True Conversion and Return on Investment BS (ROIBS!)
Published July 27, 2009 by Garry Przyklenk Analytics Tools, Landing Pages, PPC Basics
One of the hardest tasks online marketers and web analysts face on a daily basis is proving true returns on marketing efforts, or even the opportunity costs or labor. You may have a definitive set of criteria handed down by managerial or executive teams such as orders or return on ad spend (ROAS), but finding and reporting on those conversion points can be difficult. What about businesses that don’t rely on conversions that occur online? Better yet, do you have a vendor or partner that assures you the numbers are great even though accounting is ready to pull the plug? What are the true conversion numbers?
True Conversion/True ROI
Whatever is it that you define to be a conversion on your site, whether it’s actual sales, orders, leads, newsletter opt-in, RSS subscriptions, twitter followers, friending, favoriting (not technically a word, but oh well), sharing, calling into your office, donating via PayPal, buying advertising – whatever it is, you’re going to have to marry your analytics or pay-per-click information with business systems (that your accounting department uses).
(In my best Jeremy Clarkson voice…) Some say accounting departments are dark, secluded dens of punishment and strict rules. The keepers of the books are often recluse and unforgiving, with dark beady eyes, whispery voices and monocles. Preferring damp, humid spaces, accountants and clerks prefer contact via e-mail and ample paper trails, carbon copied to managers and cross-checked numerous times before consideration. (God, I love Top Gear)
Yeah, it can be tough trying to merge online numbers with offline conversions and real costs, but someone has to determine the quality of conversions. After all, marketers have to be responsible (on the harsh side) if not cognizant (on the easy-going side) of many factors including:
- Fraudsters that actually go through checkouts, pay with stolen credentials and inflate conversion metrics.
- Competitors that go through conversion funnels, learn from your tactics and always abandon their carts.
- Researchers that can be found completing micro-conversions but take decades to actually act and purchase (nothing you can do really, we all have friends like that, right?)
- Random ridiculousness such as tabbed, secure, or parallel browsing that totally messes with your analytics and campaign attribution, thanks a lot CHROME…
- Labor costs in call-centers, customer service, and commission structures that may alter ROI of discounted products or services after the online conversion.
- Charge-back costs, refunds, returns, or exchanges all have post-sale costs attributed to them and can eventually be tracked back to campaigns.
- Vendors and partners that like to dizzy and confuse you with soft conversion metrics, claiming ROI. I.e. ROIBS (more on that later)
The moral of this story is, be nice to your accounts people. In the end, they’re the ones signing the checks that pay your salary/bill. As is often the case, you may not have to reconcile numbers very often, establish a baseline, reconcile every few months, make sure your ratio of analytics ROI is within known parameters and adjust if needed. Simple.
Calling R.O.I.B.S™
Ah yes, the ever-popular return on investment bull sh*t!
If you’ve ever had anyone trying to explain success in terms of “branding efforts” or claiming that they saw a seemingly random lift in metrics somewhere totally unrelated on your site, you can call them on ROIBS!
As marketers we’ve all done it on more than a few occasions, pimping the numbers to make us look better after epic failures. After all, we’re good at selling people on ideas or concepts that we create, that’s what marketing is. But when you have no hard evidence or scrap of even a pathetic morsel of truth in your story, don’t expect to get away without being called out. This goes for in-house and agency folks. Don’t contribute to ROIBS/Call out ROIBS!
Avinash Kaushik says it best: “the internet lets you fail faster”. Thanks dude, I owe you.
Letting campaigns fail for extended periods of time is your fault. You can learn a lot very quickly, and if you’re not learning how to succeed, you need to ask more questions of your analytics software, site visitors, customers, and folks within your organization. Ask questions until you’re satisfied.
Don’t become complacent either, because small increases in conversion often yield big results in revenue, retention, brand awareness, etc. Plus, you never know whether your increase of 1% in conversion was good or not, compared to your competitor who may have seen 0.5% or 3% increases. Put success stories in perspective.
Three very simple rules to live by:
- Don’t contribute to ROIBS (in-house). Call it out when you hear it (agency).
- Ask questions until you’re satisfied.
- Put success stories in perspective.
A short mention about this site. Personally, I don’t make any real money on this site, so if you like this article, please consider sharing, subscribing via RSS, retweeting, or giving me a nod using social media buttons. Those are my conversions.
Tags: micro conversions, roas, ROI bullshit, top gear, true conversion
