Do you know how leads find out about your company?
When your business is getting traffic to your website from a variety of sources it can be easy to overlook the sources of the traffic.
Yes, you can use analytics to see where the traffic is coming from, but most don’t look beyond this data to see what sources of traffic are leading to the best leads.
It’s important to know what lead channels are best for your business so you can expand on what’s paying off the most and to see if there is a reason others aren’t working as well.
Here are some steps for measuring the value of your online lead channels.
Step 1. Ask Every New Customer How They Found You
I spent a lot of time trying to figure out where new clients were coming from when they contacted me via my website.
Finally someone said to me, “Ask them.”
Talk about a knock on the head. It’s usually the simple solution that is the best solution.
Now it’s part of every new inquiry process to ask them how they found out about our company.
Since we’re taking clients most only via our website the channels are all online. We’ll get answers like:
- Blog Post
- Podcast
- Referral
- Etc.
It’s simple to ask and most willing answer without even thinking about it. And it’s usually fresh in their mind so they sometimes they go into more detail, which is always helpful.
Step 2. Keep A Running Tally Of Lead Channels
Each month after that it’s good to keep a tally of the lead channels.
In the online world things can change. Google can change something in how they rank and so can social sites like Facebook.
The first step if you’re keeping track of new customers is to add a simple add-on item of their lead channel. You can track over time where all your customers are coming from and you can see if things are changing and what channels are improving and what channels are maybe slipping a little bit.
Step 3. Determine Your Customer Lifetime Value
Before you can know the value of your online channels you need to understand the value of your customer.
I used to work for a cataloguer and the big item we looked at was Lifetime Value.
Basically we looked at how many times customers were likely to purchase or how much money they were likely to spend over that average amount of time.
It’s different for different businesses, B2C, B2B and all that.
An average customer to you might pay you $1,000/month for 60 months. You might have 50% margin on that relationship. That would put your Lifetime Value at $30,000 in profit.
Or you might sell a product that costs $20 and your customer will likely buy it two times in three years and that’s it. Let’s say it’s the same 50% margin. That’s a Lifetime Value of $20.
The next question is what you’re willing to pay to acquire new customers. It would be great to get all the profit, but most business owners would feel fine giving up 5%, 10% or more in profit to get more new customers.
Step 4. Assess Channel ROI
Now you can get into the value of each channel by assessing the ROI or return on investment.
Let’s say you’re spending $500/month on organic search efforts whether that’s blogging, website improvements or whatever.
And let’s say that brings you $1,000/month in new business. At 50% profit you’re only breaking even unless you’re able to cut back on the organic search spending or if you feel that new business from that channel will improve in the future, which can often be the case.
And a quick note on SEO and other online channels with B2Bs is that monthly tracking can be tough. Annual tracking might be better because one new client could be worth a ton of profit and you might just get one or two a year.
It gets a little trickier when you’re not investing much in a channel and it’s leading to sales. In this case you’ll want to look at the total sales coming in and you can assess the channels that way.
You could be getting $1,000/mo in sales from SEO and $100/mo from social media and another $100/mo from email. And you’re really not spending much on either.
The ROI is higher for SEO and it would be worthwhile to look at investing money in that channel because it shows the most promise.
Step 5. Assess Channel Potential
And that leads well into the channel potential. This involves some executive decision-making on your part. It’s partly looking at your own data and analyzing the industry data.
You can take industry studies and articles at face value, but they do offer some value. You can talk to other businesses and partners and get a feel for what channels are working for them.
You can go to conferences and listen to speakers and see what is being recommended in case studies and things like that.
Then you can list what the channel priority is for each of the channels that are potential lead channels for your business and its website. It could be that you’re going to expand on channels that are doing well for you or maybe you identify a channel that you should be investing in that you haven’t even considered up until this point.
Step 6. Create A Channel Priority List
And that leads to creating a channel priority list.
Now, this channel can be fluid and flexible, but if you put the time in for the steps above you have to trust that effort and move forward with strategies for the long-term.
Obviously if something is completely falling on its face after a good effort you’ll want to cash it in, but most online channels are long-term investments especially the organic channels.
Step 7. Invest
The final step is to invest and move forward. With the steps above you’ll have a good idea of the value of each channel that leading to new business through your company website.
It really comes down to profit. That’s the measure that drives all business. Without profit you have nothing. You can look at percentages and things like that. Those are great, but the actual profit dollar number is key.
From there you can determine what you can spend on channels to acquire new customers.
