In the first blog of this series, we talked about how most online marketers assume that if they’re making a steady income that they’re succeeding with their online marketing. They measure success by measuring whether there’s more money coming in than there is going out. If your goal is simply to make more money than what you’re spending and to stay in business right now, then maybe the “income must be higher than outgo” is a good way to measure success.
But if you want to be in business for five or ten years, or longer, and if you want to make sure that you won’t go out of business if the economy takes a hit or if you experience a lag in sales, you need more ways to measure success. In the first blog of this series we talked about “future banking,” and how it’s necessary for creating sustainable business growth. In this blog, we’re introducing the second method for measuring the success of your marketing campaigns.
Method #2: Social Banking
“Social Banking” is determining how much social proof you’ve created through your marketing campaigns by keeping track of your review rate. While it’s hard to quantify the value of an authentic customer review, I don’t think anyone can doubt that customer reviews, especially those which are published online, can increase your conversion rates, attract more “trust matured” customers and encourage your new customers to spend more money. The more reviews you have, the more effective your marketing dollars become and the more money your company will make.
Let’s look at a simple selling situation as most marketers would look at it, then I’ll show you how to look at it from a social banking perspective.
The Casual Marketing Perspective
Let’s assume that you run a campaign which costs you $500. Three new customers each buy a product which is worth $250 in response to the campaign. So you’ve got $750 in income and after deducting your $500 investment, you’ve got $250 in profits. Assuming that each product requires $75 to create and to deliver, you’re now down to a measly $25 in profits.
Most marketers would consider this a pretty disappointing result and would be unlikely to keep working on the campaign. However, let’s assume that you’ve developed a method for soliciting positive customer reviews and posting them online and/or on your website, your landing pages, your direct mailers and other ads.
The Social Banking Perspective
If you run the same campaign again, this time with the added customer review, and make five new sales, that review increased your conversion rate by 66% and your profits by $350…and that’s just the first time running the campaign with one added review. Imagine running the campaign again and again and getting similar results every time. How much is that one customer review worth over the span of its lifetime? How much more effective can you make that campaign, and others, by earning more reviews and building up your social proof bank?
Of course, there will come a time when adding new reviews doesn’t increase your conversion rate that much. But it would be a mistake to measure the success of a new marketing campaign simply based on the money it earned. Even if the profits were negative or if you were to break even the first time, if you created a strategy for building up your social proof, you could leverage a handful of customer sales to make many more sales in the future.
Social Banking vs Money Banking
Are you starting to see how future banking and social banking methods can be used to measure the effectiveness of your marketing campaigns? Many online marketers get so caught up in measuring conversions that they never consider the opportunities they’re missing for building up their future bank and their social proof. All you have to start doing is paying attention to these two factors and how they increase the future impact of your marketing campaigns.
As you can see, there’s more than one way to determine how successful your online marketing strategies are, but wait until you see the next method. Check out the final blog in this series to discover one of the most powerful methods for measuring the success of your marketing campaigns...