Data in a Changing Digital Landscape
The information you need to know and a guide on how to assess it.
By Jordan Smith, Scorpion
There is a lot of data available today for franchises to leverage when making decisions about their business. With so much information abound, it can become confusing to know what to pay attention to and what to ignore. In an ever-evolving digital landscape, the increasing number of marketing channels and opportunities only compounds this cloud of confusion.
To cut through the noise, there are key performance indicators that will help any franchise brand gauge the success of their marketing strategies. These should be measured holistically with the understanding that the sum outcome of an integrated marketing plan is greater than its parts.
Critical key performance indicators franchises should consider:
- Total Revenue
- Number of New Customers
- Number of Repeat Customers
- Cost per Acquisition
- Cost per Lead
- Advertising Reach & Engagement
Advertising, spending and planning.
If these KPIs are performing well, chances are your marketing strategies are working harmoniously. But what if some KPIs are on target while others are off the mark? This is where I’d like to introduce a fundamental marketing maxim, and that is that nothing you do in advertising and marketing is done in a vacuum. It’s a simple truth, but is easily missed.
Mailers, radio spots, Facebook ads and video ads are all examples of conduits that can influence the successes or failures of your other advertising channels. Is it worth spending $1,000 a month on digital display ads if it produces zero leads, but drops your PPC campaigns CPL by 20 percent? Does your average conversion rate increase by five percent so that three new customers are converting each month?
That’s why it is so important to understand that advertising channels coexist in an ecosystem and to plan, execute and measure all your initiatives as a unified advertising strategy.
It’s how you use the data.
In grad school, I had an advanced statistics class that talked about how good data, applied incorrectly, can lead you to bad conclusions. For example, there is a classic story of correlation without causation when measuring the number of people who eat ice cream and the number of people who drown while swimming. Data shows that ice cream consumption and drownings both increase during a typical summer. Does that mean eating ice cream causes drowning? We know that is ridiculous and that eating ice cream doesn’t cause you to lose your swimming ability. We can make the same faulty assumptions with our advertising if we aren’t careful.
Over the years I’ve had franchisees tell me they “only care about how many calls they are getting,” or “I only look at my Cost-per-Lead.” These are certainly important KPIs to be measuring, but often our perspective can be so narrow or limited that we miss the bigger picture of what the data is showing us and miss out on what is truly driving success and failure.
Marketing data can be misinterpreted.
One example of this is a franchisee who is frustrated because his PPC campaign’s average CPL is higher than what other locations within the brand are seeing. He thinks something must be wrong with the management of his campaign. While that isn’t out of the question, there are several other pieces of information he should consider first:
- What does my local brand strength look like compared to other zees? (How visible is my brand compared to my competition both online and offline with impressions, brand specific searches, views, etc).
- How competitive is my market compared to others? How many competitors do I have compared to others within my own brand?
- Is my click-through-rate healthy, but my conversion rate low? Is the content on my landing page relevant? What is my bounce rate? How well are my employees handling inbound calls?
A franchisee is reviewing the keyword list that has been used for his PPC campaign. He looks at a few things, particularly keywords delivering the most clicks and the cost and leads associated with those clicks. He will naturally start to focus on which keywords delivered the most leads, as he should. But he should also ask what the lifetime customer value of a client is that would be connected to a keyword and does he have keywords that only get a few clicks, but high conversion rates?
A franchisee may consider cancelling his display ads because he isn’t seeing any direct “leads” come in like he does from his PPC campaign. He should be considering:
- Have I seen my click-through rate on organic and paid traffic go up since starting my display ads?
- Has the bounce rate improved on my web pages related to the display ads I’ve been running?
- Is the messaging on my display advertising aligned with the rest of my other marketing efforts, both online and offline?
- Has the conversion rate on any of my other paid efforts increased,
- although there have been no substantial changes to the management of them?
There is so much insight that can be gained by examining how one advertising change, whether it be messaging, channel, or creative, affects the performance of your other advertising efforts. Marketing works in an ecosystem and understanding how different strategies and tactics influence and work alongside each other is the key that drives marketing success.
Jordan Smith is the Senior Vice President of Strategic Marketing at Scorpion. Find out more about Scorpion here.