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How to navigate the murky waters of marketing ROI

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“What are the best marketing channels to invest in for my business?”

As a marketer, this is a question you’ve probably mulled over, over and over again.

And it all comes down to Return on Investment (ROI). You should spend your marketing dollars on the strategy or strategies that you can prove will get you the biggest bang for your buck.

Yes, yesterday’s CMO was about communications, branding, and advertising. Today, the CMO is a strategic partner to the CEO, someone expected to understand the business landscape well enough to articulate and predict which markets, products, services, or execution strategies will deliver the most profitable growth.

The days of gut-feeling marketing are long past; today, being able to track and prove the validity of your efforts is vital.

But determining the ROI of a particular marketing strategy can be difficult.

Your customer experiences your brand and your website in numerous ways―they are coming in from so many varied touchpoints, from email, to Snapchat, to Bing Ads, to whatever the shiny, new marketing tactic is this week.

It’s unlikely that one interaction is responsible for capturing them, making it difficult to untangle and measure one marketing channel against another. While there are many different strategies and workarounds for attributing marketing ROI, it’s easy to get overwhelmed.

In a sea of murky ROI estimations, how can you best determine where to invest your marketing dollars?

First things first: How do I measure ROI?

The simplest way to calculate ROI from a marketing strategy is to take the sales growth from your product or business, subtract the marketing cost, and divide by the marketing cost:

Simple Marketing ROI:
ROI equation

This is an oversimplified equation, of course, as it is rare that a single factor is influencing your sales growth at any given time. However, you can use it to get a general idea of ROI for a particular strategy.

How-we-calculate-ROI_ROIGraph

For example, let’s say you invest $1,000 in an ad campaign that runs for one month, and you see sales growth of $2,000. Your simple ROI is 100%: (($2,000-$1,000) / $1000). That’s pretty great!

But this equation assumes that none of that observed sales growth is organic…which most likely isn’t the case.

Note: In the aforementioned equation, I use “sales growth”, but there are other values you can use that may make more sense for your business. Read more here.

Ok, so how do I account for organic growth?

To predict organic sales growth, examine your monthly sales from the previous year and calculate the average organic growth per month. You can use this average organic growth rate to estimate where your sales might have been without your marketing campaign activity, and adjust your original ROI calculation accordingly.

ROI_organic_growth

If your business has an average organic growth of 5% over the period of a year, your calculation would look like: (($2,000 – $1,000)/$1,000) – 5 = 95%

This slightly more sophisticated equation indicates that ROI for this campaign is actually 95%, a substantial difference.

How can I predict what strategy will have the biggest ROI for my business?

Your industry, location, pricing, and even brand equity can dramatically affect ROI, which is why relying on average benchmarks can be dangerous. However, you can leverage information like the following studies (published by Nielsen) to get an idea of where other companies are spending their marketing dollars:

Source: Nielsen.
Source: Nielsen.

According to this research, Online Ads/Digital Marketing Investments have a higher ROI across all industries, but “online ads/digital marketing investments” is a pretty big bucket.

Source: Nielsen
Source: Nielsen

With Instagram’s algorithm-based feed, Snapchat’s in-app ad growth, and even Reddit getting in on the “promoted post” action recently, there are tons of options for advertising online. You must take into account the strengths and weaknesses of each channel when you’re thinking about where to invest. Banner ads, for example, are a popular channel but 54% of online banner ads are never seen!

Using the aforementioned formulas, you can measure the ROI of your social media and email marketing campaigns using conversions from specific landing pages. (Simply replace “sales growth” with “funnel conversions”). You can also track conversions with UTM parameters in Google Analytics. This allows you to track your visitors from the source through your funnel to prove the results you’re driving.

For a strategy like SEO, you can track ROI using your Google Analytics: segment by organic, non-branded traffic (to gauge how you’re ranking for non-branded keywords) and track conversions. Because GA tracks multi-channel attribution, you should be able to determine whether or not a customer clicked on an ad, then came to your site through search, or vice versa. It’s not always black and white, but you can get a good idea of ROI on your SEO.

ROI_where_do_I_spend
The ultimate question: Where should you spend my marketing dollars?

Each marketing strategy you invest in will take a certain amount of time to reach your target market and begin generating ROI, so it’s important to prioritize for maximize impact. Vanity metrics ― like number of social media followers ― can be helpful in terms of gauging your brand awareness, but they shouldn’t be your main concern. You want to keep track of which strategies are actually generating sales and revenue, now and in the long run.

