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Data Collecting for ROI and Conversion Calculations

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Data Collecting for ROI and Conversion Calculations 526-daily-golden-nugget-648One of the most common problems for a retail store, not just retail jewelers, is being able to accurately track the point of origin of online visitors and follow them through to the point when they walk into your retail store. Although for small retailers there is a simple method... you simply ask your customers.

That might seem intuitive, but in all seriousness, the retail jewelers I talk to tell me it's not easy for the sales person to remember to ask a lead source question when you're in the middle of selling romance.

It kind of kills the mood, if you know what I mean.

Romance or not, unless you can collect actual in-store data you will not be able to accurately measure the effectiveness of your website, or determine if your goal are being met. The job of your website is to use the tools provided by online marketing and SEO is to bring people into the store. If your website isn't doing its job correctly then it needs to be retrained, or retooled.

Measuring the effectiveness of an ecommerce site is easy; all the tools are online and you can track visitors from their point of origin all the way through checkout, or shopping cart abandonment. When the website makes a sale you could say that it met its intended goal, but maybe selling online is only an accessory use for a retail jeweler's website. Maybe the primary use of the website is to get people into the store, which means it still comes back to asking that led source question in person.

I'm going to make a broad generalization and say that the typical goal of a retail jeweler's website is to increase foot traffic rather than sell specific items. Although customers do sometimes come into the store looking for exact items they've printed out, it doesn't happen daily like it does in Sears, BestBuy, or Radio Shack.

With that generalization in mind, let's figure out how to measure your goal so you know the effectiveness of your website and online marketing. Remember that tracking I explained last week? You will need that UTM Google Tracking or something like it because that's where the measuring starts.

I'm going to use these 30 day fictitious website tracking stats from Google Analytics:
Visits from Facebook: 15
Visits from Google+: 4
Visits from Pinterest: 2
Visits from Twitter: 1

Since the world is still enamored by Facebook I'm going to use that in my calculations below.

If you hired an agency to do your Facebook management then you have an easy calculation ahead, but if you manage Facebook in house then you need to track the amount of time it takes for you or your employee to do the work. Since Facebook referrals are normally pretty low, 15 referrals from the last 30 days would probably be about 30 minutes per day engaging.

Let's do the math:
30 min X 5 day work week X 4 weeks = 10 hours.
According to payscale.com and careerbuilder.com the national average for a jewelry store salesperson is $26/hr.
10 hours X $26 = $260 is your minimum payroll cost for your Facebook marketing.
This is where you would use your hired agency cost instead of your payroll cost.

Now let's figure out the return on that...

I will assume a perfect world and say that you ask every person who walks in the store how they heard about you. You have to write down their response, but sometimes it's not as simple as that, here's why:

* If they say Google, then it's an organic visitor.

* If they say Twitter, then they read one of your tweets.

* If they say Pinterest, then they saw a pin either posted by you or someone using you as a source.

* If they say Google+, then they saw something you posted on Google+ or Google Maps

* If they say Facebook, then you can mark them down as a reference from Facebook and you know that the 10 hours we calculated above now has a potential ROI.

* If they say "website" then ask how they found your website. If they then say that they clicked over to your website from Facebook then you know the person standing in front of you is one of those 15 people shown on Google Analytics!

You have to track all the sales associated with each of these online sources. The best method would be to force the sales lead question at the point of sale. At the end of the month you would total up all your sales from Facebook and figure out if your marketing makes sense for that social network.

I'll continue this tomorrow with a step-by-step calculation explanation of ROI, visitor value, conversion ratios, and something I call In-store Visitor Ratio.
AT: 01/16/2013 07:10:06 PM   LINK TO THIS GOLD NUGGET
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