Last week, we talked about identifying the value of a LEAD. That is a baseline number to know to be able to take the next step in understanding the return on investment for your organization as it relates to sales and marketing efforts. When we are talking about the Lifetime Value (LTV) of a customer, we want to look beyond that first purchase and calculate the projected revenue. This is just one more way to evaluate your marketing and advertising strategy and manage your budgets.

Step 1: Find the average customer purchase per visit over a specific period of time.  

This is as simple as looking at last years’ revenue generated per purchase. For that calculation, look at the total number of transactions over the last year and divide the total revenue from those transactions by the number.

• Example: If customer 1 spends $3.50, customer 2 spends $5.00, and customer 3 spends $6.50, the average is $5.00.

Step 2: Find the purchase frequency rate – how often each customer repeats a purchase.

For some of you, that may be once per year. For others, it could be weekly.  Example: If customer one visits once, customer two visits twice, and customer three visits three times, the average is two visits per week.

Step 3: Determine the annual customer value.

This is where simple math begins to tell us a story. Take the average customer average purchase value times the average number of transactions within that same time frame.

• Example: $5.00 x 2 = $10.
  • In this example, a customer spends $5 two times a week, so their customer value is $10

 Step 4:  Identify the average lifespan of a client.

Dig into your CRM or billing software and export your list of active clients. From there, add in a column that shows the length of time that client has been with you. Again, find the average.

You can, for this calculation to be more accurate, remove the top and bottom outliers.

Step 5: Finally, Calculate Lifetime Value.

There are several ways to calculate LTV, but this is most simple and typically provides a middle-of-the-road estimate.

• Example: (Customer Value) x (Average Customer Lifespan)
  • For this example, let’s assume the average customer lifespan is ten years. This number can be found by closely tracking previous and current business.
  • (52 X 10) X 10 = $5,200
  • The average Lifetime Value is $5,200

Once you have taken the time to find this value, now we have real data that can drive insights and marketing.

• Are you happy with the Lifetime Value number that you calculated? If your answer is no, then work with your marketing team to identify and seek out new customers that better reflect your goals for LVT. Build a marketing plan that attracts your aspirational client values and change that outcome.
• This number can also help influence your marketing budget by helping to set the cost per lead or cost per acquisition goals for your team to be accountable to.
  • We worked with one client whose business model had a $500,000 average LVT. Because of the overall value of that client and potential return to the company, they were willing to spend upwards of $300 per lead from completion.
  • Likewise, we were working with a client that had an average of $160 LVT, so for their marketing goal, we knew that they could not exceed a $15 CPA.
  • In both cases, this information allowed the business owner to set goals and limitations on their marketing plans and hold the agency accountable to a measurable goal.

In conclusion, finding the lifetime value of a client is a valuable component of your marketing strategy that will help you plan your marketing budget.  If you need any further assistance with your marketing budget, strategy, or growing your business, our digital experts are ready and eager to help. Contact us today!

Sources:

• https://neilpatel.com/blog/how-to-calculate-lifetime-value/
• https://blog.hubspot.com/service/how-to-calculate-customer-lifetime-value
• https://www.zaius.com/customer-lifetime-value-cltv/

When planning your marketing budget and strategy, do you start with the end goal in mind? Today, we want to talk specifically about calculating the value of a lead and how that knowledge will direct the rest of your energy and focus. Understanding the value of a lead for your organization provides the foundation on which your successful marketing campaigns build. This will simplify and even eliminate the ongoing discussions around the optimum budget and where to invest your team’s time and resources.

Follow these simple steps to calculate the value of a lead.

Step 1: Find Cost Per Lead

Let’s start by finding the average cost per lead for your organization.

Cost per lead can be an indicator of the success of your marketing efforts. This number projects lead value and other growth forecasts.

Cost-per-lead formula: Total cost to acquire leads ÷ Total leads acquired = Actual cost per lead

For example, if you spent $1,000 on marketing and received ten leads, your equation would be 1000 ÷ 10 = 100.

Cost to acquire leads = how much money you spend on marketing in your assessing time period. This can include any tools used and staff time.

