When it comes to planning a new sales campaign, excitement at its potential often means focus shifts much more towards the actual content of the campaign. This is natural, and certainly at the beginning, wholly advisable. However, once the blueprint for a campaign has been established, metrics for success need to be identified, and if you want to get the best from it, you need to be looking at more than simply how many digits hit your bank account.
Here, we suggest five metrics to monitor to help ensure your campaign justifies the excitement…
Revenue v Profitability
Alarmingly easy to forget when a sales campaign starts producing return, is that there is marked difference between revenue and profitability. More so that it’s the latter that is important. As money (hopefully) starts to roll in, accompanying exhilaration often clouds the true picture. Sure, the business account is swelling, but before champagne corks start popping, ask yourself questions such as:
‘How much did we spend boosting Facebook posts?’
‘What was the total cost of changing the website to reflect the campaign?’
‘How many labour hours went into planning and executing the campaign?’
‘Are there any hidden fees and expenses we’ve not considered?”
Add these figures together and then subtract them from how much money the campaign generated. Now you’re somewhere close to what your profit is, and now you know what needs to change, or stay the same next time.
Quite simply, how many extra contacts a campaign accrues, even if those contacts don’t buy anything. If your contact list grows significantly as a result of a campaign then you’ve done something right, but you now need to turn detective to find out how you can convert these contacts into paying customers.
Do what research you can into these interested but non-committal followers. Find out what they do, build a picture of the kind of needs they’re likely to have, and make sure your subsequent campaigns speak to them more intimately.
Traffic to your website, email, phone lines and towards your promotional content is goo, but quality really does outweigh quantity. In modern sales parlance, quality is measured by ‘engagement’.
Use analytics tools such as Google Analytics to discover how users engage with your content once they land on it. Having gleaned this information, you can then start strategizing as to which traffic paths to invest more time and money into, and which move away from.
Investing equal time and resources into multiple traffic paths, some which generate healthy return and others which produce nothing, is plainly just bad business practice.
Or, more specifically, conversion rates. Although measuring conversion rates requires a smidgen of maths, it’s a worthwhile pursuit.
All you need to do is work out traffic numbers by method (i.e. how much traffic came via Twitter Ads, how many by e-shots etc), work out how much of that traffic resulted in actual sales, then divide the conversion number by the traffic number. Simples.
Once you’ve learnt, for example, that your Twitter Ads convert at 4% but your e-shots convert at 13%, you can tailor your next campaign accordingly.
Customer Acquisition Cost
CAC is the cost associated of successfully getting a consumer to buy your product or service. This includes, but is not limited to; research, marketing, and advertising costs. An important business metric, CAC should be considered along with other data such as the resulting ROI of an acquisition.
Roughly put, CAC is calculated by dividing all the costs spent on acquiring more customers by the number of customers actually acquired during this period. So, if a company spends £100 on marketing in a year and acquires 100 new customers in that year, their CAC would be £1.
But be aware, it’s not the size of the CAC that is most important. It’s the size relativeto the revenue generated per sale. A CAC of £5 that represents 10% of revenue generated per sale is perfectly good. It’s also fine to have a higher CAC of say £50, if that too represents 10% of revenue generated per sale. It’s when your CAC is around the 100% mark of the revenue generated per sale that you’ve got an issue you can’t afford to ignore for long.