What does Engineering have to do with successful marketing? Not much… it’s actually about REVERSE-Engineering…
The most logical and effective way many business owners and marketers have found to set goals and measure success is to start with the end. Your business goal.
Using Key Performance Indicators (KPIs) from your past marketing campaigns, or if not available using industry averages, you backtrack from your business goal step by step to find the target variables of your marketing campaign: number of clients required, leads, prospects and ad impressions to hit your ultimate goal.
To schedule your campaigns, break up your yearly results into the number of campaigns you want to run: daily, weekly, monthly, quarterly…This will break up your roadmap into short term chunks or milestones to reach your ultimate goal. Sounds like chinese? OK, here’s an example.
Meet Dave. Dave wants to add $250,000 in revenue to his practice over the next 12 months. What marketing goals should he set for each campaign, in terms of new leads and signed clients, to realistically reach his yearly goals?
Knowing your numbers
Dave knows that, on average, a new client generates $1500 in revenue per year for his business. He also knows that using Marketing Strategy “A” he typically gets a 5% ad to website “click-through-rate” (CTR) at an average cost per click of $2.35 (“CPC”) and a 15% opt-in rate to download his whitepaper/free guide/free offer. His automatic lead nurturing information sequence converts 25% into clients who sign-up to his services.
So how many target prospects have to see David’s ad so he can meet his yearly goal?
Let’s do the math…. in reverse.
250,000 / 1,500 = 166.67 – rounded up to 167 new clients required to reach Dave’s goal
167 / 25% = 668 people receiving his lead nurturing sequence after opting in to his email list.
668 / 15% = 4453.33 rounded up to 4454 prospects visiting his website through the ad campaign.
4454 / 5% = 89,080 ad impressions required to generate 167 clients over 12 months generating $250,000 in additional revenue.
OK, but how does Dave know how to set his monthly marketing goals and budget?
All things being equal, one would divide 89,080 impressions into 12 monthly 7423.33 or 7424 ad impressions.
Dave is using Facebook Pay Per Click Ads, so he mostly cares about click-throughs to his webpage to budget. However, he needs to know the number of impressions he has to target in order to set the reach of his campaign to a large enough target audience.
Still sounding like chinese?
Ok, in plain English: Dave knows that his 4454 / 12 = 371.66 or 372 monthly website visitors should cost him around $930, but that he needs to configure his campaign so it reaches at least 89,080 / 12 = 7423.33 or 7424 ad impressions / people seeing his ad, every month. In other words he plays with the different audience targeting parameters inside his Facebook campaign to reach a large enough target audience.
Dave now has a realistic roadmap to success, knowing that by budgeting $930 per month for his marketing strategy A he has a fair chance of reaching his business goal of adding $250,000 in revenue to his practice in 12 months.
Want to know how Dave can easily improve his results?
That’s a topic for another post on testing, measuring and increasing marketing results.
I am curious as to how you set your marketing roadmap. Leave us a comment below to let us know.