How to Find out What Marketing Campaigns are the Best for Acquisition, ROI, & Retention

Source http://feedproxy.google.com/~r/KISSmetrics/~3/GyHPfRVevdU/

What marketing manager wouldn’t want to see exactly how their campaigns impact ROI? The better you understand what works, the more likely you are to deliver the growth your company needs to reach the next level.

In this post, we’ll be discussing how to track your campaigns in KISSmetrics. We’ll discuss how to set them up so you can track them correctly. Also, we’ll use reports in KISSmetrics that will help you identify which campaigns are the best for customer acquisition, ROI, and customer retention.

Let’s begin with an explanation of how KISSmetrics tracks campaigns.

A Quick Rundown on UTMs

As a marketer, you are likely running a few dozen online campaigns. You might have a paid search campaign, an email campaign, various content marketing activities (webinars, PDFs, etc.), and a paid campaign on a social channel. How do you keep track of all these campaigns and differentiate one campaign from another?

Enter UTMs.

A UTM (urchin tracking module) is a snippet of text added to the end of a URL. They are used for tracking marketing campaigns.

You may have seen them around the web. They look like this:

http://www.example.com/?utm_source=facebook&utm_medium=cpc&utm_campaign=10off

There are five variables, also known as parameters, in a UTM:

  • Campaign source (utm_source) (required) – Used to identify a specific source within a channel, such as AdWords, Facebook ads, or Twitter ads to distinguish paid ads.
  • Campaign medium (utm_medium) (required) – Used to identify a marketing channel like email, paid, etc.
  • Campaign term (utm_term) – Records the keywords used in paid search.
  • Campaign content (utm_content) – Used to differentiate ads or links in the same piece of content.
  • Campaign name (utm_campaign) (required) – Used to identify your campaign, such as your website, a specific sale, etc.

In our example (shown again below), we used three variables:

http://www.example.com/?utm_source=facebook&utm_medium=cpc&utm_campaign=10off

Source – In this case, “Facebook” is the source.

Medium – This specifies that it is a paid link.

Campaign name – This is an ad for an ecommerce company offering people 10% off their first order.

UTMs have become the standard since Google Analytics uses them to track campaigns. We deliberately structured KISSmetrics so that it could take advantage of the same tracking. This makes it very easy for you since there is nothing to change. KISSmetrics will grab the same campaign data.

How UTMs Work in KISSmetrics

When a person visits from a URL that contains the campaign source (utm_source), KISSmetrics will automatically record the event Ad Campaign Hit. All the variables in the UTM are recorded as properties. Take a look at the following URL:

http://www.example.com/?utm_source=newsletter&utm_medium=email&utm_campaign=Jan_deals

If a person visits from this URL, KISSmetrics will trigger the event Ad Campaign Hit and record the following properties:

Campaign source: newsletter

Campaign medium: email

Campaign name: Jan_deals

Variables are recorded as properties in KISSmetrics. And, when these properties are recorded, you can use KISSmetrics to track a campaign’s effectiveness in acquiring and retaining customers.

In this post, we’ll use an ecommerce site as an example, but you can use UTMs for anything. They aren’t limited to ecommerce.

We’ll run through four separate campaigns:

  • Email
  • Paid search
  • Social
  • PDF

We’ll track them from the start of creating a link all the way through to revenue. Let’s begin with email campaigns.

Using UTMs with Email Campaigns

Many email marketing programs allow you to track links, but only as far as which links get clicked. To track links all the way to revenue, you’ll need to use KISSmetrics.

Let’s say we’re an ecommerce company selling nutritional supplements. We run an email newsletter that people can sign up for on the website. We usually send health tips in the newsletter, but the next email will announce our 20% off campaign. The newsletter will go out to all subscribers, and the sale will apply to everyone, whether they’re a customer or not. The sale will last five days.

We’re going to keep the email simple, with the subject line mentioning the sale. The body of the email will contain links to three of our best selling products. These links will have UTMs attached to them.

To create a UTM, we’ll use Google’s URL builder and enter the following variables:

We can add this UTM to all the links in the email. Now, let’s see how we can track this with a funnel.

Tracking Purchases from This Email Campaign

To see if this email converted readers into buyers, we’ll set up a basic funnel report to track people who visited the site, placed an item in their cart, and purchased:

To track the email campaign’s effectiveness, we’ll need to segment people by campaign name. Keep in mind that this email campaign used five_day_sale as the campaign name variable.

Here are our options for segmentation:

We’ll choose “campaign name” at the time of “Purchased.” This tells KISSmetrics to segment people by the campaign name they had when they purchased. Now, we’ll see all the people who have purchased and which campaign they came from:

This report shows us all the campaigns we’ve set up with the UTM variable “Campaign name.”

Our most recent campaign had the variable five_day_sale. This campaign can be considered a success because the conversion rate is solid, with nearly 24% of those who visited the site converting to purchase. This is nearly double our average conversion rate.

