Are You Using the Right Traffic Source?
Here’s a pop quiz…
Which is the best traffic source for generating new leads for your business?
A. Direct mail
D. Online marketing
Tough question isn’t it? There’s a lot of conflicting information in the industry and choosing the best traffic source for your business can be frustrating.
The “simple” answer, in short, is wherever prospects are congregating. Wherever they are giving their attention. Depending on who your ideal prospects are, the answer of where to invest your marketing budget will vary. To get the marketing results you’re looking for, you’ve got to answer the question for your unique business, and in today’s post, I want to share some thoughts to help you as you evaluate your options.
Let’s start by looking at the strengths and weaknesses of various traffic sources…
Old School Traffic Sources
Many old school traffic sources used to “own the eyeballs”. Take music, for example; it used to be that your music source was the FM dial. When it came to television, you tuned into the major networks and sat through one boring commercial after another. You paged through magazines and newspapers. You actually opened the mail in your mailbox.
These sources – radio, TV, print ads and direct mail – are still here, and for some, they may still serve as a large part of your marketing plan. But they are not the giants they used to be. If you’re getting poor results, it may have less to do with market saturation (or whatever else you might pin it on), and more to do with a new set of customer expectations.
- Radio. It used to be that you’d run an ad on the radio, and leads would flood in. But these days, when you want to listen to music, do you tune into the FM dial, or do you stream music online, ad-free? With services like Pandora and Apple Music, many have left the ad sponsored stations in the past.
- TV. If you’re anything like me, you most likely record all of your favorite shows now and then fast-forward every single commercial!
- Print Advertising. How many of us read physical, printed publications? Just about everything we read now (including this blog) is online, easily consumable through your smart devices.
- Direct Mail. Be honest. Do you “sort” your mail while standing over the trash can? Most prospects are doing the same. Let’s be honest, what percentage of what you need comes in your mailbox? With online billing, emailed statements, etc., very little has to be physically mailed to you anymore.
New School Traffic Sources
Now, let’s talk about some “New School” traffic sources. Some of these you’ve probably heard of before; others may be new to you. All of them, however, are almost certain to help you reach a larger audience and for less than the old school sources we talked about above.
- Pay Per Click (PPC). This form of paid advertising targets prospects searching for your unique service online. Let’s say they type in a search term relevant to what you do, if you’re using PPC, they will see your ad pop up. If they click on it, you pay for that click; if they don’t, the advertisement costs you nothing.
- Search Engine Optimization (SEO). Similar to the above, when people search for something related to what you offer, your website can show up among the first few search results in the “organic” listings. While clicks to your site are “free” the cost with SEO is in creating enough relevant content on your site that the search engines like Google will give you the top spot.
- Organic and Paid Social Media.
“I thought Social Media was Social Media. What’s the difference between Paid and Organic?”
On previous video blogs, I’ve talked about the difference between organic social media (fan pages, posting comments and pictures, updating your profile with content, etc.) and paid social media, which functions more like traditional advertising, but on a social platform. The main difference is that with organic the focus is more on building your following and then pushing relevant content and offers to that group. This is a labor-intensive strategy that can take some time to produce results.
Paid Social, by contrast, is where you pay the social network to display static ads to your ideal target market. These ads lead to your landing pages when clicked by prospects. The benefit here is the network can help you quickly identify who to show your ads to and provide real-time data to help you see which ads are performing well and which aren’t.
Four Metrics for Choosing the Right Traffic Source
Which traffic source will produce the greatest results for you? That’s the key question.
Here are four metrics you can use to help you analyze various traffic sources and determine which is the best one for you.
- Is the Traffic Source Impression-Based or Conversion-Based?
Radio, as an example, is an impression-based medium. You pay for every airing of your ad, and the price is calculated on the size of the listenership. Direct mail is much the same way; you pay per “impression” or the number of mail pieces sent. The problem with impression-based marketing is that the risk you assume is high. If your campaign generates a lot of leads, great! But if not, you suffer the loss. With conversion-based marketing, however, such as pay-per-click, you pay only for the ads that are clicked and get results!
- Lead Volume:
When choosing a traffic source expected lead volume is another large factor to consider. For example, you may have a low-cost traffic source; and you may even get some really high-quality leads from it, but if the volume isn’t there to support your growing business, you quickly find yourself floundering. This is often the case when trying to build your business on referrals. As great as they are, most advisors do not receive enough of them to live on referrals alone.
