Pop quiz: Which is the best traffic source for generating new leads for your business?
A. Direct mail
D. Online marketing
Tough question, isn’t it? There is a lot of conflicting information in the industry, and choosing the best traffic source for your business can be frustrating.
The simple answer is that the best traffic source is wherever prospects are focusing their attention.
Depending on who your ideal prospects are, where to invest your marketing budget will vary. To get the marketing results you’re looking for, you should ask yourself several questions to get the right answer for your unique business. Let’s start by looking at the strengths and weaknesses of various traffic sources.
Old school traffic sources
Many old school traffic sources used to “own the eyeballs.” Take music for example. It used to be that your music source was the radio’s FM dial. When it came to television, you tuned into the major networks and sat through one boring commercial after another. Or you paged through magazines and newspapers, and you actually opened the mail in your mailbox.
These sources — radio, TV, print ads and direct mail — are still here and, for some, they may still serve as a large part of their marketing plan. But these are not the giants they used to be. If you’re getting poor results, it may have less to do with market saturation (or whatever else you might pin it on) and more to do with a new set of customer expectations.
Here’s the breakdown:
Radio: It used to be that you would run an ad on the radio and leads would flood in. But these days, when you want to listen to music, do you tune into the FM dial, or do you stream music online, ad-free? With services like Pandora and Apple Music, many have left the ad-sponsored stations in the past.
TV: If you’re anything like me, you most likely record all your favorite TV shows and fast-forward through every commercial.
Print advertising: How many of us read physical, printed publications? Just about everything we read now (including this blog) is online and is easily consumable through smart devices.
Direct mail: Be honest. Do you sort your mail while standing over the trash can? Most prospects are doing the same. What percentage of what you need comes in through your mailbox? With online billing, emailed statements, etc., very little has to be physically mailed to you anymore.
New school traffic sources
Some of these you’ve probably heard of before, while others may be new to you. All of them, however, are almost certain to help you reach a larger audience for less than the old school sources.
Pay Per Click (PPC): This form of paid advertising targets prospects searching for your unique service online. When they type in a search term relevant to what you do, they will see your ad pop up. If they click on it, you pay for that click; if they don’t, the advertisement costs you nothing.
Search Engine Optimization (SEO): Similar to the above, when people search for something related to what you offer, your website can show up among the first few search results in the “organic” listings. While clicks to your site are free, the cost with SEO is in creating enough relevant content on your site so search engines like Google will give you the top spot on the search results.
Organic and paid social media: Social media can be organic or paid. Organic social media includes fan pages, comments, pictures and profile content. The focus is on building a following and then pushing relevant content and offers to that group. Organic social media is labor intensive and takes time to yield results. Paid social media functions more like traditional advertising. The social network charges a fee to display static ads to your ideal target market. When prospects click on these ads, they go to your landing page. Paid social media helps identify good prospects, target specific prospects and provide real-time data on ad performance.
How to choose the right traffic source
Which traffic source will produce the greatest results for you? Here are four metrics that can help you make the right choice.
1. Is the traffic source impression based or conversion based?
Radio, for example, is an impression-based medium. You pay for every airing of your ad, and the price is calculated on the size of the audience. Direct mail is similar. You pay per impression, or the number of mail pieces sent. The problem with impression-based marketing is that you assume a high risk. If your campaign generates a lot of leads, great! But if it doesn’t, you suffer a loss.
With conversion-based marketing, such as pay-per-click, you pay only for the ads prospects click on.
2. What is the lead volume?
Expected lead volume is another major factor to consider. You may have a low-cost traffic source, and you may even get some really high-quality leads from it, but if the volume isn’t there to support your growing business, you will quickly find yourself floundering.
This is often the case when trying to build a business on referrals. As great as they are, referrals usually do not lead to enough leads to sustain a business.
3. What is the quality of the leads?
Another important consideration is the “buying temperature” and quality of the leads your traffic sources are generating. This is often a function of the targeting options that a given traffic platform makes available.
For example, with direct mail you can determine income, asset level and other metrics, and the more targeting criteria you have, the better you can ensure the quality of the leads generated. It’s also important to note that when comparing traffic sources you can’t rely on cost per lead alone, but you must also consider the volume and quality of the leads.
The higher quality the lead, and the closer the prospect is to making a decision, the more you should expect to pay. If you’re paying more for low-quality leads, it’s time to find a new traffic source.
4. What is the cost per lead?
Many of us judge traffic sources and marketing campaigns by the total cost of the campaign. The problem is that doesn’t take into consideration the end result, or the number of leads you generated and the individual cost per lead. If you look at what you pay for a given traffic source and do some simple division, you can easily determine your cost per lead across all of your campaigns.
For example, if you spend $5,000 on a direct mail campaign and generate 50 leads as a result, your cost per lead is $100. By contrast, if you run a newspaper insert for $7,000 and generate 90 leads, your individual cost per lead is $77, about three-fourths the cost of the direct mail campaign. Even though the newspaper ad seems more expensive than the direct mail campaign, it is ultimately a more cost-efficient lead-generation source.
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