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Simple strategies marketers should use to analyze the strength and ROI of their funnel

By Expert commentator 26 Jan, 2018
Essential
Conversion optimisation strategy

See better results and bigger wins using a test-driven B2B marketing strategy

Gambling on hunches when deciding which tactics and channels will help you achieve your goals is a flimsy strategy that could land you on the wrong path.

The same mistakes are made far too often. Marketers try a channel once, get a disappointing result, and decide the channel doesn’t meet their needs. Or after the channel fails to produce, they continue to plug away at it forever, assuming things will eventually work out.

Good channels don’t always reveal themselves right away, and bad channels don’t turn into good ones after meeting a nonexistent spending threshold. To avoid early abandonment and wasted budgets resulting from a prematurely folded hand, employ small marketing tests to evaluate channels across multiple audiences and creative approaches before the next round of betting.

The most successful marketers analyze new marketing channels according to not only their current performance but also their growth potential.

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Sizing up opportunities

By looking at what a channel could become rather than what it is doing right now, you can base decisions on validated strategies instead of short-term numbers.

In that sense, marketing and poker have even more in common. In both games, you'll lose if you never bet, but you'll also lose if you go all in on the wrong opportunity. The trick is to place small "test" bets, analyze the results, and push forward on the most promising plays.

Let’s say you’re in the middle of testing one creative asset on one audience and things are going well. Because that small bet is indicating an opportunity for bigger gains, you want to double down on that channel and add new audiences and creative content.

On the other hand, if one channel continues to disappoint despite using multiple creative assets, targeting multiple audiences, and A/B-testing multiple combinations, drop the channel and move on. ROI will not eventually show up in a channel that exhibits no potential. Nonetheless, don't look at your experiment as a failure — you've gained deeper insights about your audience.

Balancing out

Evaluate the success of each channel based on the opportunity it represents. Does this channel have growth potential for the next month or the next year? Did the test succeed because the content referenced a current event, or will evergreen appeal replicate the success across more tests?

Short-term wins matter less than long-term opportunities, so keep analysis periods long (at least one month) before deciding what to do next.

We tried Facebook ads in the past, for example, and gave up because they weren’t producing the ROI we wanted. Our director of marketing, however, still saw potential for us on the platform. He spread $1,000 across five content tests over three months to see whether we had missed a winning combination.

As it turned out, he was right. Today, our Facebook strategy provides a dependable pillar of growth. We target a combination of lookalike audience and entrepreneurial interest, sticking to Facebook lead ads over normal ads. This strategy has reduced our lead acquisition costs by 80 percent. None of that would have been possible if our marketing director hadn't tested different content before we moved on.

How to decide whether you should go all in on a channel

Testing the success of a marketing channel isn’t easy. Uncontrollable social factors can change short-term messaging success, but you don’t have to wait a year before rendering a verdict on whether to invest in a channel. Follow these four steps to weed out bad investments and identify channels that will provide the greatest ROI.

1. Know what you're trying to change

Establish a measurable goal, and create a benchmark against which to measure your progress. Collect current data and measure regularly throughout the test to see whether your efforts are changing the numbers and, if so, which changes are the most impactful.

At Ladder, we set a goal to increase conversion rates in the below-the-fold section of our website. We benchmarked our performance at 0.75 percent and then decided to shoot for a 1 percent rate. Our designer moving our client logos and social proof section below the fold resulted in a massive uplift of 1.25 percent CVR and even boosted conversion rates in our hero section.

2. Build a hypothesis that centers your tests

Without a hypothesis, you risk measuring the performance of your test against the wrong metrics. Set your goal, and then develop a hypothesis of what you expect your test to achieve and how it will achieve it.

The best hypotheses start out broad and get narrower. Begin with a general idea, establish how the test will operate, and then make an educated guess about what will happen in the form of an if-then statement.

Say you want to try to improve conversions from ads on Twitter by using a blog post as the content. Your baseline Twitter conversions are at 1.2 percent, and you estimate that your improvement will push that number to 1.5 percent. With those facts, your hypothesis becomes, “If I use this blog post in my Twitter ads, my conversion rate will improve to 1.5 percent because the content in the blog encourages readers to buy our product.”

3. Report on everything all the time

Report on performance weekly to keep track of tests and to create data points to evaluate once the test ends. Don’t overreact to one good week or one awful one. Let the full test play out, and then evaluate the total results at the conclusion of the experiment.

At the end, ask questions about the impact of the tests, the accuracy of the hypothesis, and cause of the results. If you set out to increase Twitter conversions to 1.5 percent but conversions fell below 1 percent, don’t get frustrated. Learn from the experience and design a new test with a new hypothesis.

According to a survey by Epicor, more than 46% of CFOs admit to relying on instinct when making important business decisions even when available data could help them because it's too tedious to access. Don’t make such avoidable mistakes. Listen to your data, and let the results of your experiments guide your next move.

4. Compare against the industry

With the experiment complete and the results tabulated, look around the industry to see how other companies are doing. According to our own research, 57% of marketing experiments fail, so even if you didn’t get the results you wanted, your data still provides valuable information on your position in the market.

To illustrate: If you set out to improve your cost per click on Facebook, how did you do against the global average of 48 cents? If you planned to get more exit-intent email captures, are you above or below the average? Look for these numbers, as well as industry-specific figures, to see where you have room for improvement.

Small tests turn hunches into data and data into viable strategies. Follow these tips to identify and analyze the potential of new marketing opportunities.

By Expert commentator

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