It was the best of times
Maybe that’s pushing it.
But, there was a brief, post-pandemic moment, when the marketing world felt relatively bright and optimistic.
Then, just when we all thought it was safe to dip our toes back in the water, Mr Putin rains on our parade, causing further untold economic turbulence.
As if two years of locking down consumers, businesses and entire economies was not enough to batter our balance sheets, we now ﬁnd ourselves looking at signiﬁcant increases in consumer and corporate borrowing costs (whacking our net proﬁts); commodity and energy costs mashing our margins; and consumer conﬁdence on the slide, denting our forecasts.
The worst of times?
In fact, its quite hard to ﬁnd a positive economist anywhere at the moment (but then economists are often described as experts who predict what is going to happen. And who then have to explain why it didn’t).
So as our poor CFOs are yet again charged with squeezing costs, protecting proﬁts and preserving cash, how can us marketeers – labelled as the big spenders – support and help during this next bump in the road of trying to build our businesses and brands?
A team for these times
Addmustard has worked tirelessly to help steer their clients through the pandemic when budgeting, forecasting and optimising spend became as challenging as it has ever been.
The data tells us that those clients who have increased conversion and improved their brand and customer experience (and therefore direct and organic trafﬁc) now have greater efﬁciency, higher ROI and improved customer retention: three great ways to reduce acquisition costs and grow margins in a turbulent economic period.
It’s time for the numbers
We can see here the ampliﬁed and dramatic effect of improving customer experience and, therefore, conversion on ROI:
For a simpler explanation of this model, if we buy 1,000 clicks at £1 per click, and convert 5 of those clicks into transactions at 0.5% conversion, our CPA is £200. If we buy those same clicks at the same cost but increase our conversion by 100%, converting them at 1%, our CPA halves and our ROI (well, technically ROAS), exponentially increases by a factor of 187% (assuming constant average margin value per transaction).
The ampliﬁcation effect of conversion improvement is remarkable. In more sophisticated models, we also add in lifetime value of customers to calculate an even more compelling reason to invest in customer and brand experience together with conversion rate optimisation.
Based on this modelling work for clients, the team at addmustard would advocate switching marginal media spend into investment in customer experience, conversion rate optimisation & organic marketing. In a more challenging economic climate, you need to drive down acquisition costs, boost margins and improve retention. In the long term, focusing on these marketing priorities will also create signiﬁcant increases in tangible brand value.
Time and time again
25 years of online marketing and e-commerce experience – good and bad – across many sectors, has consistently shown me that conversion and customer experience are the biggest levers that we can pull to drive ROI and build long term brand value.
Supporting these priorities, recent Google search updates have placed increased importance on customer experience and conversion, creating a virtuous circle of lower trafﬁc cost, increased trafﬁc share, higher conversion, greater retention and improved margins.
I have the privilege of working with some the most talented people and brightest minds in conversion rate optimisation (CRO). From tracking, testing, analytics, design and implementation, the team at addmustard has delivered extraordinary results for a wide range of B2C and B2B clients, using a rigorous approach to delivering incremental improvements in customer and brand experience, deploying their 15 factor model:
This model has proven time and again to deliver rapid results by helping marketing, e-commerce, tech delivery, commercial, product and customer teams align their priorities and focus on quick wins to reduce marketing costs and increase margins.
There’s no time like the present
As always, we’d really like to take a look at your latest performance marketing data on a no-fee basis and to show you how we can help you navigate successfully through another time of economic turbulence.
Let’s arrange a call please and we can chat through allocating resource across our teams to assess the opportunities to achieve greater cost efﬁciencies and margin enhancements.