I’ve talked to a number of people recently who think that optimizing and scaling campaigns has this magical and mystical aura around it. And that there’s some secret to doing so.
Well, I’ll let you in on the secret…
During my time as the SVP, Media & Customer Acquisition at Beachbody, we ran over $500MM in media and acquired more than 10 million customers. I now work with a variety of direct response and direct marketing clients — helping them to optimize and scale their operations, helping them identify not only gaps and opportunities, but key points of leverage for them to exploit…
And I’ve found that just like everything else, there is no magic.
Instead there is a process to follow, primarily driven by a list of questions, to help identify gaps and opportunities in your business. (Because oftentimes, those gaps and opportunities are where optimization and scale happens.)
Some questions have quantitative answers, others are qualitative. Some questions identify gaps in…
- information (oftentimes reports that should be run regularly)
- a marketing issue (why you don’t offer installment billing, for example)
- or a training issue (do your customer service reps know how to respond to certain customer issues)
Almost always, the first answer someone gives is not the entire story, and so pressing on additional questions can help to uncover the next layer of understanding. Those questions are harder to script because they are dependent on the specific answer and/or individual responding.
Today I’m sharing the 6 category process I use to dig in to a business, regardless of whether it’s doing $10K a month or $100MM per month. The process is the same, it’s just at a different scale and level of complexity.
But it’s not for the faint of heart.
Most likely, some of what you’ll find from this process, you can take immediate action on, like training. Other areas require testing. (Where possible, PLEASEtest before you change a control.)
But before you go out and implement anything, there’s one crucial step to take…
Prioritization.
Everyone is resource-constrained — for people, time, dollars, or traffic. We would all love to test everything we think of, but of course we can’t. And not all tests are created equal. This is where doing a bit of math can help you to understand the possible impact of different tests. You’ll likely have to make some assumptions but even with reasonable guesses, you’ll realize how little (or how much) a certain test could move the needle, when compared to others.
Here’s an example:
You may think / know that your landing page and one of your later upsells could use some improvement. Based on some assumptions and running some numbers, you might find that if you could increase the front-end conversion rate from 3% to 3.1%, that change would have the same impact as tripling your conversion rate on the upsells from 1% to 3%.
But with some business context, you might also know that the upsell is a hard sell at this point – maybe it’s really expensive or maybe the offer just isn’t compelling as it needs to be. Not to mention, a later upsell requires more traffic to get the test to statistical significance. As such, that little bit of math you do might help you move forward with the front-end test instead of some lengthy upsell one.
Too many people miss this prioritization step and as a result, don’t focus on the key points of leverage in their business.
So… ready for the 6 category process? We’re about to get into it. But first a word to the wise…
The below is fairly in-depth and so it might serve to identify where you ASPIRE to be. You may not have these things in place now or in a year. Don’t be intimidated. If you’re at the beginning of your journey, pick one or two of these gaps and close them. When your business is young, even the smallest changes can have a tremendous impact.
If you have a mature business but are looking to take it to the next level, you’ll want to address more of these gaps or hire someone to get it done.
Ready? Let’s go.
6 Revenue-Focused Categories
The primary step in my process of helping to break down a business to find areas to maximize.
The core questions fall into 6 categories that are primarily revenue-focused. They may also help to define roles and teams as the organization grows. I’m a huge believer in managing expenses, but if you’re a younger, growing company and you don’t have sales, the rest doesn’t matter:
- Traffic / Media
- Conversion
- Offers
- Non-converting leads
- Post-Transaction
- Retention
Let’s start with…
1. Traffic / Media
Start with your traffic sources.
Do you have a weekly report showing…
- traffic
- spend
- conversions
- CPA
- conversion rate
- AOV (Average Order Value)
…by traffic source (SEO, Facebook, Email, etc.)? Can you analyze trends weekly? If not, you’ll likely find that simply reporting on this type of information will provide a foundation upon which to build.
Then you can starting digging in with a number of questions:
- Do you know customer LTV by channel? Because performance relative to goal is the only way you can say that one channel is doing better than another. (I’m assuming you’re a direct-response marketer and not simply focused on impressions and reach.)
- If the LTV is different, are you actually managing to different CPA goals?
- Are those different goals on your reporting spreadsheet and are you managing to those different goals?
- What channels are performing better than others?
