We are constantly talking about how a modern consumer is changing marketing, but the marketing goal has always been the same – sending a message to the target consumer. Only the way we communicate with our target audience and the speed with which we can reach them is changed.
For an easier explanation of the marketing funnel we will use an example – software for automatic creation of invoices, the price of which is 100 euros.
Income: How many products should we sell at a price of 100 euros (per product) to reach our goal?
Our goal is 5000 Euros in sales.
Average order quantity: We only sell one product, but how many pieces does an average buyer buy?
From historical data we can find that on average, each client buys 1.6 products each order or the average order is 160 euros.
Orders: How many orders do we need to reach our goal?
If on average we have 1.6 products for each order, in order to reach 5000 euros in sales, we need 32 orders.
Conversion rate: The percentage of unique visitors to the website that are “turning” into customers.
From the historical data we know that the conversion is 2.1%, which means that from 1000 visits on our website we will have 21 orders, on average 160 euros from the order.
Visits to the website: Number of visitors on our website.
In order to achieve the target of 5000 Euros per month on sale at an average order of 160 euros and a conversion of 2.1%, we need 1488 visitors on the website every month.
Click through rate (CTR): What percentage of those who saw the link opened?
From historical data, our CTR is 0.91%, if we consider all channels (email, blog, paid social media ads).
Total reach: How many individuals should see our content (banner, email, blog, social media) in order to reach the goal for visitors on our website, taking into account the CTR.
Because our CTR is 0.91%, in order to reach the target of 1488 site visitors we will need to reach 16,356 potential customers with our macreting activities.
Budget: How much money will we need to achieve our goal?
To get an average cost-per-click on Google, Facebook, Twitter, etc., and cost 0.9 euros per click (CPC), we would need a total of 1399 euros (1488 * 0.9) to reach our monthly goal, and the return on investment (ROI) will be 273% (5000/1399) -1 = 2.73%.
“If you do not measure, you will not be able to improve” – that’s why all marketers should know well what were the previous campaigns, that is, whether this time is better or worse. Why is it better or worse? What can change in the future?