Step 2: Find Lead Value

With that number, we can extrapolate the value.

Learning the lead value will give you a snapshot of how much money you are spending to generate gross revenue for your business.

Lead value formula: Total sales value (revenue) ÷ Total leads = Total lead value

Example: In the time period you are analyzing, you received $15,000 in revenue. Your lead volume was 10. So, your equation is: 15000 ÷ 10 = 1500

Tip: Not all leads are created equal.

One variable that often drives lead value is the source of the lead. That said, calculating lead value by source can show which sources produce the best leads. Once you know which sources create the best/ worst leads, you can make budgeting decisions.

If your lead value is lower than your cost per lead, then you have a problem. This means you are spending more to attract business than they are spending with you.  Therefore, it costs you money to work for that client. If this is your finding – first double-check your math – but then re-evaluate your marketing plan and the customers you are attracting with it.

There is no right or wrong number here – we worked with one client that was thrilled with a $250 cost per lead structure as they offer a high-investment product with a value close to 6-figures. Likewise, we have worked with retailers that maintained a $6 cost per lead requirement.

Step 3: Find Lead-to-Sale Conversion Rate

Next, you’ll use the information you gained to find your conversion rate. Your conversion rate will show you how likely it is that a lead will turn into a sale.

Lead-to-sale conversion rate formula: Converted Leads ÷ Total Lead Volume = Lead-to-sale conversion rate

Example: If 3 of the 10 leads agreed to do business with your company, the equation is 3 ÷ 10 = .30 (30%)

The higher this percentage is, the better.

Tip: Again, not all leads are created equal.  Find the lead-to-sale rate with all the sources you use to generate leads.

Once you know which sources are most/ least likely to generate leads that convert, you can make budgeting decisions for the future. Some sources are needed to fill the top of your sales funnel and will, by default, have a much higher cost to conversion.

How can you use these metrics to make business decisions?

With this valuable information, we can use the data points to make smarter business decisions.

1. Set your marketing budget based on the number of leads you need to generate to achieve your sales goals.
   1. If your goal is revenue-based, use the Lead Value Formula (step 2 above) to calculate how much you need to invest to achieve your goal.
   2. If you need to make $100,000 in New Business sales, and your lead value is $1,750, you need to invest $57,200 into lead-generating marketing efforts.
2. Evaluate and rank lead sources
   1. Increase, reduce budgets or even eliminate tactics that are not generating leads that convert or that are not assisting in a conversion.
3. Use the value of a lead metric as an internal benchmark for your marketing team. Compare month-over-month, quarter-over-quarter, or year-over-year the quality of the leads you are generating.
   1. The higher the average revenue generated per lead, the more efficient your strategy becomes

If you could use further help obtaining qualified leads, we are eager to help your business grow! Contact a KeyMedia Solutions digital expert today!

 

Does this sound familiar to you? Your brand new, state-of-the-art website is finally Live! Eagerly, you await a return on your investment, giving it more and more time to deliver the results you initially anticipated.  After a few months, you are confounded by the lack of qualified leads, stagnant site traffic, and your ranking on Google Search is buried deeper than the distant relatives you recently discovered while searching Ancestory.com.

Unfortunately, this scenario is one we hear about all too often. As disappointing as it is for us, we understand that it is exponentially more frustrating and disheartening for you – the business owner, especially, after investing large sums of money into the empty promises of easy sales.

An optimized website is an important foundation- but just because you built it doesn’t mean they will come!  Your website (if easily found) is only one piece of the digital puzzle.  To reach your ideal customers and obtain qualified leads depends upon the complete picture presented online.

What is a Digital Brand Presence?

Your Digital Brand Presence is the perception of your company based on all available information across the internet.  This online portfolio consists of your corporate website, social media platforms and posted content, media exposure, and digital advertising. These components connect to create a lasting impression of your business on potential customers and ultimately tell your story.

