One of the biggest challenges facing many service businesses is working out if their online marketing efforts are profitable.
If your website generates leads but you can’t track those leads through to sales transactions completed offline, how do you know which online channel is generating the most revenue?
How do you know if your website is doing what it was made for?
How can you work out which Google Ads campaign is the most profitable? Or how can you work out whether you’re pouring your money down the Google Ads drain?
Stop guessing!
In this post, I’m going to show you how to track offline sales back to the online source that generated them.
With just a simple change to your offline sales admin process and a few changes to the settings in your Google Analytics admin panel, you can start to measure revenue by channel and begin to understand how profitable (or not!) each of your online sales channels might be.
Up until now, you may have been evaluating website performance according to metrics such as website traffic, number of form submissions, click-to-calls from your website and click-to-emails from your website.
These are all very interesting but what we really want to know is whether our online marketing efforts are making money!
Tracking the sales allows you to make better decisions about your marketing budget.
This technique could work for businesses:
- that know the value of each sale at the point the lead is converted into an order or
- can estimate the value of the sale or
- could estimate an average CLV (customer lifetime value)
- can work with 20 or fewer separate prices (or price brackets)
Those might include businesses providing services like these:
- Offline training courses (driving courses, language courses, IT courses)
- Wedding photographers
- Property service companies such as boiler installation specialists
- Businesses selling fixed price service packages
- Businesses providing fixed price quotations by email
The more sales transactions you have, the more meaning you are likely to be able to place on your conversion data.
What if you don’t know the sale value of new orders?
This may because the total price is not determined until the service is completed as is usually the case with lawyers, accountants, etc. It may be because you don’t know the CLV (customer lifetime value) because you don’t know how long they will remain a customer.
Stick with me and I’ll provide some ideas to help you make estimates that might still make this technique worthwhile for you too.
Let’s dive right in.
How does the process work?
Step 1
Incorporate a new step (or modify an existing one) in your sales admin process so that you send an email to your new customer to confirm the sale.
This email will contain a link to a specially created conversion landing page on your website. The vital thing is that they must be sent the email and they must click on the link in the email to visit a conversion landing page on your website.
You can achieve that by providing them with something on the conversion landing page that they can’t do without eg joining instructions, discount coupon etc.
Step 2
Create a conversion landing page for every different conversion value that you want to track.
In the case of one of our clients, which provides HGV Lorry Driver Training Courses, there are 14 different course combinations due to the different types of vehicle and the different number of days and what they include etc. So there are 14 different possible sales values for the courses.
Therefore we set up 14 different conversion landing pages. To save time and effort, we created 1 page, copied it 13 times and changed only the course name on each page to make it clear to the customer which training course they had bought.
We created Urls that would have some meaning to us and the new clients eg example.com/hgv-training-5-day-booking/.
NB. We don’t want anyone else to be viewing these conversion pages because that could result in over-stating sales in Google Analytics. To prevent that, make sure to add the meta noindex tag to all the conversion pages and also to exclude the pages from any html sitemap page that you might have on your website.
Step 3
Create a goal definition in Google Analytics (see screenshots below) for each conversion landing page such that a goal is recorded every time one of the conversion pages is viewed. Then set the value of each goal to be equal to the sales value (exc. VAT) of the service item in question. These are easy goals to set up because they depend only on the page being viewed and not, say, a Google Analytics ‘event’ which may require custom tracking scripts to be created or GTM (Google Tag Manager) to be deployed.
How to set up goals in Google Analytics
Step 4
If you’re using Google Ads, import the goals from Google Analytics into Google Ads for use as conversions in your Google Ads campaigns. This assumes your Google Ads account is linked to your Google Analytics account. If they aren’t already linked, link them because there are other benefits of doing that.
How does the tracking work?
The cookie placed on the user’s device when they first visited your website allows the user to be identified (anonymously) as the same user that visited the conversion landing page by clicking on the link in the email.
That means we can track the sale (confirmed by the email) back to the source which generated it eg Google organic search, YouTube, Facebook, Google Ads, etc.
Tracking can also provide a goldmine of other data eg which actual Google Ads advert generated the website visit, which precise search term, keyword, device category etc.
What if the user visited your site via more than one channel?
Let’s say the user first found your business by clicking on a Google Ads advert. Later, they found your business on YouTube and clicked on a link on your YouTube channel to visit your website. Then, finally, they looked you up in google and clicked on an organic search result to visit your website a third time. The above three website visits might occur on the same day or over a longer period of time.
If they ended up becoming a customer, which channel or click should get the credit for generating the sale?
There are a number of different ways of determining how the credit for the sale is given and this is known as attribution modelling. You have options in Google Analytics in the admin settings for the property view (screenshot below) under “Multi-Channels Funnel Settings” how to apportion credit for the sale.