When you’re thinking about average ROI benchmarks for digital marketing strategies, be wary of conversions versus revenue. For example, a Fortune 500 company might be able to generate the same sort of revenue with a less than 2% increase in conversions as a smaller company with low traffic might be able to generate with a 40% increase in conversions.

Calculating the ROI of conversion optimization

Conversion rate optimization (CRO), more simply known as conversion optimization, is the science and art of getting a higher percentage of your web visitors to take action to become a lead or customer through testing.

Testing, measuring, and proving are built into conversion optimization, making ROI refreshingly easy to calculate: it’s unique in that you can see the return with each test that you run. CRO has become a de facto strategy because each of your marketing channels becomes more effective when your site is optimized.

Conversion optimization gives immediate results and that’s a great feeling. Particularly with e-commerce, if you have an idea, you test it, and you know you’re about to see what that idea is worth in monetary value.

– Jose Uzcategui, Global Analytics and Ecommerce Conversion Lead, ASICS

In an optimization experiment, your original page serves as the experimental control and benchmark for ROI. The challenger page (variation A) is tested against the original, showing the difference in conversion rates and projected revenue between the two. Marketing, promotions, and seasonality are all constant between the two pages, because they exist simultaneously.

The formula for calculating the ROI of CRO looks like this:
ROI (3)

Revenue from the Challenger or Original can be calculated from: (number of visitors x conversion rate x goal value).

For example, let’s say you run a test for one month. You spend $2,000 on designing the challenger page and it generates $5,000 in revenue from conversions. Meanwhile, your original page generates $2,000 in revenue from conversions.

The calculation would look like this:

($5,000-$2,000-$2,000)/$2,000=50%.

Related: Try our free ROI calculator to discover your company’s potential return on testing.

50% ROI! Not bad for a month-long test. However, unlike “pay once, benefit once” marketing tactics, the benefits of optimization are compounded and long-term. If this variation continues to perform at the new (increased) conversion rate for 12 months, the ROI is actually 600%: 12*(($5,000-$2,000-$2,000)/$2,000).

Additionally, as your other marketing streams (SEO, PPC, Content) funnel visitors to your website, the increased conversion rate from your conversion optimization efforts will help increase the ROI for those marketing streams as well.

Jamie Elgie | weBoost

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WiderFunnel delivers a cadence and quality of A/B testing that is game-changing for our brand. Direct sales increases are enabling us to increase our spend on other advertising because of the known performance return. That in turn is driving our overall brand awareness. Put simply, WiderFunnel does not just help us sell directly; it is rocket fuel for our entire cross-channel marketing program.

Jamie Elgie

Jamie Elgie
Chief Marketing Officer, weBoost

What does the return on testing look like over the long term?

It’s important to re-validate the results of your conversion optimization strategy every few months, to ensure that that 600% ROI prediction is actually something you can take to the bank.

Here’s an example of a re-validation test we ran for one WiderFunnel client. After two years of optimization, we had seen a calculated conversion rate lift of 259.8% compared to their original page, as shown by the dark blue vertical bars:

24 months.

This calculated, cumulative conversion rate lift had resulted in solid revenue increases. But we wanted to make sure that the calculated lift reflected the actual lift.

To do this, we ran a simple A/B test, pitting the client’s original page against the most recent variation. Not only did we validate the calculated conversion rate lift, we found that the actual lift was 282.2%!

24 months verified

This rigorous verification proves that the results from conversion optimization are not temporary. In fact, the results are, so far, permanent.

Find out your potential optimization ROI:

The ROI of conversion optimization is tangible and easy to prove because it’s baked into the strategy itself. With most other marketing strategies, you’re left guesstimating ROI; with optimization, each experiment paints a clear picture of your return on testing.

If you’re curious about your potential ROI from CRO, you should try out our ROI Calculator!

The post How to navigate the murky waters of marketing ROI appeared first on WiderFunnel Conversion Optimization.

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How to navigate the murky waters of marketing ROI

Landing Page Copywriting Secrets That the Pros Never Share

break-the-bank-650
You don’t need to break the bank to write a landing page that converts. Image via 401k Calculator.
PSST: This post was written by Henneke Duistermaat of Enchanting Marketing, Demian Farnworth of Copyblogger, Amy Harrison of HarrisonAmy.com and Joanna Wiebe of Copy Hackers. You can see all four of them speak on a copywriting panel at the Call to Action Conference in September – so get your early bird tickets now.

If you could hire four top copywriters to write your landing page, what would they do for you?

What are the tricks they’d use to engage more visitors… and get them to convert?