• Corporate Website – Your digital location that houses all information about who you are, what you do, why you do it, where you do it, and when you do it.
• Social Media Platforms – These should display any corporate events, celebrations, milestones, announcements, answer questions, display product or service videos, and notify customers of pertinent information regarding your company.
• National or Local media coverage of your business should be shared throughout all of your online social media platforms and website.
• Digital advertising- Google Ads, boosted social posts, etc. should be placed in front of your target audience when and where they hang out online.

Why is a Comprehensive Digital Brand Presence Important?

Simply put, your customers are located on the internet and that is where they spend the majority of their time. Having a comprehensive digital presence where you have the strongest visibility is vital.

• As of 2019 and 2020, the average daily social media usage of internet users worldwide amounted to 145 minutes per day, up from 142 minutes in the previous year.[1]
• In 2019, Americans spent over 12 hours a day on major media including television, newspapers, magazines, radio, and digital formats.[2]

Therefore, if a brand is lacking an online presence they are missing out on beneficial interactions with their audience. These interactions could help increase brand awareness, brand relevance, and overall company growth.

How does a Digital Brand Presence Impact your Business?

Nine out of 10 B2B buyers say online content has a moderate to major effect on purchasing decisions.[3] Establishing trust and credibility for a brand is one benefit to having an online presence. More times than not, a consumer or B2B buyer is going to do their research on a business (and their competitors) before they ever decide to make a purchase.  In order for consumers to do their research and prove your validity they must be able to find you online as 67% of the buyer’s journey is now done digitally.[4]

One of the biggest impacts digital brand presence has on a business is the ability to engage with consumers on a human level. This engagement could come in the form of replying to comments, answering questions, or responding to problems or criticism in real time. Additionally, being able to reach customers on a massive scale has a non-disputable impact of curating a consistent web presence. Not only will you be able to be seen by more users, but you will increase your brand’s relevancy.

How Do you Own your Brand Presence?

Be proactive, take control of your online image and potential customers perceptions.  Start by creating a webpage that best reflects your brand and is optimized to the way your customers are trying to find you. But don’t just focus on your website – think beyond that. Look at your social media pages, what information is there, how often it is updated, and what story you are telling through it? Does the information posted reflect your true brand identity? Your content should be original and consistent in tone, style, and messaging. Review your Google My Business listing to make sure it is complete and accurate.  In addition, you may need to look into adding an online directory listing service to improve your 1^st page rankings.

It is also crucial that your site is optimized for mobile devices. In 2021, 53.9% of all retail e-commerce is expected to be generated via (mobile) m-commerce.[5] Here are some tips to ensure your website is mobile-optimized. [6]

• Your website should be programmed to intuitively adapt to whatever device is accessing it in order to provide the most user-friendly experience
• Tap-Friendly: make sure all buttons, links and calls to action have the appropriate size and margin to prevent errors.
• Text Phone Numbers: Make sure all phone numbers are text and not images so users can tap-to-call, or copy and paste the number to share with a friend.
• Visual Content: Since mobile websites are usually viewed on the go and on much smaller screens, utilizing visual content such as infographics and videos will be preferred over reading lengthy text.
• Main Navigation: increase padding around menu items so it’s easy for the user to read and tap on menu items.
• Contact Forms: Increase form input fields so it’s easy for the user to fill out the form.[7]

A comprehensive digital brand presence connects you with your target audience where they reside online.  By consistently engaging your current and potential customers with accessible information and value-added content (how-to-videos, demonstrations, FAQs, etc.) consumers are seeking about your brand adds to your brand relevancy, increases your brand awareness, and helps to continuously grow your business.  By following the tips and strategies presented here you are sure to set your brand far above the competition.  If you would like further information or assistance on developing a digital brand presence, our digital experts are ready to help! Contact us today.    

Sources:

[1] H. Tankovska, Daily social media usage worldwide 2012-2020 (Feb 8,2021) (available at https://www.statista.com/statistics/433871/daily-social-media-usage-worldwide/#:~:text=As%20of%202019%2C%20the%20average,minutes%20in%20the%20previous%20year.?ref=DigitalMarketing.org).