Using UTMs with Paid Search Campaigns (AdWords)

The most popular way to import your AdWords data into Google Analytics is to enable auto-tagging. This places a parameter called gclid in URLs. It looks like this:

www.example.com/?gclid=123xyz

This gclid information is only for Google Analytics. No other tool, including KISSmetrics, has access to that data.

When you use KISSmetrics and a person clicks on a URL containing the gclid parameter, an event called Ad Campaign Hit will be recorded. But, KISSmetrics (and other analytics tools) will not be able to get any information about which campaign the link is from, which keywords were used, etc.

To get that information into KISSmetrics, you’ll need to use a UTM. You can use gclid and UTM parameters at the same time without issue. Google Analytics will read the gclid data, while other tools (including KISSmetrics) will read the UTM data.

Going back to our previous example of an ecommerce company, we also have multiple ads through AdWords. We use gclid parameters to get that data into Google Analytics, but we also want to track the ad campaigns in KISSmetrics. We’ll set our UTM variables:

This UTM will tell us that people who click on this link are from an AdWords campaign. They will click on a multivitamin offer, and our main messaging in the ad is that we are the only ones selling this product. The campaign medium tells us that it’s a paid channel.

For this funnel report, we’ll test keywords against each other. We’ll segment people by Campaign term.

At the end of the month, this funnel report shows us a list of all the paid keywords that have brought us traffic:

Most of these keywords have a solid conversion rate throughout the funnel, with an average conversion rate of 11.2% from Visited Site > Purchased.

Raw sales numbers are great, especially when you’re tracking campaign effectiveness. But, to really judge these paid campaigns, we’ll need to know how much revenue they’ve brought us. For that, we’ll use the revenue report.

When segmenting people in the revenue report, we’ll look at the first ever Channel: Origin. The channel property groups people into seven channels based on their referrer or campaign. Channel: Origin displays the specific referring URL or campaign name. It’s the next level of segmentation into the channel.

Here are the seven channels people can be grouped into:

  • Direct — Visits from direct referrers, or typing the site into the browser, or bookmarks
  • Organic — Visits from search engines
  • Referral — Visits from 3rd parties
  • Email — Visits from emails
  • Paid — Visits from paid sources
  • Social — Visits from social networks/sites

One of the channels is Paid. When we attach the gclid parameter to our URLs, KISSmetrics automatically categorizes that traffic into the Paid channel and assigns them the AdWords origin. Here’s our data:

We’ve received over $275,636 from this channel, and we have a large volume of customers, with over 12,000 coming from AdWords.

To know if this is a profitable channel for us, we’ll have to look at our AdWords spending. Lifetime value (LTV) is also an important metric. It’s only an estimate, but the revenue report calculates that each customer coming from Paid will spend around $900 during their lifetime. Churn rate is factored into our LTV calculation, so if we can keep it low, we’ll maintain a strong lifetime value. Ideally, our LTV needs to be high enough to cover the cost of acquisition.

To get a deeper analysis of retention, we’ll use the cohort report and track repurchase rates. To do that, we’ll set the two events to “Purchased.” This tells the cohort report to find the people who have purchased, and then track them to see how many purchased again.

The event “Purchased” is triggered when a person makes a purchase on our website. This event is not automatically tracked in KISSmetrics, so you’ll have to set it up yourself.

Here is the Report Configuration:

Now, here’s the data:

I’ve highlighted the cohort we’re focusing on. We see that many people repurchase a few weeks after placing their first order. This means that we’re likely getting a good ROI on our AdWords spending. It would be advantageous for us to continue this marketing channel.

Using UTMs with Social Campaigns

UTMs are used everywhere on social media. Go to your Twitter feed, click on a few links, and you’ll likely come across at least one that has a UTM. This makes sense because the people who shared the link want to know more than just how many times it was clicked or the total traffic they get from a particular social platform. They want to be able to tie campaign data to it.

Continuing with the ecommerce example, we can create a UTM for each link we share. It may look like this:

http://www.example.com/productone.html?utm_source=twitter&utm_medium=social&utm_content=fish_oil&utm_campaign=product_launch

We’re using four variables. Our source is Twitter, the medium is social, the content is the name of the product, and the campaign is a product launch. The content name, fish_oil, is important here because it distinguishes itself from the other products we share on Twitter. The campaign name, product_launch, is assigned to tweets that announce a new product we sell.

Using UTMs to Track PDF Campaigns

Many ecommerce and SaaS companies use PDFs to garner prospect leads, generate interest, and show thought leadership in their space. Ecommerce companies offer product catalogs in the form of downloadable PDFs. SaaS companies use PDFs to explain which problems their product solves and why people should try their solution.

