[Please excuse any typing errors. This is a direct transcription.]
How to measure marketing effectiveness? Ummmm…marketing and measurement; two subjects that often don’t go together; do they?
Marketing is about creating a demand for your product or service and the challenge is that many elements can be intangible and not always a direct relationship to the input.
For example, you are creating blog posts that your clients like. You are all over social media and they have been opening your emails. Then when you sponsored a local event they appeared and finally agreed to a conversation.
So what piece of the marketing you deployed worked; I suspect a combination of it all.
Though the good news is in today’s market we can measure several key areas that at least give us a sporting chance of knowing if our marketing spend and activities are worth it.
Before we do anything else it’s good to know how much a client/candidate is worth to us.
In the unique world of recruitment marketing we have several interesting scenarios. You have two types of ‘customer’ both of which have a value; that’s clients and candidates. The easiest to work with for now is your client.
Let’s say your ideal client is a company that has a certain turnover and is in a growth sector. Your analysis will have given you some idea of the potential of that account.
We talk a lot about ideal clients and messaging here at Superfast Recruitment. Let’s assume you know who your ideal client might be.
Your historical data reveals that ACME construction had made 21 placements with you over the past 3 years and each placement is worth approximately £6k.
Therefore, the life time value of that customer/client (CLV) is easy to calculate.
Now this figure is based on how long they stay with you; hence the lifetime data.
21clients x £6k = £126k over a three-year period.
What if this level of recruiting maintained over the next two years? This figure now changes as follows.
Assuming an average of 7 placements a year these numbers are as follows.
35 x £6k fee= £210k.
What if you improved your service delivery and focused on client retention and upselling across the organisation; the £210k we quoted could increase….
Therefore, clients like ACME would be ideal for targeting if you want consistent revenue. Therefore knowing your numbers what would you be willing to spend to bring on more clients like ACME?
Knowing your client/customer value like this is the starting point of planning your marketing investment.
Customer/Client Acquisition Cost
If you are aware that a customer similar to ACME could bring you in revenues in excess of £200k it would be worth investing in marketing that could bring more of them to your company.
To make it easier to calculate lets look at a campaign and relate the cost to this; rather than factoring in your consultant’s salary etc.
How To Measure The Success Of A Marketing Plan
The question is how to measure the success of a marketing plan? This is where a marketing and sales funnel delivers value.
[IMPORTANT: Aquire customers for less than the cost of the service they buy from you over their customer lifetime and it’s happy days.]
Your funnel will be designed in such a way that your potential clients or candidates, go through your funnel (many interactions being automated) and then a percentage of these convert.
We have talked about the buyer’s cycle before and the fact that only a small percentage of people are ready to buy straight away (typically 3-5%) therefore consider this with your numbers.
Let me give you an example.
You have decided to target a particular sector and are running a paid advert on linkedin.
Your offer is a white paper related to a problem your client has that you can provide a solution for. Then all the website visitors need to do is give you their name and email to get the report.
Not everyone who land on the page with your offer says yes. Lets say it’s 20%.
Each offer differs (asdoes the sector) so for ease of calculation lets assume every one in five people who click through to your page give you their name and email address
Each click costs you £3 therefore an email lead has cost you £15. Assuming you continue to run this advert and end up with 100 email leads; the advertising spend so far has cost you £1500.
You then go on to use a particular nurture campaign that includes emails and phone calls.
Let’s assume a ‘worse’ case scenario that you only manage to convert 3% of this group and they produce half the value of ACME; I’d guess you would be pretty happy?
To summarize lets assume you paid to have the whitepaper and emails created and the funnel developed for you and the total cost including adds was around £6k; the funnel and content of course could be used over and over again.
Let’s Look At The Revenue You Have Created
Assuming we convert 3 clients ( our experience is that over six months this figure will treble as a minimum) each delivering fifty percent (50%) of what ACME does.
Therefore 3 clients x £105k= £315k
Your spend was £6k.
This is how marketing funnels work and why now they are the ‘must use’ strategy for recruiters.
What next ?
Would you like help in designing a funnel like this that delivers? We can help. Email us here and lets set up a call.