[2]  A. Watson, Time spent with media in the U.S. 2011-2022 (Jun 17,2020) (available at https://www.statista.com/statistics/278544/time-spent-with-media-in-the-us/).

[3] https://www.themarketingblender.com/statistics-boost-sales/(cmocouncil)

[4] https://www.themarketingblender.com/statistics-boost-sales/(siriusdecisions)

[5] https://www.statista.com/statistics/249863/us-mobile-retail-commerce-sales-as-percentage-of-e-commerce-sales/

[6] https://www.outerboxdesign.com/web-design-articles/mobile-ecommerce-statistics

[7] https://www.outerboxdesign.com/web-design-articles/mobile-ecommerce-statisticsar

No matter the industry, every business has their own version of a sales funnel or they have a process in place to generate more business. A sales funnel is an organized structure that refers to the buying process of new customers. It involves multiple touch points with various mediums such as sales reps, word of mouth, online retargeting, and social media. However, every business creates their own version of a successful sales funnel depending on their target audience and ideal outcome.

Because of all the different funnels out there, the struggle for many businesses is to optimize their existing process to meet the changing demands of today’s consumers. In my blog today, I’ll discuss the different factors that contribute to shaping a successful sales funnel for your business. I’ll also explain some of the different techniques and online tactics that can increase the chances for potential customers to reach the end of their buying journey and convert sales.

Extending Your Reach

Every sale begins with a large number of prospects and generally ends with a much smaller number of people who will actually buy your product. This happens because the opening of the funnel is designed to attract the most amount of potential customers. This phase is made up of the actions put in place to provide relevant information about your business when people want to learn more about your products or services.

Today’s consumers have the ability to kick the tires of your business far before any contact is made just by searching your company name on the Internet. Depending on how much information customers can find about you, they’re able to compare that information with other competitors. In the past, marketing teams would be responsible for filling the top of the funnel and the sales team worked to move customers down the funnel and convert sales.

Engagement/ Retargeting

The online resources of today have created more of a joint effort between marketing and sales. Customers are now able to move themselves down the funnel through their own interactions on social media, search engines, and website content. This has created more of a two way conversation between your business and the consumer while also adding more touch points to increase their engagement to your influential content.

The multiple touch points happen by creating a well-executed marketing plan that includes Retargeting. This online tactic is incorporated into a sales funnel to remind people of your business even after they’ve moved on to something else. Think of Retargeting as a way to keep your business visible and top of mind to your customers.

Re-activate Existing Customers

One of the most important features of a sales funnel that is often overlooked is the targeting of existing customers. Once someone makes a purchase it’s important to have a plan in place to positively engage with them in order to make sure they continue to buy from your business.  

A fantastic way to do this is with a monthly newsletter or a blog much like this one. Not everything you write or produce content wise will resonate with your audience. The most important thing to realize is that the customers who have already converted sales for your business are going to be the most likely prospects to make another sale. Your marketing doesn’t have to be as forceful with these existing customers, but you also need to make sure you’re still keeping your business in front of them while they are deciding they next purchase. You never know what will peak that interest which is why it is important to always be testing new content staying on top of mind as the industry expert.

Optimize your Sales Funnel

With everything that I covered in my blog today, I hope you’re thinking about what your sales funnel looks like. What content are you using to reach new customers? How are you keeping your business top of mind to potential customers; do they consider you an industry expert? Finally, what reasons are you giving them to contact you and make a sale?

Taking the time to answer these questions and develop a solid marketing plan designed to move customers through a sales funnel is an important step in the growth of your business. It may be a difficult process to put everything in place, but the benefits of an efficient sales funnel can prove to be the difference between growth and decline for your company’s future.

Don’t think that you’re in this process alone. Building a successful sales funnel customer made for your industry takes time and patients. That’s why we’re here. KeyMedia Solutions uses the latest Online Advertising technology to find new ways to make your business stand out above the crowd. If you’d like to start building your own online sales funnel, click here to talk to us today. Otherwise, feel free to read more of our articles and find out for yourself how Online Advertising can benefit your business.

You can also click below to download our free whitepaper and learn more about Remarketing.

