In order to achieve a revenue goal through internet marketing, there are 4 vital statistics that need to be determined before crafting a strategy to reach the desired revenue amount. With these numbers identified, you will know at every point where you are in relation to your goal. It will reveal whether or not you are on track.
There are four key metrics that business to business marketers need to know to evaluate their online marketing which are:
First, What is the revenue goal?
The decision makers want to know at the end of the day how much revenue they will acquire as a result of this marketing endeavor. It is important to determine if it has a positive return on investment. Before you dive in to online marketing, it is essential to know how much revenue is expected from internet marketing.
Let’s say, you’d like to acquire 100,000 in sales as a result of internet marketing. If your net profit is 10,000 per item sold, then it will take 10 sales to break even with the marketing investment. To achieve a positive ROI, it is necessary to achieve over 11 sales over the course of 12 to 24 months.
Each business has unique revenue goals as well as unique performance metrics for their online marketing. Your revenue goals are the foundation; they influence the key performance indicators that follow to ensure the internet marketing strategy produces a positive R.O.I.
Second, what is your visitor to lead ratio?
The visitor to lead ratio measures how many website visitors become an inbound lead. This is calculated by dividing the number of people that become leads by the number of website visitors. Let’s say that 100 people visit your website and of that 2 become leads. Then the visitor to lead ratio is 2% because 2/100 is 2%. The higher your visitor to lead ratio, the greater the efficiency your online marketing has in the process of guiding website visitors through the buying cycle.
Many websites are not optimize to obtain inbound leads. The conversion ratio is typically very low. This is why most websites do not produce a positive ROI. It’s only through the deliberate improvement of the visitor to lead ratio that a website is able to credit its website to qualified inbound leads that ultimately convert into paying customers.
The visitor to lead ratio improves with having premium content adjacent to information that prospects crave. There is a direct relationship between premium content/landing pages and inbound leads.
Third, what percentage of inbound leads become customers?
The lead to customer ratio determines how many leads become customers. It’s important to know this because it determines how many inbound leads you need to reach your revenue goal. It also indicates the sales team ability to close a deal. It also shows the quality of inbound leads.
This is calculated by dividing the number of customers by the number of inbound leads. For our example, let’s say there are 10 inbound leads. Of those 10 inbound leads, 2 become customers. The lead to customer ratio is 20%.
To improve the percentage that become customer, lead nurturing campaigns must systematically produce qualified sales leads. It’s important to be responsive to inbound leads; sales team members need to interact with inbound leads to determine the level of interest, as well as the stage in the buying cycle.
When the individual elements influencing this ratio improve, the system becomes at increasing the lead to customer ratio. Ultimately, each business needs a specific amount of inbound leads to reach its revenue goal. With greater efficiency, the company converts leads into sales with greater ease; this means that fewer sales leads are required to meet the same revenue goal.
Fourth, how much website traffic is needed to reach the revenue goal?
Website traffic is a simple metric that lets you know how many people are visiting your website. Whether or not you reach your internet marketing revenue goal depends on how much website traffic you have. How much website traffic does your business need? It depends. How much website traffic you’ll need depends on your revenue goal, visitor to lead ratio, and lead to customer ratio. There is an inverse relationship between conversion ratios and website traffic.
If your revenue goal is 100,000 in sales. For our hypothetical scenario, let’s say your visitor to lead rate is 3% and your lead to customer rate is 10%. You’d need 3,333 website visitors to have the necessary amount of inbound leads and closed business.
The amount of website traffic is greatly influenced by the visitor to lead ratio and lead to customer ratio. If the visitor to lead ratio were 6%, and the customer to lead ratio were 10%. You’d need 1,667 website visitors to reach the revenue goal.
Website traffic is a crucial step in realizing a revenue goal. The website traffic is the top of the online sales funnel. You can have the best conversion ratios, but without website traffic it is all for naught. It is important to know how much website traffic your website needs rather than to guesstimate. No two businesses are identical in internet marketing metrics.
If you craft an online marketing strategy that contains each of these vital website metrics, then you’ll be miles ahead your competition who pursues metrics without understanding the larger picture of connecting internet marketing with internet attributed sales.
To work smarter rather than work harder, the marketing strategy needs to focus on improving conversion ratios; it makes the system more efficient from the beginning. It will require less website traffic when your lead generation, lead management, and sales process are optimized to capture and close inbound sales leads.