Increasing a focus on internet marketing for SMB’s isn’t enough; solving the analytics equation is a big challenge

by drm on May 21, 2010

An Emarketer analysis this week of two research studies concluded that social media was going to be a big focus on web marketing expansion by small businesses.

Our experience on the ground selling our DigitalSherpa service confirms the direction of the surveys.  Once we get into a discussion about how content marketing and digital networking can help their firm, local business people quickly move past questions about “why” to questions about “how?”

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There’s a fundamental problem, though, that the research doesn’t get at.  Local businesses don’t have an interactive strategy that is geared to acquiring and converting qualified leads.

In most aspects of local business marketing, the lack of sophistication around leads acquisition and conversion isn’t that important.  But in internet marketing, it’s critical.

Take a look at the research first.  According to the “Third Annual FedEx Office Signs of the Times Small Business Survey” (that’s a mouthful), use of social media is the fastest growing tactic small business owners cite in their marketing planning.  The primary area of focus continues to be improving online presence, signaling that SMB owners consider this an area where improvement can is needed.

eMarketer then cites a Constant Contact study that shows that websites and e-mail marketing are the two most prevalent tactics or tools that SMB owners rely on to market their business.

NewImage.jpgThe high penetration of Facebook makes for an attention-getting headline, but the nuts and bolts of the marketing program are in the website and continuing contact to the prospect and customer database.

The challenge is how these SMB owners are making decisions about the effectiveness of these tactics.

It doesn’t sound hard:  track web traffic, measure leads and conversions and then select the most efficient sources.

But making these kind of analytical decisions are challenges to the largest businesses in America.  Another recent survey concluded that the biggest obstacle to effective web tracking at larger companies was finding the talent to do the analytics.  If large companies can’t get to the answer, how can small companies expect to?

In traditional marketing campaigns, these kind of analytics were not as important.   A local marketing initiative drove the consumers to one of two places:  a phone number or a physical location.  At the other end of the interaction was a real person, who would ask questions, engage and impart information.  The interaction was more discursive and exploratory, and the experience of the person representing the business in adapting answers to the knowledge and personality of the person asking was critical to driving sales.

With web marketing a primary goal of the program is to drive a person to a web site where they can get information that will inspire them to either act directly or reach out for more information.

If that web site isn’t designed the right way, then you’re not going to get the return on your investment that you should expect.

One of the things that we’ve learned in our business is that creating a web site that can drive conversions is a science, not an art.  Like any science, it requires constant experimentation and adaptation.

The challenge facing SMB’s is not just putting focus on internet marketing; it’s figuring out how to find partners who have the knowledge, expertise and interest to help them participate in a science that challenges even the largest firms.

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  • UrbaneWay

    Dan, Good Morning
    Glad to see your posts again. I enjoy both reading your articles, as well as commenting, as it allows me to further materialize my own thoughts on the some of the issues we are stumbling through with our own business, as well as my random thinking. Thanks again for your thought provoking posts.

    I have a couple of views for consideration to your article, part theory with some sprinkling of our own experience of results, or said differently, our understanding of the results. We are working intently on “Expanding our Digital Footprint” in our boutique apartment business. At our last few staff meetings, regular and consistent commenting to our twitter and facebook accounts have become a mandatory requirement of our leasing staff. We are looking at the number of followers every week, including growth rates, similar to how we are looking at other important metrics of our business results. There is an inherent value to growing the numbers, or followers, assuming your followers are relevant, which plays to your issue of metrics and associated conversion challenges. While perhaps a lofty goal, we have targeted to grow our facebook fan page to exceed 10,000 fans. While the currency value of that may not be clear yet, my hunch is it will be at some point and folks will wish they would have started the trek sooner and more aggressively.

    In an unannounced move last week, Facebook began requiring Page owners to have at least 10,000 fans or pay at least $25,000 in advertising in order to set application tabs as landing pages. Although they immediately reversed that it implies a monetary value relationship to followers. Is each follower valued at $2.50, likely not, some are much higher, as they are aggregators of your brand, and some have a negative value as referenced by negative comments and each followers reach and circle of influence. Apparently once you cross the threshold of 10,000 facebook followers, you have access to a much more detailed set of analytics from facebook, which is pretty fascinating for the marketer.

    As for web traffic, we believe, based on our experience that as our web site visitors increase, there is a direct correlation to physical traffic/sales/rentals. We have been keeping rudimentary notes and detailing as we analyze this correlation, to the extent we understand it for the past several years.

    While I agree web site conversion metrics can on one hand be confusing and complicated, as there are a lot of numbers to consider, coupled with the fact that the user, or web visitor is not at all consistent with how they search, keywords literally change each month, we have discovered some interesting correlations between growing our Digital Footprint and Increased Sales/Rentals. My basic and perhaps simplistic focus is on Occupancy and NOI, nothing else matter all that much.

    As an example;
    In April of 2009 we had
    235 pieces of traffic, which converted to
    99 tours that netted
    21 leases, against web site visits in the month of April for 2009 of
    9,559

    For April 2010 we had
    506 pieces of traffic, which converted to
    130 tours that netted
    30 leases, against web site visits in the month of April for 2010 of
    13,828

    Note that we increased web visits year over year by 44.66%, which resulted in a 43% increase in Net Rentals. For the most part, our conversion ratios from traffic to tours, and tours to rentals is relatively consistent for the eight years we have been tracking.

    So, my simplified metrics are when you need more rentals, increase your web traffic. I should note that we are now hovering at a solid 98%-99% occupancy and the rash of move outs due to job loss over the last five quarters seems to have stabilized. The point is, we are now overproducing the amount of traffic required to keep our portfolio full, and we are experimenting with how much over market can we push rents, by over over producing traffic and is there any lift in NOI by doing so.

    NCI, and their Digital Sherpa product bring exceptional value to the client relationship by increasing their web traffic, as I credit most of our success at increased web traffic because of additional and increased content.