From Big Data you can now broadly predict that if you fling a given amount of money at one particular marketing strategy and channel you will get a measurable response in sales. As a rule of thumb for a medium-sized company to gain a new customer, it can cost you $149 for inbound marketing and $346 for paid search.
Marketers talk about the marketing funnel; it has a big wide opening at the top with successive stages culminating in a fairly small hole at the bottom. In the top go your all your potential customers and out the bottom comes to the customers that actually pay you. In between, there is a lot of leakage out the sides.
So it makes sense to know the opportunities for reducing a lot of that leakage and so reduce the cost per customer. I call these opportunities conversion multipliers. It’s all about how to get more bang for your buck.
Here’s an example of conversion rates from a number of internet views to a number of customers. The objective here is to gain 35,000 new subscribing customers, with 10% of these gained using paid media – in this case, Linkin Sponsored Updates. Typically you can see that over one million views are required to gain 4,375 new customers.
|Sales Ex Paid||4,375||0.4%|
|Paid Share (LSU)||10%|
|Gross Sales #||43,750||4%|
In a previous post, I spoke about content is king but distribution is queen and she wears the pants. So after you have created your perfect message, you must know where your customer tunes in. You need to broadcast on the most appropriate channels – no point in broadcasting on Channel 7 if your potential customers like to gather around Channel 3.
The Importance of SEO for Customer Conversion
Big Data tells us that Social Media and SEO generate the same share of leads to your funnel (15%), and also that SEO (Search Engine Optimization) has a conversion rate of clicks to customers of 15% while social media conversion rate is 4%. So it makes sense to put your scarce money and people resources into media that uses SEO and improving your SEO as first priority over social media.
Implications and related multipliers of this discovery include:
- The media formats you will use include your blogs, SlideShare, YouTube and your website page content.
- B2B companies that blog generate 67% more leads per month than those that don’t.
- Companies that blog have 97% more inbound links, an indication to Google that your content is useful.
- The frequency of blogging is important – 90% of those blogging multiple times a day gain a customer compared with 60% of those who blog monthly.
- You need to research keywords your customers use when looking for solutions. These keywords drive the intention of the content of your posts.
- 60% of clicks on search pages go to the first 3 organic search results and 75% of searchers never go beyond the first page.
- It takes time to build to that level for obvious search keywords, so initially seek out less obvious keywords and phrases (Long Tail) to give yourself a better chance of at least being on the first page for that search.
- Know the rules that Google uses for ranking search results. With their Panda 4.0 release, you get best results if you:
- Don’t duplicate content on your own site, and don’t copy content from other sites.
- Create your own high-quality content that will educate and entertain people.
- Make your content size at least 600 words (about half the size of this article.)
- Use videos and images were suitable.
- Give each of your pages unique tags and meta descriptions. Rewrite any current duplicates.
Here are some typical customer conversion rates:
How to Get Prospects into Your Funnel
People will exchange their email address and name in return for useful content. Nearly everyone wants to learn more about a subject that interests them.
- Offer valuable content such as white papers, slideshows videos, and checklists.
- In your copy, provide attractive Calls To Action (CTA) graphics leading to subject-specific landing pages.
Why You Must Nurture Your Leads
If you attract potential customers to your website page but only 25% are ready to buy, what are you going to do about the other 75%? This is serious leakage, and ignoring them is a waste of the funds you have already invested to get them into the funnel in the first place.
- Marketers that excel at lead nurturing generate 50% more sales-ready leads at 33% lower cost.
- Your objective during the nurturing phase is to answer the question of WHY they should buy from you. You need case studies, testimonials, webinars, and free trials.
- As leads become more qualified and ready for your sales team, you can offer assessments, special discounts, live demonstrations and free trials.
- Only 35% of B2B marketers have a nurturing program in place for this 75%.
- B2B marketers that nurture, 34% touch base monthly, 22% weekly and 9% daily.
- Nurtured leads make 47% larger purchases than non-nurtured leads.
- Relevant emails drive 18 times more revenue than broadcast emails.
- Personalized emails (names from your landing page) improve click-through rates by 14%, and conversion rates by 10%.
- Subject Line Improvement: Include given name and Secrets for best results.
- Lead nurturing emails get 4-10 times the response rate compared to standalone email blasts.
- Event-triggered marketing can potentially save 80% of your direct mail budget.
- Button wording in your emails and pages is significant – Click Here have higher response rates than Go or Submit.
The importance of Internal Systems
When is the right time to advise your sales team of a worthwhile lead? Many companies start the selling process too early and drive up their costs for average customer acquisition: $291 per customer where there is a marketing/sales agreement compared with $486 where no clear guidelines exist.
Marketing automation software can not only save you a lot of time and provide consistent release of emails, but your ROI is significantly better as well.
How to Optimize the Sale
You have three objectives here:
- Gaining referrals. The cost to acquire the new customer through referral is significantly less than the cost to acquire a new customer in other ways.
- Reducing churn. These are subscriptions you lose. An acceptable churn rate might be 7-10% pa. It costs you around 6 times as much to gain a new customer instead, so be prepared to invest to hold and gain that lifetime value. Your objective is to increase the lifetime value of your customer.
- Upselling or Cross-Selling. Remember that on average 35% of new customers are open to an additional service if offered.
What to Do
These are just a few examples of ways you can multiply your income from better marketing. Find a specialist near you that provides services for small business in marketing multipliers. If you want to know more, drop me a line.
Acknowledgements for this research to Hubspot, Gartner Research, Forrester Research, The Annuitas Group, MarketingSherpa, Content Marketing Institute.