A big issue with PDFs is that they have no referrer. If someone downloads a PDF, clicks a normal, non-UTM link in the PDF that takes them back to your site, and then they purchase, the PDF doesn’t get credit for the sale. Fortunately, we can track the effectiveness of these PDFs by adding UTMs to every link.

If we’re an ecommerce business, we may create a product catalog that links to hundreds of products. We can use UTMs to track which products garner the most interest. If we’re a SaaS company describing our product, we may link back to a features page on our site using a UTM.

For all sources that don’t have a referrer (such as a PDF), we’ll need to use UTMs to track where people come from.

Measuring All Campaigns against Each Other

Measuring one campaign is great, but to find the campaigns that lead to the most growth, we’ll need to compare them against each other.

We don’t need to use any reports other than the ones we’ve already used. We can get all our data with a funnel, revenue, and cohort report. The funnel report will give us acquisition metrics, the revenue report tells us the money we’ve received, and the cohort report tracks retention.

Let’s get started with the funnel report.

Funnel Report (Track Customer Acquisition)

We’ll be segmenting people by their first ever Channel. To set this, all we have to do is click on the gear icon and select first “Channel” ever:

This will sort people by first touch, meaning we will show the channel that drove a person to your site the very first time, even if their first visit came before the start date of the funnel. People will be placed in one of the following seven channels:

Content — People who came from a PDF or any other content will be put in this channel.

Direct — People who came without any referrer will be put in this channel.

Email — Those who came from an email campaign will be put in this channel.

Organic — People who came from a search engine will be placed in this channel.

Paid — Any people who came from a paid link will be placed in this channel.

Referral — Anyone who came from a 3rd-party site that is not social or paid will be put in this channel.

Social — If people came from a social media site, they’ll be put in this channel.

We’ll run a funnel report that tracks people who visited the site, placed an item in their cart, and purchased. We want a large amount of data, so we’ll make our date range six months:

At the top of the funnel, we see that Direct and Email both bring us a solid amount of traffic. These are good channels for us because the traffic is free. Both have given us a good number of customers as well.

The Paid channel is a high performer because it brings a lot of people, many of whom went on to purchase. Social brings a good amount of traffic, but has one of the lower purchase rates. Only about 6% of those who visited the site went on to purchase.

Content is a good channel and has a solid conversion rate throughout the funnel. Much like Direct, Organic is essentially free traffic for us. During our six month time frame, 935 people who came from an organic search converted to purchasing.

Revenue Report (Tract ROI)

To track the money we’ve received from each of these channels, we’ll load the revenue report and sort people by first ever Channel:

One of the strongest channels here is Direct. It brings in a lot of customers and revenue, has a good churn rate, and a high lifetime value. Paid is another solid channel. It brings in a lot of customers and has a good lifetime value. We’ll have to look at what we’re spending to know if this is a profitable channel for us.

Email also has a large customer base that brought revenue in the six figures during our date range. Since it’s a low cost channel, we’ll continue to work on getting more subscribers on board.

The other four channels bring us solid revenue and a healthy dose of customers. Social brought over 4,000 customers during our time frame. This is a good channel for growth.

Content brought a good amount of revenue; we’ll have to see if we should ramp up our efforts to get more growth out of that channel.

Referral has brought the least amount of money and has a low average revenue/person metric, but it has strong lifetime value due to its low churn rate. If we can get more links back to our site, this channel has the potential to become a better performer.

Cohort Report (Track Customer Retention)

Now, we’ll run a cohort report looking at repurchase rates for each campaign. We’re grouping people based on the campaign they came from, and then tracking the ones who purchased to see how many purchased again:

In every campaign, about 10-16% of customers repurchased within the first week. That drops off in the following weeks; but after 12 weeks, we see that about 4-10% of customers repurchased. There’s a lot of parity with these campaigns, but the best ones for repurchases are Direct, Paid, and Email.

The Four Takeaways to Remember

Please remember at least these four things from this post:

  • UTMs allow you to track campaigns – You can build UTMs using Google’s URL Builder and track them in Google Analytics, KISSmetrics, and many other tools.
  • Use the funnel report to track customer acquisition – This report will show you how many people came to your site and what percentage of them converted to purchasing.
  • Use the revenue report to track ROI – This report shows you how much money you’ve received from each campaign. The amount is especially useful if you know how much you’re spending on each campaign, because then you’ll have a better idea of which campaigns are profitably bringing you growth.
  • Use the cohort report to track customer retention – To thrive, ecommerce companies need customers to repurchase and SaaS companies need customers to stick around for a while. To track how well you’re doing in these retention efforts, you can set up and track your data in a cohort report.

Also, with all these reports, you’ll be able to compare your campaigns against each other in KISSmetrics.

To discover which marketing campaigns are delivering the best ROI, login or sign up for a KISSmetrics account now.

Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, we will receive an affiliate commission. Regardless, we only recommend products or services we believe will add value to our readers.

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