347. The number of goal completions included in a web marketing report of a prospective client. For many small businesses, that would signal an effective marketing campaign. However in this case their goals were set up to track the wrong things. Instead of leads and conversions, reporting focused primarily on page views which ultimately are meaningless if you’re not getting more people to buy your products. If you’re the business owner you feel great because you’re seeing hundreds of goals achieved each month at a 48%+ conversion rate—until you look at your bottom line sales growth.
Understanding the Value of a Customer
Marketing reporting is easily one of the most confusing and resource heavy requirements for businesses regardless of size. To help simplify the process, work big to small by answering the following questions:
How do you define a lead? Conversion?
Average sale value?
Average number of sales per customer?
Average profit margin (excluding ad spend)?
Projected lifetime value of a customer?
When we work with clients, we start by identifying their target cost per customer acquisition (CAC). The basic calculation is fairly straight forward. Divide all of the costs associated with acquiring a new customer by the number of new customers resulting from that specific campaign. For example, if you spent $300 on Google AdWords over the course of a month and you acquired 20 new customers, your cost per customer acquisition would be $15. If you’re working with an agency to help you manage your campaigns, also make sure you include whatever fees you’re paying on top of your ad spend in your calculation to get a more complete picture.
Along with cost per customer acquisition, it’s also crucial to understand the lifetime value (LTV) of a customer. This calculation can get a little trickier but here you want to project the total net profit you can anticipate from your entire relationship with a customer. Knowing the lifetime value of a customer will make it possible to place a value on leads and more accurately pinpoint your target cost per customer acquisition.
Once you have this information, you can subtract your ad spend and get a better idea of your ROI while also optimizing marketing effectiveness based on your budget and marketing goals.
Creating a Monthly Marketing Report Template
Although there are a number of free and paid tools available to help you track your marketing campaigns, we typically recommend starting with a basic report in Excel.
Most of the information you will need to create your monthly marketing report can be found in Google Analytics, Google AdWords, and your social media channels. If you’re not sure if you have access to any of the above information including how to set up goals and call/conversion tracking, check with your webmaster or send us a quick note—we’d be happy to walk you through where to look.
Consider leading with total website visits by month so you can quickly compare month over month web traffic. It also can be helpful to look at last year’s information as well. From there, drill down into your sources of web traffic. In Google Analytics, you can find that information by clicking Acquisition => Overview.
In addition to conversions and your total number of sessions, you also want to make sure you look at and understand bounce rates by channel. This will give you a sense if people are dropping off before they have a chance to engage with your site—and ultimately make a purchase.
With Google AdWords and any social media advertising, you want to focus on total monthly spend, clicks (how many people are you driving to your website), clickthrough rate (are people actually clicking on your ads when they appear), cost-per-visit, and total conversions.
Where to Start
It’s easy to get overwhelmed by the sheer amount of information you have at your fingertips with Google Analytics, Google AdWords, and Facebook. Instead of focusing on goals and conversions that aren’t going to help you measure the ROI of your marketing campaigns (such as page views), start by identifying your target cost-per-customer-acquisition and lifetime value of a customer and drill down on other key marketing metrics from there.
Once you start to populate your monthly report and zero in on your core marketing metrics, you can easily add charts and graphs to help visualize your data and create a custom marketing dashboard based on your goals.
If you get stuck, you can always drop us a line.