In Part 3 of our Closed Loop series, we discussed approaches that will refine your marketing investment in media channels by buying at a consumer level vs. a site/channel level with a constant balance of scale, quality and ROI.
And throughout our closed loop discussions, we’ve talked about the need to move beyond a single touch point or metric when evaluating success, with the need to look at success metrics that are aligned to bottom line results. This is where your level of measurement and analysis really comes into play. Measuring clicks, leads, and orders are great performance indicators, but it’s metrics like cost-to-acquire and ROI that really provide the insight to drive business growth.
The simplified chart below is meant to dimension the depth of analysis needed to truly evaluate a campaign. In this seven-cell test, you will see the different stages that a consumer went through from initial engagement (traffic) through the “sale” (customers). But what is also contemplated is the LTV (lifetime value) associated with the customers in each cell. This gets us closer to a predicted value for the campaign, where one would conclude that Landing Page F was the winner. But this does not take into account the cost of the campaign. By applying ROI measures, you can see that Landing Page G is actually the winning cell from a fully balanced view. If we purely looked at front-end metrics, such as conversion rates or close rates, we would potentially be making the wrong decisions for the business.
But we don’t want to be too myopic in a pure ROI focus. There are pockets of opportunity that exist in most of these cells that can be mined using the balanced framework of volume, quality (LTV in this case) and ROI. As we’ve previously discussed, moving too far in each of these metrics is not a good long-term strategy. Treating these learnings like a portfolio with appropriate weights assigned to the framework based on your objective will put your business on the road to continued success.
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So closes our discussion on the closed loop. In our next series, we will focus on mobile, truly the fastest growing segment within digital marketing. As you would expect, many of the foundational closed loop insights will apply, but mobile has unique needs and opportunities given the nature of the devices and consumer usage.
Have a question on the closed loop that we didn’t cover? Aspects of mobile that you’d like to see us discuss? Get in touch and let us know your thoughts so we can make the discussions relevant to the community!
