The cost per lead (CPL) is calculated simply: advertising costs are divided by the number of requests received.
Pro : Compared to traffic tracking, this is a closer indicator of potential profit.
Cons:
1) You may receive calls from interested but insolvent users. They will ask questions, clarify, and try to negotiate unfavorable conditions for you. However, the corresponding leads will most likely be counted by the agency.
2) You may also be contacted by users who have been inadvertently misled. For example, you sell automatic transmissions for foreign cars. A person who needs an automatic transmission for a Ford Mondeo orders a call from you. But there are no such transmissions in stock.
3) There remains the possibility of disputes between the agency and the Customer about the quality of the applications actually received. Perhaps the agency is not bringing in "warm" leads. Or perhaps the sales managers on the Customer's side are not working effectively.
4. Sales
Quality advertising is that which brings in sales. Whether an agency is ready to build reporting before sales is a measure of its self-confidence.
In this case, the following indicators are used to determine the effectiveness of marketing:
Average Order Value (AOV) is the average cost of one-time purchases made by customers.
Cost Per Order (CPO) is the advertising costs required for a user to place an order.
Plus: for many businesses, this is the optimal KPI, especially for expensive goods that are purchased rarely.
Cons:
1) Imagine: a user ordered a package of premium soap for 500 rubles from an online cosmetics store. About the same amount was spent on attracting the customer as was earned from him. At first glance, the advertising worked "at zero". However, the customer liked the cosmetics and the speed of its delivery. Therefore, he ordered it monthly for 3 years. As a result, he brought the online store revenue of 18,000 rubles.
The cost of the order turned out to be unreasonably high, but the client turned out to be profitable in the long term.
Or, on the contrary: the customer ordered the product for very little money. However, he was misled by the advertising, that is, he expected more than the company could offer him. The customer was dissatisfied. He never contacted this company again and spread negative reviews about it on the Internet. Several potential customers were confused by the negativity about the company and preferred to contact competitors.
The cost of the order was low, but the business suffered as a result.
5. Repeat sales
According to research, upselling to an existing customer is 3-7 times cheaper than attracting a new buyer. Companies that follow this principle and develop their business in the long term cannot limit themselves to the above KPIs.
Therefore, they also use such indicators in their work as:
ROMI - return on investment in marketing.
LTV - customer lifetime value.
ROMI can be calculated based on the previous uk whatsapp numbers sales level. It will just be more accurate if you take repeat sales into account.
LTV is impossible to use at all without organized work in the long term. You must analyze your marketing not only at the level of days, weeks and months, but also in terms of quarters and years. This is the level of true professionalism.
, it is necessary to take into account most of the indicators listed in this article. Only they will not be perceived as final KPIs, but as synthetic, intermediate indicators. After all, each of them determines the success of passing only a certain stage of the sales funnel, therefore it is related to profit only indirectly.
Plus: the combined control of the listed indicators allows to reach the most profitable KPI for the Customer, the net profit that he receives thanks to the efforts of advertisers. This gives the clearest possible understanding of how effective marketing is.
An example of our report - the client sees that:
1) he spent 185,330 rubles and 37 kopecks on marketing;
2) he earned 1,709,007 rubles thanks to our agency.
This is a tangible advantage. Imagine: two companies are competing. The first advertises the old-fashioned way, blindly. The second has pre-sales reporting. The budget is about the same.