy to solve those problems.
Problem 5: Closing the Sales Loop
Putting in the effort without seeing results can be one of the most discouraging things a marketing team will experience. You could have laid out a strategy that seems to be working well, and your traffic and lead count has gone up, but your customer count will not budge. Here are two possible areas where things are slipping through.
Disconnect in Handing Leads to Sales Team
It could be that your marketing team and sales team are not quite in sync. Your sales team may not have access to the leads you marketing team is creating, or they may not have an understanding as to how to best approach the leads they are getting.
It may be that there is no system in place for approaching potential customers, or the system that your sales team has for contacting and encouraging leads isn’t working.
Some investigation into these possibilities can help managers know whether to increase more communication between the teams, seek advice on approaching leads, or restructure their entire sales strategy. This will help you to close the sales loop and enjoy the increased revenue you have been working for.
If you would like the assistance of an inbound marketing agency to help your business embrace modern day marketing strategies and reach its greatest marketing potential, our team at Fannit would be excited to help you reach your marketing goals. For more information, give us a call or fill out our contact form.
Search Engine Optimization is a terribly misunderstood field. After the tactics and methods developed for SEO during 2005 when the search engine crawlers were just getting started, many people have the general impression SEO is all about taking shortcuts and using cheat methods to get good results.
Granted, it used to be that way. But over time, as search engines and online marketing strategies have evolved, and now SEO is something much, much different.
Still, many people are under the impression that SEO is a way to get your business to win. They think SEO means higher rankings on search engines, and that higher rankings mean more clients, and that more clients means more revenue. While these things can certainly be the result of excellent SEO and other inbound marketing strategies, as a whole, there is much more to it than that. People have got the wrong ideas, and therefore wrong expectations, of good SEO.
Idea #1: SEO Is a Way to Trick Search Engines and Viewers
Because SEO has historically used backlinks and spammy keywords help sites and pages rank higher, people sometimes mistakenly assume that there has to be something sketchy in the works to get higher keyword rankings.
Reality: Successful SEO Begins with a Good Business
SEO has become a fantastic tool for inbound marketers and plays a crucial role in inbound marketing strategies. Search engine crawlers and algorithms have matured dramatically over the past several years, helping to keep dishonest tricks from being effective. Now anyone trying to find a way to cheat the system into ranking well is bound to get their hand slapped. This and growing knowledge of online marketing strategies, have caused people to stop trying black-hat SEO tactics. Instead, successful SEO starts with a good business and a solid marketing plan.
SEO is no longer about how to cheat your way to the top, but how to develop truly engaging content for viewers to discover and enjoy. Successful websites are no longer the ones that necessarily rank the highest, but the ones that can provide a quality service or product and entertain an audience.
Idea #2: SEO Will Guarantee More Traffic and Customers
Increasing the amount of traffic flow to your site automatically means you have more people interested in your product or service. This increase in attention means more customers and ultimately an increase in revenue.
Reality: No Guarantees
Most people that punch a search into the search bar are looking for something specific. Your site is now competing with thousands of others to come up in top results. Even if your site does get increased traffic, it does not mean visitors are moving down your sales funnel. Only a site that captures the right audience, directs them to relevant information, and presents good CTAs will change traffic into leads and start them down the sales funnel.
Creating customers by moving leads down the sales funnel actually has little to do with SEO. This is actually the job of CRO and good content.
In addition to this, it very well may be that higher search engine rankings is not what your business needs to generate more clientele. Statistically, most blogs rank better across social media and new aggregator sites, so spending money on SEO could end up being a waste of resources. Investing time and effort into learning what platform works best for your business will help you to focus your SEO efforts on an area that will be truly rewarding.
Idea #3: SEO and Marketing Strategies are Unrelated
SEO and Marketing function separately and are not related in any major way.
Reality: The Success of One Incorporates the Other.
SEO is not meant to be an end-all.
Rather, it can be used as an incredibly effective means to an end. SEO as part of a fully developed inbound marketing strategy has the power to attract the right clientele for your business. Optimizing your content to attract users is an organic way of improving your rankings in search engines.
Striking a balance between the right kind of SEO for your business and incorporating it into your over all inbound marketing strategy can be complex. Here at Fannit, it’s our speciality. We meet one on one with business owners seeking to improve their inbound marketing and work out a plan to help their marketing needs. For more information or a free consultation, give us a call or complete our free inbound analysis.
The last 10 years of my life have consisted of marketing products or services of one kind or another to potential buyers (big and small) all over the world. The one truth I have come to understand is that most business owners know they need SEO, but don’t know it’s true value. This leaves them feeling stuck when it comes to managing an SEO firm.
