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The aim of this article is to show you the most effective method by which to improve the ROI from your marketing spend. The solution will cost you almost nothing, and will not involve changing your online marketing activities at all. The secret is to tune your site to reduce your Cost Per Acquisition. This is done by examining your Conversion Funnel.


Cost Per Acquisition


When people arrive in your site you want them to do something; this is your “Target Action.” Some companies use their site to create leads for their sales team, in which case the Target Action is getting the visitor to fill in a contact form. For ecommerce sites the Target Action is an online purchase. How much it costs you to get someone to engage in your Target Action is your Cost Per Acquisition, or CPA.


Here’s an example using the Web’s average numbers: You’re running Google AdWords and paying 50 cents per visitor, which is the average bid. The percentage of those visitors who engage in your Target Action is 2 percent, the Web’s average Conversion Rate. This means it takes 50 visitors (at 50 cents each) to get one Target Action, so your Cost Per Acquisition is $25.00.


The Conversion Funnel


People arrive at a Landing Page, then go through a series of pages before deciding to engage in your Target Action. The path they follow from Landing Page to Target Action is their “Conversion Path.” At each step in the Conversion Path some visitors will leave the site. This creates a funnel of decreasing numbers at each step in the path. This is called the “Conversion Funnel.” 


Case Study: Motoreasy


One of our clients in the UK is Motoreasy, a company that sells extended auto warranties. They sell policies online and they also have a telephone sales team. Thus they have two possible Target Actions in their site; get people to purchase online or get people to fill in a contact form for the tele-sales team.


We run a search marketing program for Motoreasy, consisting of search optimization for native listings, and PPC advertising. There is also a good affiliate program that we created for them, and they have developed special relationships with large online properties (such as major newspapers) that include dedicated content on their sites. Motoreasy also runs TV and print advertising, direct mail, PR and all the other elements you’d expect from a well-rounded marketing program. 


Clearly, there is no marketing base that Motoreasy hasn't covered. Our task is to improve the ROI on all this activity without actually changing it or spending any more money. 


The way to improve ROI on any marketing budget without changing the program is to decrease Cost Per Acquisition. This is done by increasing the percentage of traffic to your site which engages in your Target Action. This means you have to improve the performance of your Conversion Funnel. You do this by making sure the marketing message you used to get people into the site is consistently and clearly communicated down the entire length of the funnel.


Motoreasy’s Web site is designed to give you a quote for an extended auto warranty on your car. This involves completing three short forms that will then deliver a price. If you decide you want to sign up, there are then another three forms you must complete before you get to credit card processing. This all may sound a little lengthy, but bear in mind that we’re selling a heavily regulated financial product and that there are strict legal guidelines in the UK regarding this sort of thing. 


To start with, I split the Conversion Funnel into two parts: from landing page to quote, and from quote to sign up. I then decided to focus on improving the rate of quotes first, because two out of three people who started the quote process failed to complete it. 


Analysis of a Conversion Funnel is fairly simple: Look at what percentage of people who see the first page go through to the second one and what percentage of those go through to the next, and so on. It’s more important to know the Conversion Rate for each page than for the path as a whole. What I could see was a fairly constant bleeding of visitors throughout the path. The fact that as many dropped out at the beginning as dropped out at the end told me the customers weren’t simply getting fatigued, so it had to be something to do with the content of the forms themselves.


The design of the forms you had to fill in was fairly formal, as you’d expect from a financial company. There was lots of good stuff before you got into them about the benefits of the product, and a very high percentage of visitors entered the quote process. However, once you got into the quote pages these messages were absent.


I worked with their design team on a new design that kept communicating the message. The first place people look at on a Web page is the top-right quadrant, so we put the primary message there. We moved terms and conditions to the bottom and put content around the form that kept pushing the benefits (which had motivated people to start the quote process in the first place).


In other words, I was selling the visitor on the benefits of completing this form.


This is core marketing: Tell people what you want them to do (fill in the form), and then tell them the benefits of doing so (you’ll get a quote which could save you money).


