In terms of how to measure and plot your online strategy, there are three lenses which I always advise looking through: acquisition, conversion and retention.
What these elements refer to are:
Acquisition – of users (and the tools you employ to do this);
Conversion – of users to a specific action (signing up for an email, making a purchase, liking you on Facebook etc); and
Retention – ensuring that you keep your customer happy and returning.
There are a number of tools which you should have in your arsenal for each of these. At Now Novel, we focus on the activities which are the cheapest with the maximum impact, so I’ll focus on these.
These are things like SEO (optimizing your site for search) paid search, Facebook advertising, banner buys, content marketing or any other method that you use to get people to your site. These usually cost money, and your objective is to find one or two channels that have a low cost per acquisition of users.
The classic conversion means converting someone to a payment. If you are Coca Cola, for example, or a site that undertakes its sales via personal selling, you wouldn’t have this kind of goal. Your conversion would be more focused on aspects like registering to leave your email address, reading a particular page, or liking a social channel.
In the ideal world you should have an idea of what your lifetime value of a customer is – ie. if someone is signing up for a newsletter, you’d expect them to make three sales from you, which would net you R50. This can then inform your acquisition strategy, as you’ll know that you need to acquire a user for under this price – the normal aim is to aim for 1/3 of lifetime value, but you’ll have your own margins and discussions.
This deals with the further purchase, or attempts to convert users to further purchases. This would be your social strategy, and your email strategy. Essentially, you want to keep educating your users about the benefits of what you do, and reach out to them at the right time to convert them again. Retention is a much-overlooked channel, because once you’ve acquired a user it is much better to try and maximize your revenues out of them.
Using the above examples, if you can convert a user from three sales to four, then your lifetime value increases, and your ability to spend and acquire users also increases, enabling you to bid more than your competitors, and ensure more sales.
If you’re doing your digital marketing planning for the year, remember to include a component from all three of these areas, to ensure you maximize your return from online.
Originally published MWEB site.