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Pretend for a moment that you own a residential home and exterior remodeling company. You get a decent number of referral leads from current and previous customers, but you’d like to invest in a marketing campaign to generate more leads. Your goal would be to boost your growth-rate over the next few years and eventually have a business system that allows your company to run without you at the helm. The trouble is, six months ago, your best sales rep has quit. For several years, she had consistently converted roughly 35-40 percent of your referral leads into new business. Your new sales rep has been on board for a little over six months. You’ve trained him thoroughly, but he continues to convert a mere 5 percent of your referrals into new business.
Suppose now that you have two choices. Option A is to invest $25,000 in a 12-month online marketing campaign designed to generate more leads and appointments for your existing sales rep. Option B is to find, hire, and train a new sales rep that will hopefully have a more acceptable close rate, and then invest in more leads?
Assuming you had to choose one or the other, most sane business people would choose option b) find, hire, and train a new sales rep and get him/her to a close rate closer to your previous rep, and then invest in marketing to generate more leads. Most business people recognize that it makes no sense to pay money for leads if you’re sending them to a sales person that can’t close. So, why then do so few business owners follow a different set of rules when it comes to their websites? Why pay money to generate traffic if you’re sending that traffic to a website that doesn’t do an adequate job converting visitors into leads? Most of you reading this are probably saying, “I wouldn’t”, but the reality is that nearly all of you ARE. Some of you are making this mistake and you don’t even realize it!
Think for a moment… what percentage of your website visitors become leads?
The vast majority of people reading this blog can’t accurately answer this question. At Blue Corona, we’ve analyzed more than 100,000 websites. Based on the reports I’ve personally reviewed – which number in the thousands – I’d estimate that fewer than five percent of companies have in place the tools necessary to accurately track their site’s visit-to-lead conversion rate. So, while we all agree that it’s a complete waste of money to generate leads for a sales rep that can’t close, many of you don’t make the connection that your website is a sales rep and each visitor is like a lead. Business owners everywhere will invest thousands of dollars on traffic generation strategies like PPC and SEO without spending a penny to determine their website’s visit-to-lead conversion rate. That is absolute insanity! It makes zero sense.
It boggles my mind how few business owners operate without knowing one of the most important online marketing metrics available. And it’s not like it’s expensive or difficult to do.
In this two blog post series, I’m going to:
- Explain the importance of accurately tracking your visit-to-lead conversion rates
- Show you how to get started tracking this key metric and
- Show you how you can use Google Analytics to get more visitors to convert
Why Visit-to-Lead Conversion Rate Matters
Your website’s visit-to-lead conversion rate is one of the most versatile and important metrics in the online marketing universe. It is crucial for all sorts of marketing decisions – from how much to invest in various online marketing strategies like PPC and SEO to determining the effectiveness of traditional campaigns such as radio and TV advertising. You can’t intelligently answer a question like, ” should I spend more money on web traffic?” or “what’s the most I can afford to pay per click?” unless you know exactly what percentage of your web visitors turn into leads. This key metric can even be used to project how much revenue and profit your website will generate this month or this year.
To demonstrate the importance of visit-to-lead conversion rate, let’s walk through an example using a fairly common online marketing question:
What can you afford to pay per click? (said another way, what is the most you should be willing to pay for a click?)
In many industries, paid clicks on can cost as much as $40-50 each. Many business owners assume it’s not worth it. Why the same business owners are willing to spend thousands on radio and TV with no guarantee that anyone is actually listening to their commercial, but they think $40-50 to get someone searching a keyword related to their business is a rip off, is beyond me, but I digress. The truth is, you can’t begin to answer this question unless you know your numbers. One of those numbers is your visit-to-lead conversion rate. You need to know exactly what percentage of $30 clicks turn into leads. As an aside, to truly answer this question, you also have to know the percentage of leads you convert into sales and the average revenue and margin associated with a sale, but that’s a different blog post.
Let’s walk through an example scenario…
Suppose you own a roofing company and your bread and butter are $15,000 roof replacement jobs. If your gross margin (after sales commissions) is 30 percent, and you convert 20 percent of your leads into sales, can you afford to pay $30 to get a qualified visitor to your website? Although some of you might think you already know the answer, you really don’t… unless you know your visit-to-lead conversion rate. Whether $30 per click is a great deal or the rip-off of the century depends on whether your website converts 10 percent of visits into leads (10 percent visit-to-lead conversion rate) or 2 percent (as an example). If your site converts 10 percent of visitors into leads, at $30 per click, you’d be getting leads for $300 and sales for $1,500.