To find out, you could shell out well over $1000/hr and get the likes of Henneke Duistermaat, Demian Farnworth, Amy Harrison and Joanna Wiebe to work on your landing page.

That’d be money well spent, BTW.

Or you could study every word written below… fo’ free.

Sound like a good deal? Read on for a roundup of copywriting formulas, tricks and cheats – courtesy of the pros.

Start by planning your visitor’s journey (Henneke Duistermaat)

Imagine having to drive from Amsterdam to… somewhere.

How do you plan your trip?

You can’t, right?

You need to know your destination first.

Writing landing pages is much the same. Without knowing your goal, you can’t plan your landing page. Options for goals include:

  • Learn more
  • Join now
  • Start a free trial
  • Download a report
  • Buy now

Just like on a trip, visitors travel through your landing page towards a destination (your goal).

And the length of your landing page depends on your conversion goal.

A landing page for a free report is typically shorter than a landing page to buy a complicated or expensive product.


Just as the length of a trip depends on the destination, the length of a page depends on the goal.
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Remove all roadblocks

You’ve left home and connected your phone so you can listen to the latest Call to Action podcasts. You’re on your way. Yay!

…But before you’ve even left the country, you hit a traffic jam. Sigh. You know this will be a long trip, but you have to keep driving.

Your visitors are less patient. When they face too many traffic jams on your landing page journey, they might click away – and you could lose them forever.

So, as you prepare to write, keep this in mind: you must remove all road blocks and make your visitor’s journey smooth to improve conversions.

Think about your potential customers. Which obstacles could prevent them from reaching their destination (clicking your call to action)? How can you help them jump over those hurdles? Here’s how:

  • Answer any objections they might have
  • Put the most important information first
  • Chop redundant information
  • Remove irrelevant links (or links not connected to the page goal)
  • Keep your text to-the-point, remove jargon and slaughter marketing speak
  • Make each testimonial relevant
  • Improve readability with a large font and short paragraphs

To get visitors to your desired destination, ensure they know how sunny that destination is. How will your product or service improve their lives?

Use an Impact Table to cover all your bases (Amy Harrison)

amy-harrison-headshotYou’re a smart marketer, and I’m willing to wager my favorite cowboys boots that you can relate to this:

  • I want to write copy that stands out and gets the attention of my perfect customer
  • I’m pretty insanely busy

If only there were a way to remove just a little of the blood, sweat and tears from writing compelling copy…

Fortunately, there is a tool that provides a shortcut to killer copy.

I call it the Impact Table.

An Impact Table gives you an at-a-glance view of the transformation you provide to customers – while showing how you do it.

The results? Compelling copy that doesn’t sound like hype.

You can build one in three very simple steps…

Step 1: The good ‘ol list of features

Take a sheet of paper and draw up three columns with the headings:

  • Features
  • Results/Impact
  • Emotion

The first column includes any hard facts about your service or product: what it looks like, how you use it and how it’s delivered.

List as many (ideally all) features that relate to your product.

Let’s say you offer a six-month intensive training program to small business owners.

Some features may include:

Feature Results/Impact Emotion
A clear business plan within the first week
1:1 mentoring with an consultant who has 20 years experience and worked with businesses in more than 40 industries.
Developing a marketing strategy that’s easy to implement as one person

Next up, you want to:

Step 2: Write down the results/impact of each feature

As you know, features don’t exist for the sake of it. Every feature of your product or service is working hard in some way to wow your customer.

Now is when we pin down the wow.

So for each feature, think about:

  • How does this help solve their problem?
  • How can this make the service more enjoyable, easy or fun?
  • How can this help them save time or money?

For example:

Feature Results/Impact Emotion
A comprehensive, tailored business plan within the first week A clearer vision of the future: knowing exactly what they should be working on day to day to get results
1:1 mentoring with an consultant who has 20 years experience and worked with businesses in more than 40 industries. Ability to ask questions and get tailored answers – saves time and avoids dead ends from wrong advice
Developing a marketing strategy that’s easy to implement as one person Ability to attract more leads and convert clients on a consistent basis

Finally, we need to…

Step 3: Dig into the emotions

How is your customer feeling after experiencing the impact of what you do for them?

For example:

Feature Results/Impact Emotion
A clear business plan within the first week A clearer vision of the future: knowing exactly what they should be working on day to day to get results More focused, less overwhelmed, more enthusiasm
1:1 mentoring with an consultant who has 20 years experience and worked with businesses in more than 40 industries. Ability to ask questions and get tailored answers – saves time and avoids dead ends from wrong advice More confident, reassured
Developing a marketing strategy that’s easy to implement as one person Ability to attract more leads and convert clients on a consistent basis In control, less stressed, ambitious

Using your Impact Table

Now you have a number of key phrases that you can pretty much plug in directly to your copy.

