By Nicola Martin ·
Imagine you’re reviewing the month’s marketing with your team. One campaign has brought in 100 enquiries at £20 each. Another has brought in 50 at £60 each. You’ve spent more on the second campaign and received half as many enquiries, so it’s probably the one you’re about to question.
Someone suggests moving its budget into the first campaign. On the numbers in front of you, that seems perfectly reasonable. Before you agree, though, there’s something worth asking: how many of those enquiries actually turned into customers?
For this example, let’s say the first campaign brought in two customers and the second brought in ten. You spent £2,000 on the first campaign, which works out at £1,000 in advertising for each customer. The second cost £3,000, or £300 per customer. The campaign you were about to cut is starting to look considerably more useful.
This is where reporting can lead a business into trouble. The cost-per-lead figures were correct. Nobody needed to manipulate anything to make the first campaign look good. You simply hadn’t been shown what happened next.
Microsoft’s September advertising update caught my attention for this reason. Its integration with HubSpot allows businesses to connect advertising clicks with the contacts and deals recorded in their customer database, helping them see which campaigns contribute to sales opportunities and revenue. For a business trying to work out where to spend its next £1,000, that connection could be useful.
Of course, connecting the software only gets you so far. Someone still has to record whether the enquiry was suitable, whether it progressed and what the customer eventually bought. An empty sales record won’t become more informative because you’ve connected it to an advertising account.
You can see how the gaps develop. The person managing the ads knows which campaigns generated enquiries. The sales team knows which people answered the phone and which were never going to buy. Finance knows who paid. Everyone holds a piece of the answer, but the monthly marketing report may still stop at the enquiry form.
Then the next budget is agreed using only that part of the story.
Even knowing which enquiries became customers leaves another question. What did those customers contribute after the cost of serving them? A large order with a narrow margin can be less valuable than a smaller one that takes little time to fulfil. A customer who returns regularly may justify a higher initial acquisition cost, although you need evidence of that repeat business before counting on it.
There are useful clues in the unsuccessful enquiries too. Perhaps one campaign attracts people outside your service area, or people expecting a price you could never offer. Perhaps another attracts suitable buyers, but they wait three days for a reply. Those problems need different responses. Looking only at the number of leads won’t tell you which one you have.
For a small business, I’d start with a manageable piece of work. Take a batch of enquiries that have had enough time to progress through your usual sales process. Find out where they came from, whether they were suitable, whether they bought and what the sale was worth. Where possible, look at the margin and the time involved in winning and delivering the work.
You may discover that your records are patchy. That’s useful to know too. Agree what needs to be recorded from now on, who will update it and when you’ll review it together. A spreadsheet can be a perfectly reasonable starting point if the volume is small enough to manage.
It won’t explain every influence on a purchase. Someone might hear about you from a colleague, read your articles for months and eventually click an advert before enquiring. That final click doesn’t tell their whole story, and it shouldn’t receive all the credit by default. You can still improve your decisions while accepting that some of the journey will remain unclear.
As more campaign decisions become automated, I’d want businesses to pay closer attention to the results they’re asking their software to pursue. If a completed form is the only success you record, you have limited information about whether the advertising is bringing in people who are likely to buy. Reliable sales outcomes give you more useful evidence to work with.
The next time you’re told that the cost per lead has fallen, ask what happened to those leads. If more became customers at a sensible cost, that’s encouraging. If the sales team spent the month chasing people who were never suitable, you need to know that before increasing the budget.
That’s the kind of work we cover in the Insights Loop Digital Marketing & Implementation Programme: understanding what the figures tell you, finding what’s missing and using the evidence to decide what to do next. If you’d like to explore that for your business, book a call with me.