If you were to ask digital marketers how effective their marketing budget is at delivering results, they’d probably share some great statistics about metrics, return on investment and customer engagement.
The fact is that while few will admit it, not many companies are getting maximum return on investment for their digital marketing efforts.
The reason for this is that marketing professionals are still stuck using the 92:1 ratio.
This ratio illustrates the fact that for every £92 businesses spend driving traffic to their websites, they only spend £1 converting it.
We spend all that money on raising awareness of our product offering, differentiating ourselves from competitors and carefully adapting our website design to ensure easy navigation, and then we virtually ignore customers once they land on our website. We leave them to complete the most important part of the journey alone. What could possibly go wrong!
There are clear reasons why there is such a gap between the £92 we spend driving traffic online for every £1 allocated for conversion:
1. Stuck in a traditional offline marketing model
In the past, it made sense to put the majority of the budget into an expensive advertising campaign. The more people we got to the top of the funnel, the more that made their way to the bottom of the funnel and converted.
We didn’t have the measurability and visibility we have online today and so pushing all our money into the top of the funnel was the most sensible course of action. That’s simply not the case in an era of online marketing, where measurability is at the heart of all that we do.
2. Ineffective targeting
The internet allows marketers to target campaigns much more effectively than offline campaigns. Reaching the people that are more likely to want to buy from you, whether through behavioural targeting, SEO or even email, is far easier and allows marketing budgets to work harder, bringing down cost per conversion.
3. A lack of customer experience analysis
It isn’t as simple as making marketing spend work harder, it is about realising that investing in online customer experience is another vital way to improve CPC metrics.
4. Inability to identifying online customer struggle
And the first way to make meaningful improvements to the experience visitors have when they come to your website is by understanding where they are struggling and the steps that need to be taken to eliminate these problematic areas.
We’ve seen companies that have been incredibly effective at driving targeted traffic to their website. They’ve spent the £92 driving traffic, but they’ve spent it very wisely. However, they’ve still only investing the equivalent of £1 converting their customers.
How do I know they spent the £92 wisely? Because the vast majority of their customers were progressing to the final stages of their checkout funnel. They had a clear intent to buy.
But because they were struggling on these final pages, they were abandoning in droves. The company had no idea why this was happening because they didn’t have any visibility into the online experience of their customers. They weren’t investing properly on improving conversion, so their £92 investment was effectively wasted.
How to build a business case for investment in customer experience
So what is the best way to change this mindset? If the 92:1 statistic isn’t enough to persuade a board or a marketing director to invest money in better online conversion, you’ll need to start collecting proof points and evidence.
This means really understanding what visitors are doing when they hit your website - the issues and struggles they encounter - and the action that needs to be taken to improve this.
The clearer this evidence is, the better. I’ve sat in meetings with CEOs of blue-chip organisations where they’ve been shown replays of actual page-by-page experiences their customers have had on their website.
It is amazing how quickly they open the cheque book when they can see the daily struggles their customers are having on their website and the number of visitors that are dropping off, probably to a competitor.
Research we conducted with Econsultancy recently found that, of the UK companies we surveyed, on average, they said they were losing the equivalent of 24% of their annual revenue due to poor customer experiences alone.
This equates to £14bn in lost revenues each year. Calculating the impact of poor online customer experiences in terms of lost revenue will also speak very clearly to a CEO.
So, next time you start to plan your online marketing campaigns remember 92:1. Invest a bit more in truly understanding the experience of your customers when they hit your website. And identify the steps you need take to optimise your site and enjoy the very real revenue benefits that await.
The goal of an online marketer these days isn’t just about driving traffic, it’s about driving traffic that converts. And to give your traffic the best chance of converting, you need to invest at all stages of the customer journey. Digital marketing is incredibly measurable, but it’s what you do with this measurability that really matters.
Now, why not go ask your marketing department if they can tell you what 92:1 is?