Is your biggest marketing problem that you can’t get enough sales? The most common story we hear is that you have invested hundreds, if not thousands, into an online marketing campaign and have yet to see a good return of investment (ROI).
Research shows that on average 97% of digital marketing does not work! Only 3% is providing a good ROI. These are not exactly inspiring figures are they?! Luckily the BarbWired team have your back and have put together some hot tips making your next digital marketing work.
Joining the 3% club
So only 3% of digital marketing is working for businesses, believe it or not that it good news for you! Why!? Because BarbWired are going to tell you some simple, but effective, tips on how you can be a part of the successful 3%.
1. How much money do you make online?
Before we we tell how to market effectively you need to understand financially what the online market is currently worth to you. How much is each lead worth to you? The first lesson in effective digital marketing is knowing the answer to this question. To spend effectively you must have a good understanding of what each online sale is worth and the data to back it up. We will start by working out two important figures, the Lifetime Client Value (LCV) and your Customer Conversion Ratio (CCR). The LCV is defined as the total dollars flowing from a customer over the entire relationship with that customer. The CCR is the percentage figure of how many enquiries turn into paying customers.
Lifetime Client Value:
Calculating the Lifetime Client Value (LCV) = Average Sale ($) x Number of Sales x Gross Margin %
- Example LCV = 49.95 x 12 x 10% = $59.94
- If on average a customer buys your product valued at $49.95 once a month for 12 months with a gross margin of 10% then you have earned $59.94.
You now have a value that represents financially what each customer, on average, is worth.
Customer Conversion Ratio:
Customer Conversion Ratio (CCR) = Number of Conversions / Number of Enquiries
- How many enquiries do you get on a daily/weekly basis?
- How many of those enquiries are you converting into paying customers?
- Example CCR = 25/100 = 25%
- Of the 100 weeky enquiries 25 are converted into actual paying customers.
Once you have worked out what your LCV and CCR are we can find out how much profit you’re marking. Let’s put those numbers into a real world example:
This has now given you a figure for how much profit your business makes through online sales. Now you are better informed when deciding how much to invest into online marketing campaigns.
To be successful at marketing your business to an online market all these tools need to be implemented and reviewed on an ongoing basis. Remember to be successful you must be in the business of marketing. Ineffective marketing will make you apart of the 97% of businesses that are missing out on the success that the 3% has come to know and love.
BARBWIRED have worked with businesses of different sizes to customise an marketing approach that is right for them. We offer businesses advice and management of their Search, Email and Social Media Marketing. If you have any questions or require assistance with your online marketing then contact us.