- Lead Quality:
Another important consideration is the buying temperature and quality of the leads your traffic sources are generating. This is often a function of the targeting options that a given traffic platform makes available. For example, with direct mail you can determine, income, asset level, etc., and the more targeting criteria, the better you can ensure the quality of the leads you’ll generate. It’s important that when comparing traffic sources, you cannot rely on “cost per lead” alone, but must also consider the volume and quality of the leads. As you’d expect, the higher quality the lead, and the closer they are to making a decision, the more you should expect to pay. If you’re paying more however for low-quality, then it’s time to find a new traffic source.
- Cost Per Lead?
Many of us I know, judge traffic sources and marketing campaigns by the total cost of the campaign. The problem with that, however, is it doesn’t take into consideration the end result, the number of leads you generated and the individual cost per each lead. If you look at what you pay for a given traffic source and do some simple division, you can easily determine your cost per lead across all of your campaigns.
If you were to spend $5,000 on a direct mail campaign and generated 50 leads. As a result, your cost per lead is $100.
By contrast, if you were to run a newspaper insert for $7,000 and generate 90 leads while the newspaper ad at first glance is much more expensive, your individual cost per lead is $77, almost 3/4’s the cost of the direct mail campaign! With this information, you can know make more informed decisions.
At Automated Advisor, we’ve created a Traffic Assessment Grid to help your evaluation of the various traffic sources you’re using and or considering based on the above four metrics. Click below to download and print it off.
Most of us have used direct mail at some point. So let’s start there and run a hypothetical campaign through the four key metrics.
- Direct mail as we all know is impression-based. Does that make it horrible? No, not by itself, but certainly strike one. Remember, the source with the least amount of risk is conversion based, where you pay for the results.
- The lead volume most of us experience with direct mail is typically very low, and for two reasons: First, much of it is going to end up in the trash as no one reads their mail anymore. Second, the way in which we use direct mail, usually asking prospects to make a large commitment like attending a seminar also dramatically reduces response.
- Lead quality, on the other hand, is typically pretty high. The reason is, as I mentioned right above because we are asking for a large commitment from prospects those who respond are usually very near the end of the buying process and ready to make a decision.
- The cost per lead is typically high, usually between $150 to $300 per lead.
Now let’s compare that to…
- Referrals are fairly neutral: they’re not really impression- or conversion-based. But if they had to be one, they would be conversion based as you have the lead.
- When it comes to Lead Volume with referrals, it’s typically very low. Partly because we don’t ask enough and partly because, after the market crash of 2008, clients are 85% less likely to refer. If you’re currently relying solely on referrals, (I know many of you tired of direct mail are) you’re likely to experience them “running dry” and end up desperate for something different. Usually tuning back to the direct mail you despised. It’s simply too hard to scale your practice on only 2-3 referrals a month. (And yes, that’s being extremely generous)
- Lead quality, on the other hand, is very high with referrals. This is also why referrals are some of the best possible leads you can acquire. Which is also why they still need to be a part of your client acquisition strategy. They just can’t be your only strategy.
- The cost per lead with referrals, of course, we all love, it’s zero.
Lastly, let’s look at…
Paid Social Media
Paid Social Media again is a static ad that you create and display on any of the various social networks. Let’s use Facebook as an example.
- Because of the way Facebook allows you to pay by your end goal, you can set up your traffic campaign to only pay for the results or clicks and leads that are generated.
- Because the pool of prospects on Facebook is so large, the lead volume is plentiful. You can also adjust the volume of leads you generate to fit your marketing budget.
- The lead quality of paid social campaigns is also usually quite high. This is because when you create your paid social campaign, you can target the exact audience you want to reach based on age, income, zip code, occupation, race, marital status, likes, etc. It’s much like we were all taught when we first got into the business. I’m sure at one time or another you heard…“Identify the demographics of your best clients and then find more just like them!” The problem was we had no tools to help us do this, until now. The social networks have filtering criteria that are almost scary. Some, like Facebook, will even allow you to upload a list of your client’s emails and then scan their profiles and find others just like them in your market so you can market to them!
- The cost per lead with paid social varies, usually dependant on how good of a job you do with optimizing your ads. This is important as no major brands or businesses simply create one ad and run with it. Many of us, however, mail the same mail piece month after month without ever testing variations. On the social networks you can create dozens of variations of your ads and watch in real time which perform and which don’t. The better job you do of optimizing your ads, the lower your cost per lead!
Whichever traffic source or sources you decide to do, simply committing to tracking your results across the metrics will almost certainly improve your results, as what gets tracked get’s improved. Before you spend any money on your next campaign, download the traffic assessment grid and make sure you’ve done your homework. Your business will thank you!
Also, if you like this post, check out the in-depth training video, Choosing Your Traffic Source by clicking here!