ROI Conversion Tracking for Service Based Businesses

April 18, 2018by arc_admin

Conversion tracking from digital marketing efforts in a service-based business is often shied away from. We’ve found many reasons for this, but most often it happens because it is not easy to visualise what the tracking will look like, or it is seen as too complex.

At Arcadian, we set up digital marketing conversion tracking regularly with service-based businesses. The main hesitation we encounter is “with all the data available, it’s hard to know what to track” and in turn, nothing gets tracked. While there is a lot of data available you can get an effective sales-funnel setup using combined data from Google AdWords, AdRoll, Facebook Paid Advertising, Social Posting, EDMs and Google Analytics organic traffic very easily. Basic statistics are sufficient:

  • Ad Impressions
  • Clicks
  • Google Search Result Impressions
  • Google Search Result Clicks
  • EDM Sends
  • EDM Opens
  • EDM Clicks

Now we know what you’re thinking; This is too simple and we’re missing too much other vital data, making this pointless. While we have cut out other data, this funnel shouldn’t be ignored. It’s still vital to understanding the performance of your everyday digital marketing activities such as:

  • What content to create?
  • Which ads win the A/B tests?
  • What campaigns perform better?
  • What EDM content performs better on certain days?

When looking at your top-level conversion rate you shouldn’t be focusing on “a two-column layout on my EDMs converts better than a single-column”. Unless every other aspect of your business is running perfectly, you need to get out of the weeds and focus on decisions that make an actual financial impact on your company.

So, where do I begin?

You need a minimum of three things to work out the beginning of your sales funnel:

  1. A website.
  2. Google Analytics setup on your website.
  3. Goals setup through Google Analytics.

You do not need to be running AdWords, sending EDMs, posting on Social, doing backlink building or anything else for now. You can analyse past data on your website activities with just these three steps.

We’re going to assume that steps one and two are simple enough and that you have them set up already. Goals Tracking is not set up automatically however but is still straightforward to add.

The main goal conversion you’ll be looking to create for most lead generation websites are:

  • Form Submissions
  • Phone Clicks
  • Email Clicks

Going with many more than those can get too convoluted and cause you to lose focus, and are those Facebook likes from your site really making a difference financially? Any less than these three however and you won’t be tracking enough relevant conversion information.

Ok. Now what?

Well next up, we need to understand what areas we are looking to track. We will demonstrate this by using a sales funnel with metrics associated with each stage of the funnel.

Conversion Tracking Sales Funnel

Awareness: Google Ad Impressions, Paid Facebook Ad Impressions, Google Search Result Impressions, EDM Opens and Social Post Views

Interest: Google Ad Clicks, Paid Facebook Ad Clicks, Google Search Result Clicks, EDM Clicks and Social Post Clicks

Decision: Phone Number Clicks, Email Clicks and Contact Form Submissions

Conversions

Conversions generally happen offline and are a purchase of one of your services.

Great; How do I use this?

The end goal here is to be able to say that “for every 100k Google Ad Impressions I make 10 sales and in turn, $200k in revenue.” Fantastic! We now have trackable ROI for our campaigns.

From here on it’s important to stick with a consistent way of representing the data you’re tracking to end up with a single figure. This process needs to be repeatable, so you can do it on a regular basis and therefore track performance over time.

You will need a way to track progressions throughout the funnel, split per channel:

  • For every dollar I spend on Google Ads, I get 100k impressions.
  • For every 100k impressions I get on Google Ads, I get 1,000 clicks.
  • For every 1,000 clicks I get from Google Ads, I get 100 goal conversions.
  • For every 100 people who contact me (goal conversions), I make 10 sales.
  • For every 10 sales, I make $20,000.

This makes it easy to know how increasing the ad spend translates to impressions, site visits, leads, sales and finally revenue.

There are plenty of ways to track conversions, and we’ve given you some examples in our service-based business sales funnel tracker.

To use this template, simply fill in the highlighted sections with your website details.

Marrying Online and Offline Tracked Data

This is where tracking can begin to get a little fuzzy. Even today, there is no simple way for 1-to-1 tracking or mapping from an online channel to an actual sale, short of specifically asking every customer religiously and expecting honest answers. As the chances of everyone at your organisation sticking to this 100% of the time is statistically unattainable, we like to take another approach.

We simply apply the average conversion rate from all known sources. We make this assumption because it’s only one channel which is “Direct Company Communications”, either by email, phone, or in person. Therefore, once people call, email or contact us we know that we convert 10% of these customers.

With this in mind we attribute the actual conversions back to the online channels using some basic math.

Looking at an example where we make $2,000 per sale and make 100 sales a month. If we had 300 leads from phone clicks, 200 leads from contact form submissions and 100 from email clicks, applying a 10% conversion rate this would give us 60 sales (300+200+100 / 10 = 60). So our combined online revenue is 60 sales x $2,000 per sale = $120,000!

We can now cross-check that this was indeed the amount we’ve made and apply it back to our channels.

  • Phone: 300 leads = $60,000
  • Contact Form Submissions: 200 leads = $40,000
  • Email Clicks: 100 leads = $20,000

We then break this out per channel. So, for the 300 phone leads we follow where they came from:

  • 150 from Google Ads = $30,000
  • 80 from Organic = $16,000
  • 70 from EDMs = $14,000

Now, if we spent the same amount of money, say $1,000 on each channel this would mean that:

  • For every $1,000 we spend in Google AdWords, we make $30,000 on average, meaning that for every dollar we spend, we make $30.
  • For every $1,000 we spend on Search Engine Optimisation, we would make $16,000 meaning for every dollar we spend, we make $16.
  • For every $1,000 we spend on Email Marketing, we would make $14,000 meaning for every dollar we spend, we make $14.

In this example, Google AdWords has shown itself as the optimal choice, and where we would want to optimally spend as much of our budget, until the ROI fell off to the level of the next best channel, in this case, SEO.

What to look out for?

After you’ve been tracking your results for a month, you’ll need to look at optimising your digital marketing efforts. The easiest place to start looking at optimising is the beginning of your sales funnel and here is why.

We know they for every dollar we spend in Organic efforts we make $16 back. So, if we work this back with hypothetical numbers as follows for the 80 phone leads:

  • Conversions: 8 (10% of the 80 leads)
  • Leads: 80
  • Organic Sessions: 1,600
  • Organic Clicks: 1,400
  • Organic Impressions: 16,000

This means each impression makes us $0.0005 which seems small but it’s just an impression. If we expand our content and increase this to 32,000 Google Search result impression the flow on effect means:

  • Organic Impressions: 32,000
  • Organic Clicks: 2,800
  • Organic Sessions: 3,200
  • Leads: 160
  • Conversions: 16 (10% of the 160 leads)
  • Revenue: $32,000

Thus, an extra 16,000 impressions (not clicks) in Google Search results in equates to an additional $16,000 in revenue per month! Not too bad for a bit of SEO.

Optimising other channels works in the same manner, such as optimising ads for more impressions, optimising ads for click through, optimising EDMs for click through, optimising EDMs subject lines for opens rates and so on.

If you’re still unsure how to set up your sales funnels yourself, or maths was just never your thing in school, give us a call and we’ll be more than happy to give you a hand.

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