If this were your business, would you pay $1,500 for a new sale?
If you’re profitable, growth oriented, and you have the capacity, I sure hope you would! Your margin is 30 percent, so you’re pulling in $4,500 on each job. As a roofing business, were do most of your other jobs come from? Referrals and word of mouth! Each new job you do – if done well – has the potential to generate referrals, so it’s easily worth $1,500 of margin to acquire new jobs. If this fictitious roofing company were my business, and these were my numbers, I’d pay $30 per click all flippin’ day long! But what if your visit-to-lead conversion rate was actually 2 percent instead of 10 percent?
Is $30 per click still a good deal?
By my math, that’s $1,500 per lead and $7,500 per job! If I’m running a profitable roofing company, I’m interested in growth, and I have the capacity to do a lot more work, I can think of several scenarios where I might be willing to give up 100 percent of the gross margin to get a job. What I can’t do is think of any scenarios in which I’m willing to lose money (beyond the gross margin associated with the job) to acquire a new customer. With a visit-to-lead conversion rate of 10 percent (and the other numbers mentioned in our scenario), I’d pay $30 per click all day long, but if the visit-to-lead conversion rate was 2 percent, not 10, I’d head for the hills (SEO anyone?)!
How to Track Your Visit-to-Lead Conversion Rate
I hope, by this point, you understand how important it is to know exactly what percentage of your website visitors become leads. So, let’s shift gears and I’ll walk you through the tools you need to accurately track and monitor this key metric. If you’re like most businesses, you get leads from your website in one of two ways. You get web contact form submissions (or emails from your website) and/or you get phone calls from people visiting your site.
So, to accurately track your website’s visit-to-lead conversion rate, you need two tools:
- 1. Website analytics software that can be customized to track web form submissions
- 2. Call tracking software with dynamic number replacement technology
Using Website Analytics to Track Conversion Rates
If you do nothing else after reading this blog post, you should at least make sure that you have website analytics software in place and properly configured. You need to customize your website analytics software to track web form submissions. The most common solution would be to install Google Analytics. Google Analytics is free, reliable, and infinitely customizable. W3techs.com performed a survey and found that 57.1 percent of all websites are using Google Analytics. An alternative to Google Analytics is to use a paid website analytics platform like Blue Corona offers. There are a number of advantages our platform offers over Google Analytics (again, this is a topic for another blog post).
So, you need to customize your website analytics software to track web form submissions. You should also configure it to remove internal traffic (visits to your site from you and your employees). It’s amazing how many businesses using tools like Google Analytics, overlook this simple yet important step. The next thing you should do is set up conversion tracking or goal tracking so that your website analytics software tracks each web form submission you receive. There are a number of ways you can do this, but the most common is to send visitors that submit a website contact form to a unique thank you page (so each website contact form has its own unique “thank you” page). When you have unique thank you pages following each website contact form, you can go into Google Analytics and enable goal tracking so that Google Analytics recognizes that one of your web visitors has completed and submitted web form one whenever someone reaches “thank-you-page-1.”
With goal tracking enabled in Google Analytics, instead of seeing this:
You will see this:
Hopefully, based on the screenshots above, you can see how better (more granular) data enables better decisions – the net output being better results. Most of you reading this already have Google Analytics installed on your website (many of you may have it and not even know it – talk to your web guy). And with a few customizations, Google Analytics can be configured to track your web contact form submissions – one key part of your visit-to-lead conversion rate.
However, Google Analytics alone is not enough.
Why You Need Call Tracking
A handful of businesses receive virtually all of their inquiries via email; however, a far greater percentage of companies receive leads via web contact forms AND phone calls. At Blue Corona we specialize in helping home services companies – contractors, hvac companies, plumbers, remodelers, roofers, etc. – accurately track their advertising and marketing as well as generate more leads and sales from the web. The typical home service company gets 4-7 times as many phone leads as they do online or email leads (web contact forms). Read that again.
