How many times have we been wrong about our customer acquisition strategy?
Too many to admit.
It’s so easy to throw money at a problem than to stop, figure out where things are bleeding cash, and resolve those issues. Avoid the expensive mistakes that we learned the hard way and optimize your acquisition and conversion funnel by looking at the right data points.
Your traffic sources matter but not for the reasons you might initially think.
Sure, it’s important to keep an eye on where your gaining audiences. Everyone knows this. Most people will look at traffic sources and determine that’s where they should be spending all, if not the majority of the marketing budgets.
This reasoning is sound-spend where the audiences are, right?
Before you throw money at the obvious, determine the value of the traffic coming in:
- How much does it cost per lead by traffic source
- What’s the conversion rate per lead per traffic source?
- How much does it cost per acquisition by traffic source?
- What’s the conversion rate per acquisition by traffic source?
By having this visibility on your data, you’ll be able to determine a BUDGET per traffic source. Because traffic is traffic at the end of the day-In this way, you’re less reliant on hitting BIG numbers (which allows you to make mistakes and still ROI, but lose out bigger opportunities). Rather, you’re spending smartly by maximizing every opportunity that comes your way, with the least amount of money to make big conversions happen.
How to Acquire and Track this Data?
If you asked this question while reading this- YAAAAAAAS. Let’s get busy.
First, make sure to setup your ESP (email service provider) appropriately. If you don’t have a robust solution like Maropost or Klaviyo, don’t worry. Even an ESP as simple as Mailchimp can be equipped to take on this vital data.
The starting point is list segmentation. Create a new list (or some ESPs use the term “Tags”) based on traffic source and lead/offer generating campaign. Here’s an example:
- “Facebook – Content Marketing Course 010718”
- “Pinterest – Content Marketing Course 010718”
- “SNL – Content Marketing Course 010718” (SNL = Sponsored Newsletter, not Saturday Night Live)
- “Homepage – Content Marketing Course 010718”
- “Site Exit Pop – Content Marketing Course 010718”
- “BA/Contentmarketingcourse – Content Marketing Course 01818” (BA = Blog post and the slug)
Here, we have 5 traffic sources for the same promotion. Most started on the same date (expect for DedEmail). Make sure you’re tracking dates-time is a factor for pulling equal data.
Set Up Ad Trackers
The social platforms track impressions and conversions natively, so you’re all set there. But for the rest of the traffic sources, you’ll want the means to collect both impressions and conversions accurately.
Ad Tracker Options For Blogs/Sites:
If you’re using Optin Monster (which we highly 100% recommend btw, it’s the best). Great! Your ads on the blog will track impressions and conversions swimmingly.
SumoMe is another great WordPress plugin that tracks these two data points nicely and most importantly: EASILY. It takes maybe 2 seconds to install, and another 10 seconds to figure out how to use.
Another option is LeadBoxes (by LeadPages) that also works quite well.
Sample Size Matters
Depending on how much traffic you’re getting a day, you’ll need time to collect this data. A good rule of thumb is to allow for at least one of your tests to hit 2000 conversions before evaluating the data. Not 2000 impressions folks, conversions.
Any less than 2000 is not enough of a size to come up with conclusions, and significantly higher, you’re wasting precious optimization time.
For our internal properties, this is about 1-7 days. For brands just starting out, this could be 3 months, or you don’t know. If you don’t know, stick to the 2000 conversion rule.
Have someone check your data daily so you know immediately once you’ve reached 2000 conversions (whether the end goal is a lead or a sale. Always go after the conversion number as opposed to the impression).
Understand the Data
Let’s put some numbers behind these so you can see the logic behind this spending strategy.
Here are the results from this campaign for 1 week (and over 2000 conversions)
This is the extent of what people track: Impressions and Conversions of those impressions. Judging by this spend, it looks like the Facebook is the clear winner while the Homepage looks like a big fat failure.
So let’s spend all our marketing spend on Facebook right? Maybe a little Pinterest even?
There’s more to this story. Let’s see what it looks like when we add in the conversion elements:
IMP = Impressions
CONV = Conversions
CR = Conversion Rate
CPI = Cost Per Impression
CPL = Cost Per Lead
You can start to see how the story is vastly different when you look at the full story. But again, don’t jump to spending conclusions based on this! You have to think about the END GOAL.
If Your End Goal is to Generate Leads…
Go by highest conversion rate and lowest CPL.
In this case, you’ll focus efforts on optimizing your ads on the homepage and exit pops. You should also allocate the majority of your ad spend on Facebook. We go by the 80/20 rule in almost everything we do: 80% of the time, spend on things that work to make them work better. Spend the rest of the 20% on trying to make things work.
Again, if my goal is to generate as many leads by spending as little as possible: 80% of my ad spend will be spent on FB, with 20% being split between Pinterest, Ad Sense (for the Blog Article), and if you can get a sponsored newsletter ad for that cheap, by all means do it.
If Your End Goal Is to ROI off a Sales Funnel…
Let’s say you want to keep your lead costs under $1.00 so that you can either break even or make a few bucks on your front-end product sales. The most important pieces of info to look at are CPL and CPM.
In this case, Pinterest and sponsored ads will cause you to lose money on the front-end sale, So ZERO dollars should be spent on these sources.
Also, continue to optimize the website content and exit pop to increase those “free” conversions.
How To Put This All Together
- SET YOUR GOAL
- As many leads as possible?
- Lots of leads with the minimal spend?
- ROI off my front-end product
- Determine traffic sources
- Setup ESP Segments
- Setup Ad Trackers
- Set/watch and document initial ad budgets
- Pull data and document on a daily basis (both cumulative and the daily counts)
- Once past 2000 conversions combine cumulative stats together and determine spend budget.
It’s easy to fall into the fallacy of BIG NUMBERS ONLY AND ALL THE TIME. But the little numbers make just as much of a difference and oftentimes become the tactics for sustainability. Make the data and math work for your business before you spend precious time/resources into the acquisition.
Handle it! 🙌