In addition, we didn’t want to completely lose the people who were going to give up. So we put the telephone number prominently at the top, making it easy for them to call if they found filling out the online form too tedious. We gave them access to a very short contact form that retained any information they had already provided. 


These changes reduced the drop out rate from 65 percent to 29 percent overnight. This may still sound high if you’ve never seen these sorts of figures before, but the average across the Web is actually 40 percent, so Motoreasy now was achieving above-average performance. In addition, over half the people who didn’t complete the quotation process used the telephone number or contact form. By doing this, we more than halved Motoreasy's Cost Per Acquisition on delivering quotes.


Having proven that the absence of the marketing message from the forms was the problem, I applied the same logic to the sign-up forms. I wanted to motivate the customer to complete the sign-up process. I already knew that the message appealed to them: They’d gotten a quote and then decided to sign up. Therefore, all I needed to do was keep reinforcing that message. This increased the completion rate from 29 percent to 69 percent. Motoreasy also found that this doubled the percentage of people who completed the credit card processing form, even though this page hadn’t been changed.


In other words, continually motivating the customer by reinforcing the core messages gave them the impetus to go through the commitment stage and submit their credit card details.


By the end of this process of Web analysis and redesign Motoreasy increased its business four-fold, without increasing marketing spend at all.


Conclusions


There are a number of lessons to be learned from this. Your site doesn’t have a single conversion rate. It’s not a monolithic block. People interact with a series of pages, each of which can win or lose the visitor. The messages you use to get people into your site need to be reinforced within the site. You need to analyze the paths from the landing pages to the target action page, looking at the drop-out rate for each step. Where those paths are under-performing you need to examine them to see if they keep reinforcing your core messages.


Marketing doesn’t stop just because someone has come to your site: You must keep communicating with them. You must monitor and improve this performance by analyzing your Conversion Funnel. This is how you get more business without increasing your marketing spend.



Brandt Dainow is CEO of Think Metrics, creator of the InSite Web reporting system. Read full bio.

Twitter can be an invaluable tool in your arsenal when your brand or company is plunged headlong into a crisis. However, it depends on how you use it.


At the 140 Conference, Mike Prasad, the brain behind the Twitter sensation Kogi BBQ, spoke about how savvy use of his Twitter account helped Kogi one-up its competitor, Baja Fresh.


This summer, when Baja Fresh announced a new item on its menu -- the "Baja Kogi Taco" -- Prasad was understandably shocked and concerned that Baja Fresh was "ripping off" Kogi's trademark name.


Prasad and @kogibbq wisely refrained from going on the attack and, instead, allowed followers to voice their unhappiness at Baja Fresh itself.


Within hours, Baja Fresh was overwhelmed with a deluge of tweets criticizing the company's move and declaring their support for Kogi BBQ.


Baja Fresh, unable to ignore the power of Twitter, set about changing the item's name from "Kogi" to "Gogi," another spelling of the Korean transliteration for "meat." 


 


This move alone could have settled the crisis. In an effort to conciliate the Twitterverse, however, @BoldBajaFresh replied to almost every single one of the disgruntled tweets. Each of the replies mentioned and sometimes praised its competitor, with phrases such as "Kogi truck is in a class of its own" and "Kogi taco truck is a marvel."


Kogi BBQ, by wisely refraining from tweeting extensively on this issue, emerged from this episode looking classy and unscathed, secure in the power of its loyal and passionate core audience.


Baja Fresh, on the other hand, not only had to do an embarrassing about-face, but wound up dedicating its Twitter stream -- for a brief period of time -- to lauding and praising its competitor.


Two very simple rules on when not to tweet can be gleaned from this episode:



  1. Don't tweet when your followers can tweet for you. Allowing your core audience to shout your brand message from the rooftops is infinitely more powerful than you doing it yourself.

  2. Don't "tweet down the food chain." Baja Fresh was the bigger corporate brand. Kogi was just a local business. One single tweet acknowledging the change of the taco name could have sufficed. Instead, Baja Fresh conceded power to Kogi by feeling the need to tweet incessantly about its competitor.