When you include details from all three columns, you create an attractive promise with credibility.

For example:

You’ll leave the course with a clear business plan within the first week. (Feature) This cuts through the overwhelm (Emotion) and gives you a clearer vision for your business (Results/Impact). You’ll know what you should be working on and when, and what efforts are most likely to generate more sales and increased income (Results/Impact). This alone can help capture the enthusiasm you felt (Emotion) when you first started out.

This combination of features, results and emotion is key.

  • If you only focus on emotion, your writing will sound wishy washy.
  • If you only focus on results, you can draw scepticism from customers who think “sounds great but how can they possibly achieve that?”
  • If you only focus on features, your writing will sound dry and you’ll struggle to make an emotional connection with your customers.

Using the Impact Table lets you combine all three to achieve the Goldilocks level of “just right.”


Check out this simple formula for gut-checking your copy for features, results and emotion.
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Identify a problem, agitate it, then solve it (Demian Farnworth)

demian-farnworth-headshot

One of my first jobs out of college – with an English Lit degree freshly minted under my belt – was to write descriptions for a world-famous televangelist’s product sleeves.

This was my first real job as a copywriter, so, naturally, I thought I knew it all.

But I knew nothing.

Given that the televangelist covered a lot of material, I needed a way to compress everything into a compelling, sticky little message. I had limited space. I had limited time. (I had poems to write.) So I did what every self-respecting copy cub would do: I dialed into AOL.

Typing in “write copy fast” and “faster copy” didn’t amount to much as I rummaged through the search listings. But as all things happen online, even in the dial-into-AOL days, one thing led to another… and I found myself pillaging some direct-response copywriter’s email newsletter archive.

It was exhausting, fascinating work. But a few hours into it I found the prize:

The problem-agitate-solve (PAS) formula

The formula works like this:

  • Identify a problem
  • Agitate that problem
  • Trot out the solution

Need to write punchy copy, quick? Identify a problem, agitate it, then solve it.
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Once I’d internalized the concept, I decided to experiment with the copy from the televangelist.

Here’s how one of my early attempts looked:

Insecure? (Identify.) You’re not alone. Millions of people admit to being insecure. Yet, remain that way and you’ll live a life in the shadows. A life on the fringe. Always wishing, never doing. (Agitate.) Fortunately, there’s an answer. (Solve.)

Then I’d introduce the televangelist’s teaching for that tape, which was the solution.

Worked like a charm.

Naturally, you’ll figure out ways to add variety. Otherwise the formula will get stale and you’ll get predictable. One way to add variety is to ask a number of questions (instead of just one):

Disappointed with your job? Hate your manager? Coworkers annoy you? Love to work for yourself? You’re not alone.

And so on.

Keep in mind: this formula works equally well for long-form copy. In fact, most successful sales letters use the PAS formula in some ways (even loosely).

So here’s my challenge to you: keep your eyes open for the PAS formula in action.

Make every message better with “So what?” and “Prove it!” (Joanna Wiebe)

joanna-wiebe1

It’s a universally-acknowledged truth that a prospect in want of your solution is going to have a damn hard time believing your copy.

See, the biggest problem with marketing copy is this: it’s written by the very people who want to sell what’s being sold. It’s not objective. So, in your prospects’ eyes, your copy is unlikely to give a balanced view of the product or service under consideration.

The result?

Prospects are always-already in a state of suspended disbelief when they read our words. They’re suspicious. They’re watching for gotchas. They, quite simply, don’t believe you.

Expect that to always be true.

Repeat after me:

My visitor doesn’t believe me.

Once we realize that that’s true, we can improve our copy to make every message far more believable.

Here’s how: whenever we write a message, we assess it using the following two questions.

  1. Is it clear what the value or outcome of this is for my prospect, and
  2. Have I proven it to be true?

Essentially: So what? And prove it.

Let’s say you’re selling at-home teeth whitening kits and you’re writing a lead gen page for a free ebook on DIY tooth whitening. You want to tell prospects that your free ebook will teach prospects the easy path to whiter teeth at home. You need to support that message with:

  1. So what: You won’t have to waste 20 minutes painstakingly brushing on peroxide one tooth at a time.
  2. Prove it: A testimonial that speaks to the promised easy path one will learn about.

