Launching a digital marketing strategy doesn’t happen overnight. In fact, if you think you’ll be able to see returns in a month, your projections will be all wrong and a lot of things you should be doing (but aren’t) will end up looking like failures.
For example, my team recently encouraged a major client to increase its Facebook ad budget. We understand the purchase cycle and cost per lead, and have been seeing incredible results using Facebook to attract our clients’ target audiences online.5
Unfortunately, the client preferred a “wait-and-see” approach and ultimately turned off certain ads after just two weeks. Two months later, when it became clear that those ads had ended up outperforming all of the client’s other advertising, it was too late: The brand had missed its window of opportunity.
Please avoid these mistakes and use the following tips to determine how often your customers actually purchase your product or service. This allows you to better allocate time and money to your digital marketing strategies.
Measure how long a purchase actually takes…
Many entrepreneurs aren’t aware of the importance of purchase cycles. For example, If your product costs $80 your purchase cycle will likely be more than a month long. This means you won’t see most of the money you’ll make until after that time frame.
To better appreciate how long it takes for a good ad to perform, monitor how long it takes for someone to make a purchase, starting from the first time they visit your website. With our Facebook ads we find that it typically takes two to four months to actually see a trend in results.
The longer the purchase cycle, the more money you’ll need on the front end, so understanding this time line will help you estimate your cash needs up-front.
Put a price on your leads…
If you are expecting direct responses from your digital marketing, you won’t be able to scale properly. To help you evaluate which strategies to pursue, you should first understand how much each lead is truly worth. Try this CPA calculator tool if you need assistance.
If you are really focused on converting your site’s visitors into paying customers, and let’s say each one is worth $100 to you. It would be more lucrative to go after $10 email addresses, which have more direct response, quicker conversions and lower costs per lead. If so, you’ll likely want to optimize your efforts based on that strategy rather than on smaller-focus conversions.
Redefine how you measure success…
Once you understand how purchase cycles fit into your customer’s journey toward buying your product or service, you may have to start monitoring and measuring success differently. You can calculate the half-life to measure success, as opposed to thinking, “I just spent $500. Why didn’t I sell $500 in products today?”
For example, if you know your purchase cycle averages 30 days, and you’ve made half of your money back after 30 days, you’re on track. You will also want to take note of including click-through and bounce rates, quality scores and time on site.
By working to understand purchase cycles and how they fit into your marketing time line, you’ll set your business up for success in the long run. The effort takes patience and a lot of commitment, but the waiting game will be well worth it.
Thank you for your attention!