 

 

 

“A quality team is essential. Organizations grow at the speed of trust!”

– Dave Ramsey, at ICON 2016

The above quote is just one of Dave Ramsey’s “5 Essential Qualities of a Leader,” and as he continued to rattle off even more quotable nuggets during his keynote presentation, I sat in the audience with my pen and paper taking notes during the first day of the 2016 ICON event for small businesses.

The four-day event took place in Phoenix, Arizona where small business from across the globe gathered to hear from influential speakers, attend detailed breakout session on how to improve their business, and speak one-on-one with industry experts about developing successful business agendas. This year ICON celebrated its 10^th anniversary and welcomed more than 3,000 people coming from 25 different countries around the world.

 

One of the fundamental principles of KeyMedia Solutions is our devotion to education and training in order to stay current in the constantly evolving industry that is Digital Marketing. We believe that our commitment to bettering ourselves not only strengthens us as a company, but also allows us to deliver a higher quality of service to our partners and customers. As a result, I was fortunate enough to be in attendance during this year’s ICON event and had the opportunity to learn from Dave Ramsey, David T. Fagan, Gary Vaynerchuk, and many more about ways to achieve business success.

Whether you were there at the conference with me or not, I want to share the experience with everyone. That’s why over the next three weeks, I’ll be posting about my top three takeaways that I believe anyone can use to increase their business and achieve success. Make sure to stick around to the end of this post to find out what I’ll be talking about next week.

I’ll begin today by addressing a question every business owner, no matter the size, asks themselves almost every day – “How can I generate more leads for my business?” In my first blog, I’ll talk about what I learned about lead generation and give you three helpful tips that you can start using today.

How to generate more leads for your business

One of the many breakouts that I attended during the conference was focused on generating more leads for businesses looking to increase their amount of customers in their database. Hosted by the Founder and President of Box Out Marketing Tyler Garns, he outlined his plan that was responsible for increase his company’s monthly leads from 300 to 25,000. Here are some of the class highlights.

Identifying Quality Lead Sources

Whether you invest or create them in-house, lead sources are what drive traffic to your site or landing page. Here are some examples of lead sources that you can use to generate leads.

Emails Paid Ads Social Media Organic Traffic Text Ads

Purchase Leads Speaking Engagements Ride along mailers Display Advertising Retargeting

Identify What Your Customers are Searching For

Generating leads in pointless when they are not qualified. Identifying your ideal customer and what they’re searching for when they go online will help you narrow your advertisements and lead magnets to speak to them and answer their questions. Here are some tools to help you do this.

• Google Trends
• Google Correlate

Creating Effective Lead Magnets

Let me make this clear, lead sources are what grab your customer’s attention. They are how your customer’s will see and learn about your business. Lead magnets are what will influence them to take action and convert your target audience to leads. Here are just a few examples of possible lead magnets you can use to generate leads.

Downloadable PDFs or Whitepapers Coupons or Exclusive Deals A Quiz or Assessment Ebooks or Reports

Membership to an exclusive group/event Webinars or Training Case Studies Consultations

Keep in mind that these are just a few examples of materials that you can use to force action by potential customers. The important thing to remember here is that lead magnets must be appealing or provide a beneficial service for the target lead. Lead magnets are not your “money makers,” they are what will start someone down your sales funnel that ends with you converting a big deal. Let’s take a look at some helpful tips that you can use while creating effective lead magnets.

Tip 1: If you’re delivering a lead magnet through an email, there are a few things that you can do to increase the effectiveness of your emails.

• The headline of your emails should include a call-to-action. Show them what they are getting and tell them what you want them to do. Make this the first thing they read in your email.
• While including images in a highly effective way to increase engagement with emails, including links also increase the engagement of customers.

Tip 2: If your lead magnet is a report, whitepaper, or anything downloadable, there are a couple of things you can include that will make them more appealing to leads.

• Using short lists of tips or features greatly increase the effectiveness of your lead magnets. Examples of this would be, “3 Tips to Lose More Weight” or “5 Tricks to Eating Healthier.”
• Include bullet points. These make your document easier to read. Making lists are a great way to deliver the relevant information that your potential lead wants to learn.

