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Is Your Ringing Telephone An ROI Superhero?

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Web marketing is as powerful as it is, largely because we can track results. Everyone knows we need to track the ROI for our search advertising, and most of us do — at least partially. But are you certain you really know all about the ROI from your search campaigns? In particular, are you sure you really know where it all comes from?

What about revenue that comes into your business via the phone? Have you ever thought about how effective your online advertising might be at making the phone ring? Perhaps we should all take a break from counting our Facebook likes for one minute and look at real customers trying to close business with us via the phone.

Let’s define this in more detail. A typical business with an online presence spends money on paid search and other marketing programs. That money sends traffic to their website. Most search marketers have some level of proficiency tracking online conversions such as completed web forms, online purchases, etc. However, some site visitors prefer phone contact for more information or to close a deal. They hit the website, browse, and then they want to talk to sales. They may have a question before they complete a purchase or a lead form, or they may just feel more comfortable interacting in a more traditional way. Whatever the reason, they convert offline, via the phone.

Inbound phone calls are definitely a part of ROI for most businesses — and sometimes a big part. Having a phone number placed prominently on your site is an important call to action. Unfortunately, since tracking and analyzing phone call data related to advertising is neither trendy nor hot, it doesn’t get enough attention, and many search marketers ignore this data altogether. To them, a typical breakdown of the ROI from a search campaign looks like this:

 Online Ad Spend    Clicks to Our Site   Online Conversions   Phone Calls   Total Conversions

$10,000                                 5,000                     150                              ???                   150 + ???

Marketers and business owners need to consider more than just how many conversions took place online. They need to ask themselves how much ROI from their online ads convert on the phone. Digging deeper, how can they be sure about the amount involved? If they make changes to ad campaigns, landing pages, or their website, do phone conversions improve or worsen? Does call volume change with the time of day or day of week? If so, how do you consider that data when making decisions about timing your search budget spend? The overarching goal of such a consideration is to decide if you could improve ROI if you could actually answer these questions.

Our industry is slowly catching on to the importance of the phone, but remarkably slowly. Google has some pay-per-call options, but that says little to nothing about how many calls come to you from your own site. Google’s system is designed around ads on Google, not calls that happen after the visitor is on your site. Having your receptionist count the calls coming in is not a good solution either, nor is anecdotal reporting from the sales team or customer service. Human-counting systems are error-prone on their best days, and say very little about what drove calls and why. In my experience, when pressed for an answer, most clients have no idea how to approach this task of equating ROI to phone calls.

The usual method of tracking in-bound calls from advertising via a unique 800 number is 1980s technology. It’s at least that old. Set up properly, it can definitely work. Although I hear CEOs, VPs of Sales, and marketing professionals make off-handed claims to using this method all the time, rarely is there any measurement behind it. In fact, they often say one of two things — both of which are shocking:

1. “Our customers don’t call us,” or

2. “We don’t have time to answer the phone.”

I swear I hear these comments in meetings all the time. Companies love data, as long as it’s about web-based conversions. When they are forced to think about how their revenue is tied to in-bound calls, they put their heads in the sand.

Most of us do. In fact, working with more than 30 clients in the last few years, less than 10% claimed any phone-based ROI from ads, and not a single one had an accurate understanding of how their ad performance drove phone-based leads. A couple of clients had completely malfunctioning tracking attempts in place, and were misjudging the role of their phones based on those implementations. Sad, and a little embarrassing, if you ask me.

Since most clients appear to need a push to take this opportunity seriously, I started tracking all the data from phone systems I had access to. I wanted to shame them into reassessing the role of phone calls in ROI from search. Across nine clients (spanning many different B2B and B2C industries), an average of 42% of conversions from online ads came via the phone.

Let me rephrase that. Most customers to your website can only convert in a limited number of ways. As online marketers, we like online sales and completed forms, which are relatively easy to track using conventional web analytics. However, our customers love their phones, and some percentage of conversions from online ads comes via the phone.

For the clients in my sample, 42% of ROI came via the phone. That’s on average. That’s impressive. Forty-two percent is not a small, trivial fraction of results. It’s nearly half of all results, and likely more than half of all revenue. Phone-based conversions are clearly significant, and yet completely ignored by most search marketers.

Going into a little more detail, some additional findings from my study:

  • The largest percentage of conversions that came via the phone was 74%. This was a manufacturing client, and the remaining 26% converted via web forms.
  • Four out of nine clients had more than 50% of their conversions from online ads via the phone.
  • The lowest percentage of phone-based conversions in this sample was 20%. In other words, not a single advertiser had less than 20% of their ROI via the phone.

So, how do phone results compare to web results for your business? You have to start tracking to find out! Based on the experience of the clients I investigated, 20% to 70% of all leads/sales from online ads came via the phone. I’m confident that’s a safe, conservative claim that can apply to most businesses.