Kogi won this round by staying silent, while Baja lost it through its lack of restraint on Twitter.

Think you're funny? Maybe you are, and maybe you aren't -- it's not always up to you to decide. As every good comedian knows, a joke that can work brilliantly with one audience can bomb with another. With Twitter, you don't really have the luxury of choosing, or even truly knowing, your audience. So why risk alienating and offending a significant chunk of your following?
 
Take the example of agency representative James Andrews (@keyinfluencer), whose snarky tweet regarding Memphis, the global HQ of his client, FedEx, landed him in hot soup. Early this year, Andrews landed in Memphis and tweeted his reaction to the city.


 


Needless to say, FedEx was not amused, and Andrews was subject to a chastising email that quickly made the rounds of the blogosphere.
 
The 140 Twitter Conference featured a special panel of professional comedians who use Twitter to stay connected with their fans and networks, and to try out new jokes in 140 characters or less. However, when asked if they thought it would be appropriate to use humor for a corporate or business account, all panel members immediately voiced their hesitation. Since a good joke, by its very nature, always walks the line between funny and offensive, it would not be wise to take that risk.


Stand-up comedian and actress Loni Love (@lonilove) advised that if you can't be funny, focus on being positive and inspirational on Twitter. That will put a smile on your followers' faces without running the risk of a backlash.

In a way, tweeting is like dating. If you know everything about the person by the end of the first meal, then the mystery and intrigue have vanished, and you don't see the point in sticking around for coffee. Or a second date.


During the music business panel at the 140 Twitter Conference, artists such as Curt Smith (@curtsmith) and hip-hop star Chamillionaire (@chamillionaire) discussed the idea that some musicians just should not be on Twitter, as their entire brand is built around their mystique. For instance, could you imagine Jack White of the White Stripes tweeting?


While the advantages of being on Twitter outweigh the disadvantages for most consumer and corporate brands, it would be wise to give some thought as to whether you're tweeting too much. There is a fine line between transparency and over-exposure. If your brand is exclusive, high-end, mysterious, and playful, make sure that your Twitter account stays true to that tone. Make your followers feel special, and keep them intrigued.


Going back to Kogi BBQ -- imagine if it posted a monthly or yearly calendar detailing exactly where the truck would be and when. The long lines would shrink pretty fast, as the main appeal of that brand is its unpredictability.


Don't give it all away on the first tweet, as your mother might say.

That might sound obvious, but clearly not so for ABC's Terry Moran. President Obama, while being interviewed by CNBC, made an off-the-record comment about Kanye West's behavior at the MTV Video Music Awards. "He's a jackass," said the president.


Moran, who was in the room, was so clearly tickled by this rather un-presidential statement that he tweeted about it immediately.



 
Moran later deleted the tweet, but as we know, it's not possible to permanently delete a post from Twitter. The White House was unhappy about this leak, but the damage had been done -- primarily to Moran's credibility as a responsible journalist.


To learn from his mistake, respect the wishes of your clients, your colleagues, and others who may not necessarily want their remarks broadcast on a public network. Remember, you are not only staking your reputation with each tweet, but theirs as well. Stay mum about breaking news, partnerships, deals, and other confidential or sensitive developments until you are absolutely sure that the news can be relayed to the public.


Frequent use of Twitter may cause us to slip up and momentarily lose our discretion as to what is and what is not appropriate. However, always keep in mind that you can never truly delete a tweet. Never forget that pesky "Print Screen" key. If it's out there, someone would have made a screen capture of it (as our examples so far have demonstrated), and your words can, therefore, live on forever.


Are you really sure you want to tweet that?


Madhuri Shekar is a new media research intern at Sony Pictures Television and a freelance social media marketing consultant.


On Twitter? Follow Shekar at @madhuri567. Follow iMedia Connection at @iMediaTweet

Brandt is an independent web analyst, researcher and academic.  As a web analyst, he specialises in building bespoke (or customised) web analytic reporting systems.  This can range from building a customised report format to creating an...

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