If you’re a contractor, plumber, remodeler, etc. and you’re only tracking web contact forms in Google Analytics, you’re missing more than half the picture! Remember our scenario above – is $30 per click worth it? There’s no way on earth you’d be able to make the right decision without also having in place a system to accurately track the phone leads generated from your website. I know what some of you are saying right now – you already track the phone leads you get from the web by having your customer service people ask each caller how they found you. When they say, “the internet” or “your website”, you mark it down on a sheet and tally up the responses at the end of each week.
There are two problems with this approach. First, it’s incredibly inaccurate. I’ll bet less than 10 percent of you using this method actually collect sheets from your people, verify that they’re completed, and total them up each month. Second, the level of data you’re getting when you survey customers is vague – at best. Again, better, more granular data, allows you to make better decisions.
For example, it’s great to know that phone calls from “the internet” are on the rise. If you had this data, you could use it to invest more in “the internet.” Wait… how do you invest more money in “the internet?” See the problem – junk in, junk out. Some business owners assume investing more in “the internet” means re-building their website. Re-building your website, without proper data, is a great way spend a lot of money and get zero return for it. At least half of the small businesses that build new websites lose a significant portion of their organic rankings in the process. That’s like replacing a car that runs great with one that looks awesome, but can’t make it out of the driveway. Other business owners interpret invest more in “the internet” as throwing small investments at every internet marketing strategy that comes there way – building a Facebook page, listing their site on directories, doing some PPC advertising, and maybe a bit of SEO. This is an enormous mistake.
What you really want to do is determine exactly which parts of the internet are responsible for making your phone ring and then TEST strategies directly related to those to see if you can generate even better results.
Take a look at this graph:
By tracking phone inquiries down to the exact traffic source (you can even track things back to the keyword if you choose), you can make much more specific decisions. For example, if the phone calls seen in the screenshot above were my phone calls, I’d invest more in SEO to see if I could increase the number of calls and leads I receive from Google Organic Search. That would be an interesting test, don’t you think??
Take a look at what happened when the company seen in this screen shot did just that:
Seeing exactly which sources of website traffic make your phone ring, generate the most leads, and result in the most/best sales, enables you to optimize your marketing investments in way that’s just not possible using basic phone surveys. In order to track things this way, you need a call tracking platform that offers dynamic number replacement. Dynamic number replacement makes it possible to differentiate phone calls and leads from different web traffic sources, so you can see how many calls/leads you received from Google PPC vs. Google Organic Search.
Being able to attribute different phone calls and leads back to their original traffic source also allows you to track your visit-to-lead conversion rates by traffic source as well as for your website as a whole. This is important because some some traffic sources convert at a much higher rate than others. If your overall website’s visit-to-lead conversion rate is 10 percent, you might (mistakenly) assume that 10 percent of all your PPC visits also convert around 10 percent. The reality is your PPC visit-to-lead conversion rate might be much lower or much higher.
If you want to get more business from your website, you’ve got to know exactly how many of your website visitors become leads and sales. Failing to accurately track your website leaves open the (strong) possibility that you’re spending money to send qualified visitors to a website that doesn’t effectively convert them into leads. That’s like paying money to send leads to a sales rep that can’t close. It makes no sense. Your website’s visit-to-lead conversion rate is one of the most important online marketing metrics available, and virtually no one is accurately tracking it. Savvy business owners can get an enormous leg up on the competition by accurately tracking this number, making smarter marketing decisions based on it, and putting in place plans to continually monitor it and improve it. However, the window of opportunity is rapidly closing!
If you want to accurately track the number of website visitors that convert into leads, you need to two things – a properly setup and configured website analytics platform such as Google Analytics, and a call tracking service with dynamic number replacement like that offered by Blue Corona. In the second part of this blog series, I’ll walk you through how you can use tools like Google Analytics to improve your site’s conversion rate.
If you’d like help properly setting up Google Analytics, you want to learn more about Blue Corona Call Tracking, or you want to learn more about how Blue Corona can help you accurately track your website, drop us a line – 800-696-4690!
About The Author: Ben Landers is the President and CEO of Blue Corona, a data-driven, inbound internet marketing company. Submit an inquiry to book Ben to speak at your next conference or event.
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