You can choose to attribute the whole of the sale to the first interaction with your website (usually an interaction will be a click) or to the last interaction or share it between more than one interaction. You can share it equally between all interactions (the Linear model), use the Time Decay model or the Position Based model. I usually opt for the time decay model. The time decay attribution model gives most of the credit to the most recent interactions with your website based on the assumption that the contribution made by older clicks is less significant than that of more recent clicks.
Are there any limitations of this tracking technique?
Cookies
This process depends on the use of cookies. If the user blocks cookies from their device or has cleared them, the attribution model is undermined. However, even without cookies and full tracking, the revenue will still be counted and show up in your GA reports but the source will just show as ‘direct traffic’ instead of any other more specific channel since the source of the goal will only be traceable to the email link click and not the original click used by the customer to reach your website.
However, the vast majority of people don’t block or clear their cookies on a regular basis so this is not a showstopper.
Number of goals
Currently Google Analytics allows up to 20 goals to be defined for each property or site you’re tracking. This means you can’t track more than 20 distinct conversion goals.
Depending on your circumstances, you might be able to get round this restriction by using approximations. So, let’s say you had 30 different course prices you wanted to track as conversions, you could map those 30 courses to 20 goals, choosing the goal with the closest value to your actual course price in each case. That should still make the exercise worth doing.
You could also define your 20 goals slots as price ranges. For example, you could set goal 1 as sales between zero and £500, goal 2 as sales between £501 and £1,000 etc. In this way, you could calculate a minimum value of sales generated by channel and revenue comparisons between channels would still be meaningful.
Cross device conversions
If a user visited your site multiple times from different devices on their journey before converting, it is not always possible for google to recognise these visits as being from the same user. In these cases, it will not be possible to attribute the conversion to some or all of the touch points in the user journey.
NB. Only unique goals are recorded as goals so if the customer clicks on the link in the email more than once, there’s no need to worry about double counting of revenue in your conversion data.
How can we use this new revenue data?
We can use this data primarily to understand where your sales are coming from which allows you to use your marketing budget more wisely.
Use the data to improve Google Ads performance
One of the biggest challenges faced by some service business owners, marketing managers and thirty party PPC management service providers is establishing whether their campaigns are profitable or just a waste of money. This often results in repeated attempts to make Google Ads work, followed by repeated cancellation due to uncertainty.
If all you knew was that you had spent £2,000 last month on Google Ads and the only data you had available to assess performance were metrics like the number of clicks, cost per click etc. you wouldn’t know whether your Google Ads account was profitable or whether you were pouring your money down the drain.
If I were able to tell you – with certainty – that your £2,000 investment in Google Ads had generated at least £10,000 in revenue, would you still want to abandon your advertising?
You would probably be (or should be) wanting to increase your advertising budget or – better still – remove the cap altogether on your Google Ads spend. Provided there is real evidence that it’s profitable why would you not want to fill your boots and just maximise your spend on Google Ads – because that would mean making more profit?
It’s all about being able to track and measure user behaviour so that you can manage what matters – which is money.
Furthermore, this data would not just tell you whether your Google Ads campaigns were profitable or loss making. They would provide the insights that help you improve your campaigns eg make them more profitable or change them from being a waste of money to being profitable.
You would be able to see exactly which ads, keywords and search terms generated the sales and which didn’t and therefore direct more of your budget to the profitable parts of your campaigns. You would be able to see which demographic and which device generated the most sales and in which locations and at which times of the day.
All of this information can be used to improve your Google Ads account performance.
Also, if you have had more than 50 conversions for a campaign in the preceding 30 days, then you can use an automated bidding strategy which uses Google’s machine learning technology to optimise your campaigns even further.
But what if you don’t know the value of your sale at the point the online lead becomes an offline order?
If you don’t know the exact value of each sale, try and use estimates. Consider using an estimate of your average customer lifetime value (CLV) and use that in your goal settings. You might be able to use your invoicing data or sales order processing system to make those estimates.
Each business will be different.
Take a physiotherapy business as an example. The rate per hour charged is known but the total revenue for each customer varies depending on their initial treatment program and also whether they become a repeat customer. It would still be possible to estimate an average CLV and use that in your Google Analytics goal settings for calculating the revenue generated from your leads.
Some people are uneasy with the inherent impreciseness of estimates but estimates can still be used to provide valuable insights. Average CLV is unlikely to be very different for each channel so comparisons of revenue generated by channel would still be possible and meaningful.
Finally, if you can’t measure the offline sales value of your online leads, make sure you do track and measure the most important metrics for your website. Those might include contact form submissions, clicks-to-call and clicks-to-email. GTM (Google Tag Manager) now puts this tracking set up under the control of the marketer, whereas in the past a website developer would have been needed to write custom Google Analytics tracking scripts.
Have you any experience of changing your sales admin process in order to allow better tracking of your offline sales and management of your marketing budget?
Do you have a business where your sale value is known or can be estimated at the outset and represented by 20 or fewer sales values?
I hope you found the above interesting and useful. Feel free to leave a comment below and then please share this post!
