I think we can all agree that measuring the ROI of content is hard. In fact, it's the #1 challenge for marketers (according to a recent study conducted with SmartInsights). So why not get a jumpstart on measuring marketing effectiveness by first measuring your sales funnel efficiency?
Pinpointing inefficiencies in your sales funnel is vital as it helps you spot and plug the leaks that are a detriment to your ROI.
This article delves into effectiveness of your sales funnel. If you haven’t created your sales funnel or need more info on how to automate your sales process online then check out this helpful marketing automation resource. Before diving straight into the 5 metrics you can use to help gauge funnel efficiency, first we must understand how a sales funnel works. So, let's investigate!
Sales Funnels Online
Inbound marketing uses valuable online content to send targeted prospects into a funnel to be successfully converted into paying customers. This sales funnel can be represented visually:
image source: Sales Funnel infographic created by 98toGo
Let’s start at the top… at the top of the sales funnel.
Attractive content helps generate traffic online and lures TOFU (Top-Of-Funnel) prospects. Marketing automation can then move these prospects efficiently through 3 stages of the buying process, from Awareness (TOFU) to Consideration (MOFU) to Decision (BOFU), warming up and qualifying these leads for the sales team along the way.
Nurturing prospects (moving leads through the sales funnel) can be evaluated and measured in a true closed-loop marketing system. Below I talk about what tools to use and which metrics to focus on.
Image sourced from chiefmartec.com's marketing technology landscape
As you can see – there are many players in the integrated marketing software space.
What tool and which metrics are best for gauging sales funnel efficiency?
Transparency Alert: I rely on the marketing platform tool called HubSpot, and also use Google Analytics. HubSpot is a best in class closed-loop marketing automation software. I regularly use HubSpot and its analytic tools to measure our own marketing efforts at 98toGo and the results of all of our clients.
Do you know which measures to look at to evaluate success? Traffic sourcing and specific engagement stats are the key measures to start with.
1) Traffic Sourcing & Engagement Stats from Content
First - concentrate on measuring efforts to attract leads to the business.
Explore both traffic (visits, or views) and engagement from various sources of content to see where potential business is coming from and whether they are taking the initial step to becoming a customer or not.
Every business must attract enough visitors to start the flow into the top of the funnel. Over time, quality content should help increase visits to the website. Then its vitally important for that same website to engage those visitors and induce them into taking action. Visitors that don’t take action don’t become leads. Marketing isn’t easy. The truth is, even most marketers feel ineffective (according to the Content Marketing Institute's Study below):
It’s a numbers game. So let’s do the math. A typical website converts approximately 1%-2% of its total traffic. So, if traffic is 100 visitors a month, expect about 1 or 2 new leads per month.
Tip: Analyze blog page views. Effectual content marketing efforts include regularly posting blog articles on the business website. However, if blog page views are low, it is likely that either people aren’t connecting with your content (usually a problem with headline or topic) or they can’t find it.
Check out below the “page performance” snapshot from HubSpot that highlights blog post views overall and reveals their engagement rate. By engagement I mean CTA% (Calls-To-Action click rate). This measures the ability of content to cause target customers (blog readers) to take a desired action. In this case the engaging action is to click on a CTA button that leads to an offer.
There are other engagement measures for a blog (such as comments and links), however focusing on getting readers to enter the sales funnel is the engagement metric I’m focusing on here.
Simply put - engaging blogs are those with a high CTA%.
The fourth blog post listed in this image below was more engaging, even though it had fewer views:
source: data from actual HubSpot Page Performance report (Cedar Creek)
A worthwhile goal for any sales funnel is capturing more and more TOFU leads. It is essential to offer visitors something of value to pique their interest - then visitors will interact with the website content and pursue offers by filling out contact forms and becoming leads.
Tip: To boost CTA% on blogs make sure a CTA offer is placed within the blog article and is highly relevant to the blog topic content itself.
Other nifty measures of engagement to monitor and adjust content strategies accordingly include these three helpful ones from Google Analytics:
- Average session duration = reading content & visiting multiple pages
- bounce rate = initial impression of content (lower % is best)
- pages/session = stickiness of content and ability to drive depth
2) Call-to-Action Effectiveness
Directly measuring CTA click-through rates is vital in gauging sales funnel efficiency. If the rates are low, then there’s not enough flow of leads coming into the funnel. Efficient funnels start with click happy websites - sites with offers so appealing, visitors can’t help but click.
This chart from our HubSpot portal provides actual results over time from two very different buttons. Button B had more textual info [“Calls to Action. Explained Here. Learn How to Convert Now”] and the data shows it had more engagement and ultimately produced two lead submissions:
source: data from actual HubSpot CTA report (98toGo)
Tip: Start by analyzing TOFU activities such as CTA offers designed to bring info-seekers into the sales funnel. Run A/B split tests using different variations of CTA buttons, and compare results to examine which ones ultimately convert at a higher percentage. Pick a winner, then rinse and repeat.
Move onto evaluating click rates for MOFU and BOFU CTA buttons. If rates are low it could reveal: either the CTA buttons are not on relevant blogs, or that potential customers are not finding value in the offer or the messaging/design needs work. Solve the issue by closely looking at where these buttons are placed and re-evaluate the offer or the messaging on the button. Know that variations testing (also called A/B split testing) could help solve the problem of messaging on the buttons themselves.
