How to Use a Traffic Calculator to Set Social Media Goals
Here's a traffic calculator to help you understand the many factors that will contribute to the success of your inbound marketing efforts:
- How traffic from e-mail, blog, PPC, SEO and events converts in different ways
- How small increases in your opt-in and conversion rates can dramatically lower the amount of traffic you need to generate
- How to understand the full lifetime value of a single customer
- How to estimate the value of a qualified lead
- How to know if your traffic goals are too high or too low
Estimate Traffic from All Sources
The first thing I do when I start a social media campaign for a client is use a traffic calculator to estimate the amount of traffic I'm going to have to generate from all our online sources. A traffic calculator tells you how much traffic you need to hit to reach your inbound marketing goals. I started by using a free spreadsheet originally provided by HubSpot, but have since modified it to meet my needs and the way I work.
First, I look at all the ways I generate traffic to my website. Search Engine Optimization (SEO) is organic search traffic that comes from people typing "Big Island public relations" or "West Hawaii Social Media." Blogging represents the amount of traffic my blog was generating in 2010 (hey, at least I'm honest; it wasn't a primary area of focus then.) Social media is traffic I can legitimately trace from Twitter, Facebook, LinkedIn and other social sites. Pay-Per-Click is paid advertising. If I generate traffic from radio or display/print advertising, I would but that in the "Other Paid" column. I also count the amount of traffic my site receives after I attend a networking event, speak at a conference, or meet a group of people in person. At the end of December 2010, I was generating about 200 quality visits to my website.
This part of the worksheet also shows my desired number of visitors from each source, but I don't actually know what that number will be until later in the process. Disregard the blue column for now. I'll get back to it later.
Only Estimate Qualified Prospects
I don't count random, miscellaneous traffic, such as those generated by bots, spiders or automated scripts. Don't use the number that Google Analytics gives you. Look closely at your data to see if you can tease out the number of "real people" perusing your site each month. For my traffic calculator, I only want to count the number of qualified prospects-people that might possibly do business with me one day or refer someone else who might. The numbers in red reflect my best estimate of "potential prospects" that come to my site to check me out.
Make Sure Your Goals Are Realistic
The leads you get from social media will be of a different quality than the leads you get from blogging and events. Make sure you're spreading yourself around in a realistic way, so that your sales funnel is full of the right types of prospects. Be clear about this. Know your customer and where they hang out. If they don't use social media, then don't expect to use social media to drive the bulk of your traffic. For example, I expect organic search to account for 20% of my traffic, blogging 30% and social media only 10%.
Stop to consider if your traffic goals are realistic. Make sure you're not expecting too much from social media, blogging or just your e-mail campaign alone. Make sure to weigh your efforts accordingly.
Estimate Your Opt-In Rate
Now that you're clear about which channels you're using to reach people, look at the actions people will take to form a relationship with you.
Your first call-to-action is to "opt-in." That means asking a visitor to either sign up to receive content via e-mail, asking them to submit a form, or simply call you. I average about 1 sign-up and 3 phone calls a month from all my efforts. This is my first point of contact with people, or my "opt-ins."
I can expect to generate 74 new leads each month if I meet my traffic goals in each area (e-mail, blogging, social media, events combined).
Estimate Your "Opt-In to Sales" Rate
Once you have a group of "leads," you can then begin to estimate how many of them will become a customer. This is your "opt-in to sales" figure. If you're selling to businesses and the cost of your item is rather large, say $1000 or more, use 5% as your opt-in rate and 2% as your opt-in to sales number. If you sell a small-priced item or sell directly online, your conversion rates will be higher.
In this example, I use an entry-level price point of $500 to estimate the amount of monthly revenue this might generate. If I reach my traffic goals, I can realistically expect to earn 3 new clients valued at about $1,468.
Note: Make sure the size of your market in real life matches up to your desired traffic goals. You may need to reach beyond your geographical area to attract the right traffic.
Look at the Lifetime Value of Each Customer
How many of your customers will continue to work with you long-term? If your sales funnel offers the ability to go from a small, entry-level package into a more complete and full-service offering, then you can plug those numbers into your traffic calculator as well.
Here, I estimate one in 10 customers will progress into larger and larger packages. I use an average price point of $1,000 and $3,000 to represent midrange and high-end packages.
At the end, I can get a reasonable, if not conservative, estimate for how much revenue I could generate from inbound marketing. This number is in addition to the revenue earned from repeat customers and other sources of new business not accounted for here.
If the total revenue figure from inbound marketing is too low, I can adjust my traffic goals accordingly. In this case, I carefully looked at the number of monthly leads I would need to process. If 74 qualified prospects "opt in" to engage with me, then I better have the support systems in place to nurture those relationships.
Estimate Average Revenue Per Customer and Per Lead
Another benefit from using this worksheet is the ability to estimate the average revenue per customer for each sale obtained via inbound marketing, and even the average revenue per lead! This is really handy for creating an advertising and marketing budget, because in this scenario you can see that each qualified lead is worth potentially $18-$45 in new revenue.
You can also estimate how much of your total website traffic will become a "lead" or "customer."
Don't let this spreadsheet intimidate you! There are easier ways to use a traffic calculator in your business. I just wanted to walk you through mine so you could see how all the different elements of your social media campaign add up to new business revenue.
If you'd like to get started using social media to drive more traffic to your website (or learn how to optimize your website for lead generation and conversion), contact me for a consultation.
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