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Measuring the bottom of the digital sales funnel
Video length: 3:26
Dave Harries: We’re talking about measuring the digital funnel and now we’re at the bottom of the funnel, which I guess is the important bit, the return on investment I suppose. How do you measure that?
Grant Leboff: Essentially what you’ve got is at the top of the funnel you’ve got these people you’re attracting in, and then the middle of the funnel you’re gathering these people that you’ve attracted in and what you’re trying to do is keep their attention. So you’re trying to engage them with value over whatever period of time you think is sensible and engage as many of them as you can so when they’re ready to buy you’re one of the people that they think about. You’re in the buying set, as it were.
The bottom of the funnel, it’s of the engaged people, how many people are actually buying? Who are we getting an ROI of? Then the thing to ask yourself is this, and this does very much depend on the services and products that you offer, but could we get some of those people to buy more? Could we get some of them buy with greater frequency? So, how do we increase, perhaps, the share of wallet that we get with some of those customers? Now, that won’t always be relevant, it depends what type of business you’re in, but that would be another measure. Essentially, of those middle people, how many people are actually buying?
Where it gets slightly more complicated is this. You might also ask yourself, of those people that are engaged in the middle, how many are regularly sharing content or recommending or referring us? You’d call them influencers within that community. In other words, those people are people that are maybe not directly buying from you, they may be too, but actually that you’re getting an ROI on that, their attention, because even if they’re not purchasing from you, if they’ve recommended you to five other people and three of them have bought, you’re getting an ROI on them as well.
The other thing to just be aware of is how many people come straight into the top of the funnel and go straight to the bottom and purchase? In other words, I’m looking for someone to create videos for me. I go online, I do a search, I see you, I have a conversation on the phone and I buy. In some ways they never got to the engaged bit, they went straight through to the end, but that’s okay too.
There are some nuances there, but essentially it’s of the people I have engaged, how many people are buying?
Dave Harries: Are there ratios that one should be aiming for in the world of digital selling? There are X thousand in the middle so, therefore, I should expect a fraction of X thousand to buy?
Grant Leboff: That’s a really good point. What I would say, rather unhelpfully is, depending on the market conditions, depending on the type of products or services that you sell, depending on the types of customers you have, the ratios are going to be so different, for me to use a figure would be meaningless. But helpfully, what I can answer is, all of this is about tests and measuring.
All the time, the great thing about digital is you can continually iterate and test and measure. If we tweet this, do we get more engagement or less engagement? If we tweet that do we get a higher level of purchase or a lower level of purchase? You should be constantly running those percentages of engagement, of purchasing, of all of these different things and trying to improve them and be aware of the numbers.
One of the fundamentals behind digital is it provides you with the analytics. Make sure you’re looking at the right analytics, because you can get overwhelmed with them, but look at what you’re getting from those and make sure that you are analyzing those and then iterating to improve.
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