3) Landing Pages Submission Rates
The next step in measuring sales funnel efficiency is to make sure dedicated landing pages get form fills. Any friction occurring between button click to landing page goal completion results in lower submission rates.
Measuring this takes extra work to set up goal conversions in Google, but is really easy to access in HubSpot. Below are results of views that resulted in a form submission for 7 different TOFU offers and one MOFU & BOFU offer.
Note: two offers underperformed our internal benchmark of 35% for landing page submission rate. These pages likely have form friction and should be tweaked:
source: data from actual HubSpot Landing Pages report (98toGo)
Tip: Consider checking out the smart techniques for landing page optimization from these experts:
4) Email Click Rates
Effective email sequences warm up leads to become likely customers. Setting up “nurturing” emails to automatically be sent to potential customers is a cost-effective marketing practice.
Optimally, emails served up to leads in the sales funnel do two things: 1) they remind these prospects of your business’ products/services at a time that MAY coincide with that prospect’s consideration or buying decision; 2) emails stimulate further with helpful content that moves prospects efficiently through the sales funnel.
Smartly crafted emails create more opportunities to progress further into the pipeline and ultimately result in sales for the business. The goal is movement – from Top to Middle to Bottom of Funnel – by educating people in your sales funnel about your service/product and how it may solve their particular issues or challenges.
Measuring the performance of email marketing tactics is one step many business owners and would-be marketers neglect.
Another mistake some marketers make is focusing on email metrics that are less important or impossible to control. Measures such as delivery rates and bounce rates are somewhat important as they attempt to measure “deliverability”. However, delivery rates and bounce rates are difficult to control – as these metrics are likely pointers to problems on the recipient’s server side or with their email provider.
The measures that indicate efficiency are open rates, click rates and, most importantly, click-to-open rates (CTOR).
Higher open rates suggest the headline and relevance of the email’s subject line caught the attention of your lead (prospect). Open rates over 30% are solid. The 2013 Silverpop Email Marketing Metrics Benchmark Study reported that U.S. open rates for emails averaged 19.7%, while Epsilon’s Q4 2013 analysis showed an overall open rate average of 30.9%.
Click rate measures action - the prospect clicked on a link within the email. A high click rate indicates:
- Your emails have interesting content that subscribers want to read
- Your emails have content which compels readers to take action
- Your emails have very clear calls-to-action
The two studies previously cited reported benchmark click rates of 3.6% - 5.4%.
Good news for those using email nurturing campaigns – open rates and click rates are significantly higher for those using automatically triggered emails (nurturing sequences) vs. “business as usual” emails.
For me, using HubSpot to automatically deliver emails and to measure results has revealed some interesting results. Compared to benchmarks cited above, actual results for TOFU Email 3 suggest it is a weak performer:
chart source: 98toGo actual TOFU & MOFU data
However, before taking action to radically overhaul or change emails based on open rates and click rates, let’s dig deeper using a better metric.
Pro Tip: calculate click-to-open rates (CTOR). Neither open rate nor click rates tell us about the true level of engagement of our email audience. People who did NOT open the emails can’t click within them, so this skews click rates. The CTOR formula = # of clicks / # of opens. With CTOR rate we can gather valuable info about exactly how engaged our target audience is.
In the above chart the “Example email” had poor open rate (6.0%) and a poor click rate (3.0%), however, its CTOR rate of 50% is much higher than the rest. From this info, we can derive that most were NOT interested in opening up the email. Yet those who did were very active.
One action step upon discovering this high CTOR engagement rate is to create a new email list (segment group) for those that didn’t open the Example email and try to reengage them with new subject lines and content.
Because lead nurturing is automated and marketers often forget about it after they’ve set it up, it also tends to be under reported. Make sure you revisit your email analytics from time to time to evaluate performance. Email open rates and click rates are a great start, but these metrics don’t reveal the complete story of the job to be done. Sure, we’ve measured engagement, but now let’s determine if we’ve moved prospects closer to becoming customers.
5) Measuring Email Marketing Automation Performance
Marketing automation is meant to shorten the sales cycle. It does so by creating touchpoints that move a prospect forward in the buying process.
HubSpot’s answer to better marketing automation is called Workflows. The Workflows tool is multi-faceted. It is used to set up the email nurturing sequence, to establish conditions and triggers that qualify people, for setting timing of email deliveries, and to measure the performance.
Tip: Set a goal for your marketing automation and measure it.
Goal example #1 is to convert someone from a Lead to a Sales Qualified Lead. [In other words… movement from Top of the sales Funnel to the Bottom of the Funnel.] Goal example #2 is to convert leads to customers.
Below is a screen capture of how to evaluate performance of your marketing automation using HubSpot’s Workflow tool. This is a snapshot of an actual workflow’s “Overview” screen with a high level snapshot of the overall performance: 156 leads started and 41 have met the goal (becoming customers) for a 26.2% conversion rate. Bam! Here’s the key performance metric to gauge sales funnel efficiency: conversion rate.
image source: HubSpot
This is a good starting point to tell if the marketing automation is working or if it needs some tweaking. HubSpot’s Workflow tool also details more specific data on each step of the email sequencing including click rates.
For even more information on measuring ROI – check out this free eBook which explains how to measure your ROI with analytics.
I hope these tips and the 5 metrics profiled here help you gauge your sales funnel efficiency. If you’ve got suggestions on other metrics to focus on for measuring sales funnel effectiveness – please note them in the comments section below.