Now, a bolder statement. Phone-based conversions would be much higher if online marketers didn’t go out of their way to hide the phone number from their customers. This makes the potential opportunity even more significant. Go to your homepage. Do you see a clear phone number for sales? If not, you’re hurting your own ROI. You are getting fewer results than you could, and probably scaring away some business. Converting via the phone isn’t just another way to convert – it’s arguably the most important way to convert.

I’m reminded of an ad campaign that Esurance ran a year or so ago where the tagline was, “Technology when you want it — People when you don’t.” If you’re buying something, talking to a real person is often very necessary for simple reasons related to communication and psychology. And if you’re selling something, would you rather have a live person on the phone, or a stale web lead that’s hours or days old? Particularly for high-ticket products, or a consultative sale, you need to get your customers on the phone. Sending them to a form is a sub-optimal way to make contact.

Just for fun, I’ll share my personal conspiracy theory on why I think online marketers don’t understand the role of the phone. If a time machine took us back to 1996, we would hear ourselves talking about how once we all have websites, call centers will disappear, since all business will be done via the web. We thought we could save a lot of money by de-emphasizing the phone.

I was there, and I remember some of those conversations. So we built websites with forms (which were much easier to track, I agree), and hid the phone number or skipped it altogether. This was admittedly before the cell phone revolution, but today we still hide phone numbers from customers. The web is amazing, but it did not kill the phone. It’s ironic that today we build mobile versions of our website, but we don’t track calls! It’s that same off-course thinking as in 1996, still very much with us today.

Here’s a quick and simple outline for using the phone to drive more revenue and use that data to help tune online ad programs.

1.  Put a phone number on the site.

Best-case scenario is to have the phone number in the header on every site page and every landing page. Even if all you do is get the phone number live, you’ll very likely increase real ROI and revenue from your online ads immediately. It’s really that simple. If you give customers a phone number to call, they’ll call it. If you hide the number, you’ll lose business. Yes, the phone ringing means more work for sales, but the road to profit sometimes requires extra work.

2.  Implement technology to show unique numbers by campaign.

Any one of a number of vendors can help or you can build a homegrown solution. IfByPhone and Mongoose Metrics are currently among my favorite vendors. CallSource is a simpler solution I use in homegrown systems. Like all marketing technology, proper implementation is required to get any value from this process, so start with good people on the phone itself, and look at the technology second.

3.  Collect and report phone-based stats along with web-based conversion data.

Very basic reporting by channel and campaign, including conversions by phone, gives most search marketers a much better view as to the true ROI of their efforts. Think about it — what if your ROI was actually 40% higher than you thought? You could bid up on paid search, couldn’t you? Better yet, you could make a case for more budget.

Sample Phone Data:

Lead Type

 

Cost

Clicks

Web

Phone

Total Leads

Cost Per Lead

Campaign 1

$3,600

2182

26

44

70

$52

Campaign 2

$3,000

2290

27

25

53

$57

Campaign 3

$3,100

1476

22

46

68

$46

4.  Use data to optimize campaigns and make budgeting decisions.

Of course, some work is involved to implement decisions resulting from such findings. The actual recordkeeping is not too difficult for a marketer with some degree of technical skill. As well, booking unique phone numbers to track campaigns incurs some cost, but if 20%-70% of your ROI is coming in via the phone, you would be crazy to overlook the upside potential.

Concluding Remarks

A real opportunity exists to increase revenue via the phone, track where that phone-based business is coming from, and to use the data from phone tracking to optimize search spending. Companies that make the investment in what appears to be common-sense, 1980s technology will have a competitive advantage. The data is surprising and actionable. With a simple system in place, you can track not only search work, but other channels (banners, email, even organic) and share the cost across those programs. Get it done. You’ll have insight into your business your competitors don’t have, and you can use that data to make better decisions and pull ahead in the marketplace.

**Editor’s Note: This article first appeared as a premium offering in our magazine, but is now freely available.

Image: Tin Can  Telephone — Original Billboard Image from Shutterstock

About the Author

Guy Hill is an online marketing consultant with DroidINDUSTRIES, specializing in SEM, customer acquisition programs, and tracking/analytics.

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  1. We had a similar frustration with online sales and marketing - we couldn't figure out why our programs were yielding such low results. Following a hunch that prospects were more likely to pick up the phone than submit a form, we added a trackable phone to our various campaigns, and our trackable leads jumped 400%. We now automatically add trackable phone numbers for all our clients. (We even wrote about it here: http://www.salesrenewal.com/GrowthSpurtsBlog/tabid/95/entryid/106/marketing-roi-without-call-tracking-is-like-baseball-stats-that-exclude-away-games.aspx)