FREQUENTLY ASKED QUESTIONS
How to Calculate Customer Lifetime Value (CLV)
Depending on your industry, there are a number of ways to calculate Customer Lifetime Value (CLV). If you sell a monthly service, you could take your (average revenue per monthly per customer) X (gross margin) X (the average number of months a client stays with you). If you run a home service business (HVAC, plumbing, etc.), you might take your (average revenue per job) X (gross margin) and also take into account the number of times a customer uses you over a period of, say, 10 years and how likely they are to refer you to other people.
How do you calculate marketing ROI?
ROI stands for return on investment. If you Google “marketing ROI,” you’ll get a million different defintions. Which you use depends on your needs and business situation. The most simplistic version is to take the gross profit generated from a particular marketing investment, subtract the cost of the marketing campaign from it and divide this number by the cost of the marketing. ROI is typically expressed as a percentage, so multiple your answer by 100. So, if you spend $1,000 on a marketing campaign that generates $5,000 in gross profit, your ROI would be 400%.
What is ROAS?
ROAS stands for return on ad spend. To calculate ROAS, you take the revenue generated from the advertising campaign and divide it by the cost of the advertising campaign. If you pend $10,000 on an ad and it generates $100,000 in business, your ROAS would be $10. ROAS can be a useful metric when you want to compare the performance of two different advertising channels.
What is website conversion rate?
Website conversion rate is a critically important metric used to measure and improve website performance. It is typically calculated by dividing the number of defined conversions by the number of visits to your website (expressed as a percentage). In some industries, and depending on what you’re actually trying to measure/improve, it might be calculated using a segment of visits (vs. all visits). For example, a local plumber serving Colorado might have a 4% conversion rate when using all visits, but a 14% conversion rate when visits are segmented to only calculate the number using visits in Colorado—after all, can the local plumber really expect a visitor from China to convert? Not likely.
In the quest to get more business from the web, most businesses tend to overlook improving conversion rates in favor of generating more traffic. In some cases, this makes perfect sense. If only a handful of visitors come to your website each month, you may not even have enough traffic to run the tests necessary to improve your site’s conversion rate. On the other hand, there are companies that already have more than enough traffic to do CRO testing, but they overlook it.
How to Track SEO Rankings with Google Analytics
You can no longer track rankings in Google Analytics. However, there are a number of tools that can show you how you rank. If you want to see how you rank or find out how we can help your rankings improve, reach out to us today.
Tools to Check Your Google Ranking
What is a conversion?
Web marketing people love to create new terms for things you thought you already understood! In the world of Internet marketing, the word “conversion” represents any action on your website that is more valuable than someone that visits your site and leaves without doing anything. What constitutes a conversion depends entirely on the industry and on the individual company.
For business to business (B2B) marketers or complex business to consumer (B2C) sales (i.e. a remodeler), common conversions include:
- Visits to a key web page
- Views of a marketing video
- White paper downloads
- Email newsletter sign up
- Web form submission
What is Bounce Rate and is it important?
One of the more commonly referenced website analytics terms is “bounce rate.” What is bounce rate? What does it mean? Is it an important metric to monitor? Let’s start with defining what a bounce is. A bounce occurs when someone visits your website, views a single page, and leaves. In this scenario a website tracking tool like Google Analytics, would report one bounce or a 100 percent bounce rate (depending on which type of report you run/view).
A high bounce rate can be a sign that your content is not targeted to the visitors wants and needs, but a high bounce rate can also be a positive indicator. Which it is depends on the answer to this question, “can you get value out of a single page visit?”
Think about this for a moment…
Most types of web leads – a white paper download, registration for a webinar, email newsletter sign up, web form submission, etc. – require the visitor to view multiple pages (resulting in a zero percent bounce rate). If these (multi-page visits) are the only ways your business generates leads, Avinash is correct, a high bounce rate is bad. However, what about businesses that get leads via phone?
Let’s say you own a plumbing and hvac company in Arvada, CO. Someone searches Google for “furnace replacement Denver CO”, finds and clicks the furnace replacement page on your website, they pick up the phone and call you to see how quickly you can get to their house. As soon as they book the appointment, they close their laptop and get on with the rest of their day. How would Google Analytics report this visit? You guessed it – as one bounce (or a 100 percent bounce rate – depending on the report you view).