Below are some very clear frustrations companies using SEO and marketing firms have shared with us about why they switched their services to Fannit. (And, in all fairness, in our early days before we figured out how to communicate more effectively with our clients Fannit made some of the mistakes I have outlined in this post.)
My hope is that sharing the mistakes Fannit used to make can help you communicate with your SEO firm if you are not feeling they are delivering value for your business and (selfishly) persuade you to talk to Fannit if you would like to make a change in your SEO firm.
We Don’t Know What You Do, But We Need More Visibility
Ironically, when clients of SEO firms are asking to see which tasks are being done it is because the value (like higher rankings, more traffic) of the SEO work is not being experienced by the client.
For most SEO firms, this is typically a communication problem rather than the inability to do the right work or a lack of doing the work.
Think of it like this, inexperienced SEO firms are like a duck moving across a pond – the duck is moving, but you don’t see the duck’s feet feverishly paddling. These inexperienced SEO firms do not understand that their clients need to see the value of good SEO and the results of it.
Here are a few things you can ask to get better visibility on SEO efforts
- Are we ranking higher more consistently on the right key words?
- Are we ranking higher more consistently on a local level?
- Is the content we are producing receiving more traffic?
- What are we currently trying to accomplish with our SEO efforts?
These SEO Reports Are Useless Without Intelligence – Tell Us What This Means!
We all know the experience.
You receive a report at the end of the month and it might as well be written in hieroglyphics.
The reports say your web site is ranking for 10 key words, your domain authority of 50 and you have 27 backlinks. In addition, bounce rate is 65% while averaging 2.3 pages per visit with an average time on site of 2 min 12 seconds. And, to add to the confusion, the report includes a list of the 10 keywords you are ranking for as well as the change in position each word is ranking. Alright then –
Wait – what?!
Keep in mind, SEO is only a portion of the Internet marketing a premier marketing agency would be doing for your business, so only looking at your marketing in the context of SEO will always give you an incomplete picture. Marketing agencies who understand the value of strong SEO will communicate with your business in a slightly different way.
Here are a few key questions you should be discussing with your SEO firm.
- How are our rankings impacting the amount of traffic we are drawing to our web site?
- What content is driving new visitor traffic to our web site?
- How do search engines view our web site’s ability to draw relevant traffic?
- Is there anything we should be doing to improve our ability to draw more relevant traffic?
- Which content is converting the most traffic?
How Does SEO Help Us Get New Business?
The first answer most SEO firms give is the proverbial, “it’s complicated!” As you talk with these firms it might feel a bit like you are being fired upon by an ‘SEO machine gun’. As you hear words wiz by as you take cover – key words, link juice, Google algorithm, onsite optimization — the list could go on and on.
The simple definition of search engine optimization is that it is the ongoing effort to optimize how your web site is found by people searching for what you are offering.
Yup, that’s it!
Consequently, you might try testing your assumptions about how well the SEO efforts are doing relative to organic search (ie. humans typing on keyboards of all types all over the world to find things). Place yourself among the following benchmarks.
- We are being found by the right people
- We are being found, but not by enough of the right people
- We are being found by the wrong people
- We are not being found at all
If you find yourself in any one of these states, start investigating by asking your SEO firm – why?
SEO can be a complicated subject, but when it comes to understanding it in relation to how well your marketing is doing, I hope the aforementioned three areas for discussion help you start to make sense of it all and improve your results.
I recently came across an article called “Don’t Make These 5 Business Blogging Mistakes”. As someone who writes a blog post between 5 and 7 times a week, I was instantly intrigued.
This article was a great read. It emphasized that it is almost impossible for a business to survive today without an online presence. Businesses need a way to create two-way communication with their consumers and using a blog is a great way to interact.
The article shares 5 blogging mistakes businesses makes, one of which really stood out to me.
Know your target audience
Just writing a general blog post isn’t enough. You may be writing information that you think is awesome – but is it really relevant to your audience? Who is your audience? What are they looking for and why?
Before writing your post, it is important you take a step back and figure out exactly what person you are writing to. Google has a couple of great resources for helping companies find out exactly that. Google Analytics and Google Webmaster Tools are both excellent FREE resources that help define who your actual audience is.
Google Analytics analyzes your traffic to determine who your audience is, what they need, and where they are. Google Analytics can provide you with this information, and also allows you to see how your visitors are interacting on your page. See what they are looking at and what they are looking for. By knowing what blog posts your visitors are reading you can get a better idea of what content to continue writing… and possibly what not to write.
Tantamount to knowing your buyer persona is knowing how they found you. Google Webmaster Tools tells you what consumers are searching for to find your content. By understanding your search traffic and how visitors find your site you can work toward tailoring your content to your buyer persona.
Content marketing is a powerful tool – when you use it correctly. Keep your SEO marketing campaigns humming and turning a positive ROI with just a little research and some know-how.