As the chief marketing officer at East Coast Saloons in New York City, Gina Groh is inundated with pitches from hyperlocal marketing vendors. The emails she receives from vendors tend to look remarkably similar, each promising that their platform is the one she needs to drive visits and build incremental sales.
What merchants really need is a clear-cut way to compare the effectiveness of their hyperlocal marketing initiatives, so they focus their energies on the platforms that work. To answer that question, we consulted with experts from inside the industry. Here are five strategies that merchants can use to track the success of their digital marketing initiatives.
1. Consider how conversion rates reflect in ROI. Merchants who are after revenue should consider how their conversion rates reflect in terms of ROI. The conversion rate is the number of offers sold divided by the number of people exposed to the offer (whether in terms of Facebook audience, Twitter followers, or newsletter emails). While a campaign with a higher conversion rate might seem more successful than one converting slowly, it will ultimately depend on the profit margin of your product or service. In this sense, a campaign with a 2% conversion rate of a service that gives you $80 will be more effective than one converting at 5% with a $10 profit. For this purpose, it’s better to offer products and services where your profit margin is high. (Ruben Diaz Fernandez, Shopbox)
2. Use tools to make sense of data. The tools that marketers use for campaigns — whether it’s cloud CRM systems, mobile coupons, Google Analytics, or Excel — can provide a disorienting amount of data points. However, this data can be extremely helpful if it is disseminated into a very targeted, geographical analysis. Data analysis can be a daunting task for someone not accustomed to being their own data scientist, so small business owners should look for tools that can simplify the data analysis process and provide them with the ability to access information in easy-to-digest dashboards and graphics. This way they can spend their time making real-time business decisions, as opposed to slogging through overwhelming spreadsheets. (Freddy Mangum, Roambi)
3. Measure conversions per channel. Merchants can uncover which marketing channels have the biggest impact by running the same offer across them all. While email open rates and web or social impressions indicate reach, click through rates (CTR) and redemptions can tell a stronger story. These rates ultimately reveal the strength of the offer or copy, and true customer interest levels. Based on that information, merchants can survey the most effective ads to see what gave them their edge. (Zachary Hyman, SpotOn)
4. Use a loyalty program with POS integration. Most small businesses do not track who buys from them. This makes it impossible to measure the lifetime value generated from marketing campaigns, because they don’t know if a new customer became a repeat customer. Customer loyalty programs provide consumers the incentive to share their contact details with the merchant, enabling them to track the lifetime value of each customer. Perkville is unique in that it integrates with the POS where other critical data lives, including line items purchased, sales information and coupon codes. Connecting this customer data to the POS gives the merchant a powerful way to track the ROI of their marketing campaigns. (Sunil Saha, Perkville)
5. Collaborate with neighbors. Many businesses make the mistake of focusing only on the customers they already have, or advertising to poorly targeted audiences. The best audience is the audience that has a similar interest to your customers, and is geographically close. One way to reach them is to build alliances with your neighboring businesses, and share your contacts databases in a joint, collaborative campaign. (Sharon Segev, Alicanto)
Stephanie Miles is an associate editor at Street Fight.