If you want to maximize sales from online marketing, you need to understand purchase behavior.
It's always surprising when meeting an e-business manager for large national brands and hearing statements like: "We here in e-business only get credit for online sales, so we really don't care about telephone calls." Now, I understand that many organizations use departmental key performance indicators (KPIs) so that they measure the effectiveness of different sales channels, tactics, products, etc. But when it comes to maximizing sales from online marketing, understanding consumer purchase behavior and the fact that online and offline media work together is vitally important. Today's siloed approach to marketing channels only leads to suboptimal media valuation of plans and executions.
Just the Facts, Please
According to the U.S. Dept. of Commerce, online retail sales account for about 5 percent of total retail sales. That means 95 percent of retail sales happen offline. As we all know, online's influence is an important factor in offline sales. In fact, according to The Kelsey Group, 97 percent of Internet users in the U.S. gather shopping information online and 70 percent of online searchers will use local search to find offline businesses.
The Local Search Study done by my company and comScore also reveals local searchers are more likely to call or visit a business than contact and consummate a sales online.
General = Search Portals, Local = City Guides and Map Sites, IYP = Internet Yellow Pages
So with such a high percentage of consumers utilizing online information and then contacting offline, it stands to reason that a program that measures more than merely clicks would be in order.
Clicks Are Nice but Calls Are Better
Results vary widely by category, but we have seen sales conversions anywhere from 50 percent to 300 percent better for calls than clicks. This is purely logical; consumers who click tend to be gathering top-line information about product/services, where callers tend to be further down in the purchase funnel seeking more specific specifications, pricing, and availability.
Way back in 2007, I wrote about the value of measuring offline response in the form of call-tracking in "Real World Trumps Online in Local Search." Recently, I read a great piece on Search Engine Watch by Jonathan Allen; "Forget Clicks, Call-through Rate Could be New CTR Controlling Ad Position." These articles contain lots of great "how-to" tips, so I will not rehash that material here.
So the concept of using calls as a program metric is not a new concept, however, few SMBs and national brands employ this technique. One of the issues most often stated for not measuring calls is the concern that it is hard to know what percentage of the calls are for sales (high value) vs. customer service (lower value) vs. Frank's wife calling to make sure he picks up a gallon of milk on the way home (no value, unless you are Frank).
There are a couple of ways to help address this issue, two that we have used are:
Recent caller studies traditionally take the form of a follow-up phone call to the consumer to create a benchmark measure of call reason (e.g., sales, service, etc.). With today's call tracking, businesses receive the caller ID in their reporting. Simply call consumers and create a response model based on the results. Additionally, this is a time to also probe the folks that were calling for "sales," whether they purchased, and their reasons as to why or why not.
Call disposition reporting is relatively new, so check with your call-tracking provider to see if they have this feature available. Firms that utilize this feature record all conversations and then use a software algorithm to detect conversational keywords that signal caller intent. Again, armed with this information, the marketer can develop a model for valuing the differing call types and incorporate this information in their conversion analytics.
While neither of these techniques is perfect, not utilizing calls as a primary metric in local search leads to undervaluing sales from one of the largest response methods used by consumers.
Remember, if you can measure it, you can optimize it. Call-tracking is a requirement for every advertiser, large and small to begin to understand the true value of their local online efforts.
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Gregg Stewart is founder and president of 3rd Act Marketing, a full-service marketing agency and consultancy, specializing in digital solutions, headquartered in Connecticut. 3rd Act supports businesses and agencies of all sizes, including Fortune 500 companies. With more than 20 years experience, Stewart applies his successful tenured career in interactive advertising and local search to the ongoing development of digital and mobile solutions for his clients' online-marketing campaigns. Through his strategic counsel, national and local brands become better equipped to target and reach niche consumers for increased leads and sales. In addition to his ClickZ columns, additional columns can be found in the Search Engine Watch archive. In 2013, Stewart was recognized with the ClickZ Hall of Fame award.
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