- What sub-channels, ad groups, etc. have shown success and which have struggled? This sounds like the same question, but the former is at the channel level. This is about looking at results where everything happens — in the details.
- And then, there’s the simple question of when was the last time you tested new copy or images?
Not all questions will come from a report. For example:
- How repeatable and scalable is an opportunity or channel you’re considering? You might get pitched what you think is a great idea, but if it’s only a 1-off and you can’t replicate it and scale it, you might want to consider passing. For example, someone with a list offers you a JV deal, but you need to do a ton of customization on your site and to your backend to run it. And that customization isn’t applicable to other JV partners. That takes work and is a potential distraction to your team who might be able to focus on other opportunities that are repeatable and scalable. This is not to say you never do 1-off’s, but rather that you look at these types of opportunities with a discerning and intentional eye.
In general, in my experience, the companies that have had the greatest success know that repeatability and scalability are two keys to their success. And those companies know…
The one big mistake to avoid.
And this applies beyond media. Once you find success with a channel (or offer), go deep and hard on it. It’s really easy to get so caught up in testing different sources that you fail to fully exploit one (or two) that is working. Or like a lot of us, you might have shiny object syndrome or get captivated by something you hear from a friend.
If you look at most of the successful marketers out there, they actually aren’t masters of every channel. They are usually really good at one or two. When you think about it, that’s not surprising. They probably tested a few things, found some success and then pushed hard there. Because they knew that they couldn’t be great at everything but also that they needed to go deep where they were having success. (Think about the way Digital Marketer has declared their love for Facebook. They know where their market hangs out and they’ve seen their efforts perform on that platform.)
Sometimes that’s the difference between those who scale and those who don’t. Two companies might both achieve early success but it’s what they do with that success that can separate them.
Key Takeaways
- Work to understand the value of customers from different channels and that you’re managing to those respective goals.
- Filter on repeatable and scalable opportunities.
- Once you find success, exploit the heck out of it.
Next up…
2. Conversion
Most people have the raw basics down:
- Click through rate
- Overall conversion rate
- Average order value
Then you can starting digging 1, 2, or even 3 levels deeper with a number of questions:
- Do you know conversion rate by traffic channel?
- If you have a 2-step conversion path (landing page -> checkout page->thank you page), do you know the click through rate from landing page to checkout page and from checkout page to thank you page? It might reveal something to you, such as break points in your funnel. Translate this to other parts of your funnel and your business.
- Can you better understand the different steps in your business? For example, do you track how many people submit an email address or a credit card on your form but don’t complete an order? This might tell you something about your form, page, offer, or something else.
- What is the take rate for each upsell in your funnel? Do you know it overall and by channel?
- When you calculate AOV, are you including continuities initiated from that first transaction when you consider Lifetime Value? Meaning, when you analyze initial orders, are you appropriately valuing them (while understanding there are cash flow implications to consider)?
I know… I just hit you with a ton of questions. Take a deep breath.
Then, just pick one of them and focus. Or, hand that list to whoever handles conversions and allow them to pick. I’m intentionally throwing a bunch out there to give you different ways of looking at your conversion path.
Then, there’s the most underused and valuable conversion tool that digital marketers fail to add to their mix:
…a phone number.
But isn’t the phone old-school technology? Yes, it is. But you also might not realize that many marketers make 25% or more on a phone order than an order online (even factoring in the cost of talk time and agent costs), not to mention conversion rates can be dramatically higher on the phone.
So if a customer has a question or wants to order on the phone, do you let them? Particularly if you have customers 45+ years old or have a higher ticket offer?
Even if the idea of managing a call center scares you, you can do a simple 3-step test:
- Get a new prepaid mobile phone number for your business
- Put that phone number on the landing page AND checkout page
- You or one of your team can answer calls – even if you only want to answer calls 5 hours a day, put a voicemail message for when you don’t answer.
You will quickly figure out if people want to call, then you can see for yourself if the added work of more numbers, agents, or even a sales call center (VERY different than your customer care agents) is worth it.
Key Takeaways
Whether you’re sending your traffic to a…
- landing page
- phone number
- webinar
- Amazon
- physical store
…try to break down and track the process each step of the way.
At the least, you’ll have a baseline to measure from.
Better yet, once you break things down at a more granular level, you’ll uncover opportunities you hadn’t seen before.
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