What metrics are clients using to judge your marketing agency on? Natalia Selby, Marketing Executive at Mediahawk, looks at qualified leads, pipeline contribution, cost per acquisition and year-on-year growth and how to meet your clients expectations.
Running marketing campaigns to generate business for clients is at the heart of every digital agency’s success. After all, they’re entrusting you with a large percentage of their marketing budget, so delivering on your promises is key.
However, deciding exactly which metrics will matter the most to an individual client can be a challenge. Some will solely focus on sales volumes, whilst others will prefer to study customer acquisition in order to determine exactly how much obtaining a single customer costs.
Here are four metrics that your clients are really judging your agency’s performance against.
- Qualified Leads
If your clients are investing in several marketing channels, they’ll have multiple ways of generating leads. However, simply knowing whether your clients are obtaining leads isn’t enough. You need to know exactly which marketing channels have brought in the most qualified leads, otherwise, how can you fully report back to your client on the success of their investment? Also, how will you know whether an under-performing channel needs optimising?
For example, let’s say your agency has a client who receives a great deal of their business through telephone calls. If customers are finding your client’s business online but deciding to convert offline, then having the ability to know which marketing channels these calls originated from is crucial for determining their exact return on investment (ROI) from investing with your agency. This is where call tracking comes in.
Call tracking, from suppliers such as Mediahawk, joins the dots between advertising spend and lead generation. With visitor level call tracking, you can allocate unique, dynamic phone numbers to each of your client’s marketing campaigns. This way, you can pinpoint whether a lead discovered your client’s website through a pay per click (PPC) ad, organic search, a referral or a remarketing ad before finally contacting them via the number assigned through the call tracking software.
With this information, you can determine whether the marketing campaigns you’re running for your clients are generating profitable phone call leads, or whether they need re-adjusting (e.g. changing the bid management for a PPC campaign, or building more links to certain organic keywords) to achieve a greater ROI.
- Pipeline Contribution
Agencies have been using lead generation as a marketing metric to measure client success for decades. However, not every lead is guaranteed to turn into a sale. On average, fewer than 1% of leads become sales meaning that the rest are in various stages of your client’s sales funnel or have ’leaked’ out. As their marketing agency, your role is to plug this leak and improve their conversion rates. But how exactly can you achieve this?
Pipeline contribution measures the number of opportunities generated by marketing that convert into new opportunities and, ultimately, sales. It focuses on a comprehensive view of the sales funnel and optimising all aspects of marketing to widen the funnel at every stage to increase sales.
Here are three ways your agency can improve your client’s pipeline contribution:
- Improve initial lead quality: Using feedback from sales you can improve targeting, qualification and conversion. The goal is to deliver more qualified leads who are aligned with your client’s ideal customer profile.
- Align marketing strategies with leads’ behaviour and the customer journey: Initial touch-points typically derive from search, email or social campaigns and provide general information on a customer. Further touch-points rely on mid-sales funnel tactics such as lead nurturing programmes and retargeting ads and create opportunities for case studies to be written as well as product/service comparisons.
- Work directly with sales: Identify conversion challenges and formulate solutions to specifically target and accelerate slow pipeline points.
- Cost per Acquisition
Knowing your numbers is key to impressing clients. However, one metric that matters above the rest is cost per acquisition (CPA). After all, tis metric measures a client’s true ROI and exactly how much it costs them to earn a customer.
In simple terms, CPA measures the aggregate cost of acquiring a conversion against marketing spend. This conversion could be a contact forum submission, a click, a PDF download or a sale.
Determining what your client’s CPA should be depends on their average revenue is per customer. A good way to begin is by taking their total revenue over a period (year/month) and dividing that number by the number of customers they’ve had during the same period:
Average Revenue per Customer = Yearly Revenue/Yearly Customer Count
Once you know exactly how much an average customer is worth, you can determine what your client’s average profit is. Then, your client can inform your agency how much they’re willing to spend to obtain a customer. This data can also be used to analyse their current marketing campaigns and identify which channels are generating the highest ROI and recognise those that have a higher CPA than they are worth. This way, your clients will know that you’re delivering them the highest possible number of leads at the lowest possible cost for each channel.
- Year-on-year Growth in Website Traffic
Although checking month-on-month (MoM) website traffic is advantageous for tracking data over shorter periods of time, e.g. perhaps you ran a PR campaign one month which generated considerable coverage and saw traffic increase as a result, it doesn’t help with outlining long-term goals and developing marketing campaigns for your clients.
Year-on-year (YoY) traffic on the other hand, can help your agency provide your clients with a full overview on how your efforts have benefited them, identify opportunities for future growth and potentially encourage them to spend more with you. You can view YoY traffic in Google Analytics: Acquisition -> All Traffic -> Channels.
For example, based on this Google Analytics data, it is clear that this website has seen a 49.96% YoY increase in organic traffic from November 2016 – November 2017, indicating that their SEO tactics for organic search are working. Furthermore, as their new users are up 59.83% this highlights that more potential leads are discovering their website via organic search, increasing their chances of obtaining new leads from this marketing strategy.
However, once the data YoY data was viewed overall, sessions are actually down 3.59% – why is this?
Well, once the data was YoY data was filtered by the individual traffic sources, it can be seen that paid traffic (display ads in particular), saw a YoY decrease of 43.15%, which could be significantly affecting the figures. If this was your client, consider any changes that might have been made to their paid advertising in the past year; perhaps they reduced the amount of budget available? Reduced funding will inevitably have an effect on the amount of paid traffic a website receives.
Furthermore, looking into the reasons why website traffic has changed, either positively or negatively, will help avoid unnecessary blame or reasoning on your agency’s part. Perhaps a new competitor entered the field or the market experienced a shift? It could even be down to changes in consumer demand! However, if the quality of the campaign is the reason, you can reshape your paid advertising campaigns to ensure your client starts to see a clear ROI.