If this were your business, would this scenario be considered positive or negative? Positive, of course – you’d take single page visits all day long! So, you need to consider a few other metrics before making a determination as to whether a high bounce rate is bad or good.
What is Dynamic Number Replacement (DNR)?
Dynamic Number Replacement (DNR) and Dynamic Number Insertion (DNI) are a call tracking technologies which allow advertisers to change the phone numbers on a given website based on parameters set by the advertiser.
For example, let’s say an advertiser wants to more accurately track the return on marketing investment (ROMI) from a print ad. Instead of placing their regular website address in the print ad, the advertiser uses a vanity URL that they’ve registered with GoDaddy. The advertiser goes into the DNS settings in GoDaddy, forwards the vanity URL to their main website, and adds “?_refdom=vogueprintad” to the end of the URL. When the advertiser’s call tracking software sees a visit with this code—”?_refdom=vogueprintad”—it dynamically changes the phone number on the advertiser’s website with the phone number assigned to track this print campaign.
A company using dynamic number replacement can tell their call tracking software, “if someone visits my Facebook page and clicks a link to my website, change every phone number on my website to 800-XXX-XXXX.” By doing this, a company can see exactly which phone calls came from prospects that first visited the company’s Facebook page before clicking on a link to their primary website.
What is Content Marketing?
When you create content with the intention of attracting and engaging prospective customers, you’re engaged in content marketing! The content you create can be articles, blog posts, case studies, custom magazines, email newsletters, microsites, webinars, videos, and much, much more. Content marketing has become incredibly popular – some marketing gurus claim it’s the only effective form of marketing left.
Three things are driving the content marketing revolution:
- A fractured media market has made it much more difficult for advertisers and marketers to cost-effectively reach large groups of people (like they once did).
- Technological filters like caller ID, DVR, email filters, etc. have improved making it harder to “interrupt” people with mass messages.
- Everyone has a library of information at their fingertips (the Internet). Consumers educate themselves by searching for information.
Mass Media Has Become Micromedia
In the 1950s, there were three TV networks. Today, there are too many to count! At the same time, advertising prices have not necessarily fallen (in many cases, they’ve gone up considerably). The end result is that it’s far more difficult to cost-effectively put a message in front of a large audience. Savvy marketers have responded by hyper-targeting their messages to a larger number of micromedia outlets – placing viral videos on YouTube and Vimeo channels; creating podcasts and recorded webinars, etc.
Technological Filters Make Avoiding Ads Easy
Even when marketers find a large audience, it can be difficult to get a message through to them. Technologies like DVR and TiVo, make it easy for consumers to skip over commercials. Email SPAM filters can make it virtually impossible for anyone you don’t know to reach you. The solution is to create content that consumers and prospects not only want to view, but also end up sharing. Viral videos are a great example of this.
The Internet: A World of Information at Your Fingertips
In the past, if you needed a plumber, you might have had to sift through your mail to find a post card with the name of a local plumber on it. Today, you can pick up your phone and search, “maryland plumbers” and presto, you’ve found the right plumber for you! The Internet has fundamentally changed the way people shop. If you’re in the market for a new car, you no longer have to rely on your local car dealer to educate you on all the new models. You can go to Google and get more (and better) information in 15 minutes.
Why Content Marketing is so Important
Recall the last point made above. Today’s consumers are far more likely to research a product or service BEFORE they make a buying decision. When they do an informational search on Google, are they going to find you or your competition? This is a critical question and the driving force behind the content marketing revolution.
Content marketers know that the game is won by being visible when someone is starting to research the product/service you offer. You need to have a seat at the table and take an active role in educating them about how to buy whatever it is you’re selling. Content marketers focus on creating highly-valuable content for each different aspect of the buying cycle – from the research phase down to comparing prices and preventing buyer’s remorse post purhcase.
If you invest in content marketing, you must educate prospective clients, establish authority, and build trust. The idea is that when they are ready to make a buying decision, your company is more likely to win the business.
Why do you think we’ve taken the time to write all these FAQs! Our theory is that the more you know about Blue Corona and our perspective on online marketing, the more likely you are to hire us to help you with your business.
Contact us today to learn more about how Blue Corona’s team can help you use content marketing can help you grow your business.
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