Tip 3: Once you’ve distributed your lead magnets and are waiting to the leads to flow in, don’t sit on your hands and do nothing. Take this time to track, optimize, and test.

• Test, test, and test some more. If you’re sending out emails, test subject lines. If you’re creating Facebook or Google Ads, test copy. My point is that comparing similar elements of your lead magnets will allow you to actively make changes in the future that are backed by your own research and data. These decisions will optimize your lead magnets and generate more leads for your business.
• Tracking the activity of your lead magnets will allow you to see which one are performing better than others. Making this observation will allow you optimize other lead magnets over time and reproduce positive results.

These tips are meant to optimize a small part of your sales funnel. No matter what your current lead magnets are, you can use these tips to improve their connectivity to potential customers.

Start Generating Leads

Let’s recap everything that I covered in today’s discussion. First, I outlined lead sources that you can use to reach out to potential leads. Second, I gave you a couple of tools that you can use to better define what your potential leads are searching for. Finally, I explained the difference between a lead source and lead magnet while also giving you three tips to maximize the effectiveness of future lead magnets.

If you have any thoughts or questions about what I covered today, please feel free to Click Here and schedule a time to talk to someone on the KeyMedia Solutions team. We’d be happy to answer all your questions.

For Next Week

My trip to ICON was incredibly helpful and jam-packed with useful information that can help your business no matter your size. In my blog next week, I’ll discuss what I learned during the keynote presentation of Ryan Deiss. We’ll go over ways to make your marketing effort a success and how branding your business can be the difference between growth and bankruptcy.

The landing page on your business’ website is just as important as any advertisement you’re planning to run. Businesses and marketers spend so much time creating advertisements to get people through to their website that if the landing page isn’t up to par then all that hard work was a just waste of time.

An effective landing page should tell your business’ story. It should have all the vital information that visitors need to learn about your services or products. It should also direct or influence visitors to specific actions. For example, a bike shop should have a website that clearly paints the picture to the visitor that high quality bikes are sold on the website. If a person clicks on your ad for bikes and is taken to a site that sells roller skates, they’ll leave because the site doesn’t have what they were looking for. Not exactly the end result anyone wants.

Not only will people immediately leave your site if it’s not what they we’re looking for, which would also increase your bounce rate, but you could unknowingly be subjected to other consequences as well.

The Consequences of a Poor Landing Page

First, advertising platforms compare the relevance of the ad to the search being performed. This same process happens with display ads; matching the ad to the context on the page or user experience from the past. When your ad is served and a click through occurs on your ad, if the reaction of the user is a bounce then your relevance score will decrease.

Second, your relevance score is taken into consideration when evaluating your ad, and when your score is low this results in poor positioning and less servings of your ad. The mismatch of message to landing page will also cause a lack of trust and negative perception of the brand. Lastly, you’re performing fraud advertisement when misleading viewers.

The Ideal Landing Page

When the ad is relevant to the search being performed, or the content on the page, the more likely the user will click through. Then, when the ad mirrors the landing page there is a higher chance the searcher will become a converter. This IS the result you want.

Why waste your advertising budgets and time on advertising a message that isn’t going to end in a conversion? Make it easy on yourself and set up your advertisements correctly the first time with these tips below to match the message to the landing page:

Tips to Match Ads to your Landing Page

• Use your brand logo or brand colors in the ad.
• Use strong terms that are utilized often throughout your website.
• Have a headline that is the same or similar to the title on the landing page.
• Write copy that is captivating but still explains the service, product, or deal a person will see when they click through to your site. Or, the copy should be a summary of what the page will say.
• Use images that are the same or similar to images on the landing page.

Throughout building your advertisements just remember, a click on an advertisement is only part of the process, the end result we all want is the conversion, no matter if it’s a sign up, download, purchase, etc. Creating a successful landing page can make the difference between high website traffic and searching for customers.

Don’t forget to register for our monthly newsletter!
Click Here to Subscribe