Unravel the Mysteries of Online Marketing: How to Find Out If Your Online Marketing Strategy is Working

When it comes to online marketing, some independent contractors operate without a plan. They set up a home page that’s full of jargon and fail to bring potential customers to the point of sale. They blast out e-newsletters to folks who quickly unsubscribe. And they invest heavily in online advertising while only getting a vague sense of whether it’s working.

But it doesn’t have to be that way. There are best practices and tools out there that can help you assess your online marketing strategy’s effectiveness. Done right, marketing your company online should pay off with higher dividends than other marketing methods.

“Studies show that advertising dollars spent online are more profitable than dollars spent in offline channels such as Yellow Pages or postcard marketing,” says Scott Smigler, co-founder of Exclusive Concepts, a Waltham, Mass.-based online marketing strategy firm specializing in small-business customers. “By shifting those dollars online, businesses achieve a greater return on marketing investment and spend more time building the business and serving clients.”

How do you know whether your online marketing approach is effective? Here are some tips from online marketing experts:

Track the essentials. When it comes to evaluating your investment, the key stats are cost-per-lead and cost-per-conversion. Simply stated, cost-per-lead is the amount you spend on online marketing divided by the sales leads such efforts generate. Cost-per-conversion is the amount you spend divided by the number of new customers you get from that investment. “This is your bottom line,” says online marketing expert Peter Koeppel, founder and president of Koeppel Direct, a Dallas-based media/advertising-buying agency. “It is relatively easy to track what you are spending on keywords, banners and e-mail blasts, and then measure performance for each. If whoever is doing your online media buying is not keeping track of your cost-per-lead and cost-per-conversion, then you need to re-evaluate your strategy.”

Also, tracking codes are a great way to gauge the effectiveness of your efforts. “Businesses should require customers to type in a code to receive offers promised in their online promotions,” says Joanna Smith Bers, managing director of DB Marketing Technologies, a New York-based marketing analytics firm. “The code, given with the promotion, should reflect the Web site where the marketing aired, the creative message used, the offer itself and any other targeting effort made to reach a particular audience. Set up properly, every response will feed into instant and cumulative reporting on which promotions are working, with whom and where.”

Don’t worry about the non-essentials. Too many independent contractors focus on how many hits their home page gets a week. They shouldn’t. “Web hits are often misleading,” Smigler says. “Focus instead on unique visitors. One unique visitor equals one potential customer on your site, generally.”

Effective e-mailing. E-mail marketing is essential in any online strategy. But how do you know if your e-mail promotion plan is making an impact? For starters, make sure you stay on top of your open rate, which is the percentage of e-mails you send that get opened by recipients. A strong open rate would be 20 percent or higher, as the average rate for small businesses is 17.8 percent, according to MailChimp.com, an Atlanta-based e-mail marketing service for small-business customers. “Always check your bounce and unsubscribe rates too,” says Ben Chestnut, co-founder of MailChimp. “If these numbers increase every month, it means more and more people are tuning you out. In contrast, if your subscription list grows every month, it means more people are passing on what you send to friends and associates, and those people want to sign up too.”

Non-tech ways to assess effectiveness. You should take a good, hard look at your Web site from the perspective of a user who knows nothing about your business—but could be a future customer. Does the look of the Web site feel inviting? Does the text make sense? Is it written without a lot of jargon? When you click on various links, do you go to where you expected to go? And, most of all, does the site bring users to the sell point swiftly and cleanly? “Web sites should, at a minimum, answer three customer questions: Who are you? What can you do for me? How can I contact you?” Smigler says. “Combine that with several client testimonials and a professional image, and a contractor’s site will be light years ahead of competition.” Smigler suggests allocating no less than $3,000 on your Internet presence, and going to a reputable Web hosting provider, such as Yahoo.