You could even merge the two. Use a testimonial (prove it) that is about your outcome (so what):

I used to waste at least 20 mins painting each tooth with peroxide (one by one!) and worrying the whole time that I’d bleach my gums. But this one tip you gave – I think it was on page 7 – showed me what I was doing wrong… and how to fix it fast.
– Tess T. Monial

Let’s look at a real-life example.

So you’re selling insurance and this is your landing page:

kanetix-lp
Yes, that’s the whole thing.

Your lead message is “Compare life insurance quotes.”

That’s what you want people to do. You believe that is what people want to do.

Now let’s see if you’re making that message desirable and believable by assessing it against “So what?” and “Prove it.”

It may seem that “Get quotes fast” addresses the so what… but it’s actually just another layer of messaging that needs support. In fact, in its current state, this copy doesn’t express why the visitor should care or believe you.

So here’s what we do to make this copy work. We fill in a table like so (copywriters love tables):

So what? Prove it.
Compare life insurance quotes. You’ll instantly get the best prices – and waste absolutely no time hunting down great rates. Here’s a preview of the at-a-glance comparisons you can expect to see in less than a minute:
Get quotes from top providers in less than 60 seconds. If you looked for quotes from just 10 providers – a fraction of what we’ll give you – it could cost you more than an hour of your time. Average time to retrieve quotes from 5 providers: 48 seconds.
Now offering quotes from names of top providers.

Add those messages to the page. And now you’ve got copy that your prospects are more likely to believe and an offer that is far more desirable.

Your page gets longer, yes.

But the messages work harder – so the extra words are worth it.


Your prospects are thinking, “So what? Prove it.” Address that on your landing page.
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Every word counts

Don’t underestimate the power of any line of copy on your page.

As you’ve now seen, there’s a lot you can do to optimize your copy.

We’re not promising better copy in 20 minutes or less – this isn’t pizza, after all. It’s your online business.

If you follow the tips outlined above for each page you write, your business is sure to see the kinds of results our clients see.


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Landing Page Copywriting Secrets That the Pros Never Share

Designing For Device Orientation: From Portrait To Landscape

The accelerometer embedded in our smart devices is typically used to align the screen depending on the orientation of the device, i.e. when switching between portrait and landscape modes. This capability provides great opportunities to create better user experiences because it offers an additional layout with a simple turn of a device, and without pressing any buttons.
However, designing for device orientation brings various challenges and requires careful thinking. The experience must be as unobtrusive and transparent as possible, and we must understand the context of use for this functionality.

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Designing For Device Orientation: From Portrait To Landscape

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You’re Pricing It Wrong: Software Pricing Demystified

Pricing your own product is always a tricky proposition, and the more critical the price is to your product’s success, the more difficult it is to set. It’s easy to look at another product and say how much you would be willing to pay for it, but how can you know how much people would be willing to pay for yours?
There are no absolute truths or perfect formulas for finding the best price, assuming that the “best price” even exists.

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You’re Pricing It Wrong: Software Pricing Demystified

50 Powerful Time-Savers For Web Designers

There are tools that make our lives much easier. However, finding those obscure time-savers which would save time in every single project isn’t easy and requires a lot of time. At Smashing Magazine, we are regularly looking for such useful tools, gather them, review them and eventually prepare for a truly smashing round-up. Such posts are quite lengthy and extensive, but they are always worth checking out.
In this post, you’ll find an overview of useful and handy tools that can help you increase your productivity and improve your workflow.

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50 Powerful Time-Savers For Web Designers

The Showcase of Beautiful Pinhole Photography

Camera is a remarkable piece of innovation. However, it is the person behind the camera that makes it truly remarkable. It’s his imagination, passion, talent and knowledge of the medium. You don’t need a high-end costly equipment to get beautiful results. Just your talent and a way of looking at things differently along with ability to envision the final result in your mind is more than enough for a great shot.

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The Showcase of Beautiful Pinhole Photography

35 CSS-Lifesavers For Efficient Web Design

CSS-design is not easy. We need to find workaround across browser inconsistencies, not that easy CSS-concepts and quite counterintuitive CSS-solutions. However, there are effective and useful CSS-tools and Smashing Magazine reviewed many of them in our previous posts. Now it’s time to present you with some fresh (or not mentioned earlier) tools that can assist designers in their work.
Today, we will look at 35 new and useful CSS tools, generators and resources that can significantly improve your workflow and reduce your time efforts for CSS-coding.

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35 CSS-Lifesavers For Efficient Web Design