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<Img
img="/uploads/CRO_35eb42856c.png"
alt="CRO"
/> 

**CRO (Conversion Rate Optimization)** is essential when it comes to lead generation and effective sales. In an attempt to improve the functionality of sites, many companies overload it with complex algorithms and completely forget about convenience and logic. However, it is “smart” but not complex sites that work best for traffic. 

Increasing traffic is an important task, but not the final one. It is much more significant for businesses to convert the attracted traffic into quality leads. Moreover, according to statistics, it is more profitable to keep existing leads, rather than attract new ones. Businesses are more likely to grow progressively and have a stable future with such leads. In this context, it is important to keep track of the Conversion Rate.

## What is Conversion Rate

**Conversion Rate** is the [**ratio**](https://www.google.com/url?q=https://blog.hubspot.com/marketing/conversion-rate-optimization-guide%23conversion-rate&sa=D&source=docs&ust=1662554610152440&usg=AOvVaw0PugTYPGDhW9B6woIORNAs) of site users who have completed the target action to the total number of visitors. The target action can be anything: purchase, registration, subscription, and others. It depends on the tasks of the business at the moment.

<Img
img="/uploads/Conversion_Rate_19102f3e3b.jpg"
alt="Conversion Rate"
/>

*Let’s say, the target action is a subscription to a newsletter. The subscription form is placed on all pages of your site. In three months 500 people out of 20,000 site visitors became subscribers. To calculate the conversion rate, you need to divide the number of subscriptions by the total number of visitors and multiply by 100. We get 2.5%.*

You can calculate the conversion rate for each page of the site separately, and the calculation formula is universal for any task.

*For example, you need to calculate the conversion rate of a [**lead magnet**](what-is-a-lead-magnet). You use an e-book as a lead magnet. You add a download link only to some pages of the site. To find out the conversion rate, it is enough to divide the number of downloads by the number of visits to those pages where the lead magnet is located.*

A quality website has a high conversion rate. What does quality mean? User-friendly, informative, attractive to the [**target audience**](creating-a-customer-profile). Low Conversion Rate indicates poor design, low site speed, and form errors.

## "Good" Conversion Rate

What are high values and low values? What value will be a positive result? Everything is very individual and depends on the scope of the company, its geography, business goals, characteristics of the target audience and other factors.

In the [**field of e-commerce**](https://www.statista.com/statistics/439576/online-shopper-conversion-rate-worldwide/#:~:text=Global%20online%20shopper%20conversion%20rate%202018%2D2020&text=In%20the%20United%20States%2C%20online,the%20top%20spot%20for%20conversions.), the average conversion rate globally was 2.17% in the third quarter of 2020. A year ago, the indicator was 2.37%. At the same time, the American market showed a value of 2.57%. 

The conversion rate varies significantly in different time periods and in different countries. It also varies depending on the niche.  The conversion rate of e-commerce in the food segment is 5.5%, and in the hair care segment - 3.5%.

What should you rely on? On your own expectations, on the increase in the indicator in relation to the previous year, on the comparison of the conversion rate with the average value for your industry, on the achievements of competitors. If any position doesn't suit you, start optimization.

## Where is the CRO strategy applied

Any page on your site can convert, whether it's the home page, pricing page, or blog. You need to tidy up each section of the site in order to achieve the maximum effect from optimization.

1. A [**main page**](https://altcraft.com) is the number one goal for CRO, since the first acquaintance of the user with your company begins with it. A good homepage will encourage a visitor to continue their journey through your website. A bad homepage will force them to leave it. The homepage is a good place for "anchors". It can be a chatbot for constant communication with the client, a subscription button or interesting links.

2. A **pricing page** visit can be decisive on the way to conversion. Attractive and convincing prices will strengthen the desire of the buyer, and the biased prices will scare away. How to convince buyers of the adequacy of the cost? Use CRO. The conversion can be increased by changing the pricing intervals (cost per month or per year), information support of the price, noticeable contacts for communication with the manager and the usual pop-up form.

<Img
img="/uploads/pop_ap_s_predlozheniem_11ec493171.png"
alt="Pop-up form"
/>

*For example, Hotjar placed an email collection pop-up on their price page. As a result, the company received more than 400 new customers in less than a month.*

3. [**A blog**](https://altcraft.com/blog) is an interesting section of your website that has a high conversion potential. Post useful and high-quality content and convert readers into potential customers. Use a CTA button to do this. You can provide readers with extended content, summary reports, or e-books in exchange for email.

4. **Landing pages** have the highest conversion rates because that's what they're made for. They are needed so that the person who visits them completes desired actions. On average, the conversion rate here reaches 23%. Landing page optimization is simple and very creative. *For example, it is enough to add a video from last year's event to the page in order to optimize its conversion rate. This will increase the interest and desire of visitors to attend this year's event in person. Share with users some free material. At first, make available a preview of the content, and then offer to download the full version.*

## CRO in figures

There is no doubt that CRO is useful for any company that is interested in a strong digital presence. The desire to make casual website visitors into potential buyers and, ultimately, high-quality leads, doesn’t depend on the size and type of your business. Everyone wants it. It remains only to choose an effective optimization method.

Easy to say, not easy to do. Marketers face difficulties already at the stage of setting a conversion goal. “Last month the landing page converted 50 people, next month it should convert 100 people.” What does this phrase mean? When it comes to CRO, it is not about getting 50 extra conversions next month, but about getting 50 conversions for every X number of people who visit the site. In other words, we are not talking about sales in absolute terms, but about the effectiveness of sales, in relative terms.

Conversion rate optimization is not about generating more new traffic, but about getting more out of existing traffic and leads. Here are two formulas to calculate CRO:

1. **Calculate conversion rate**. As we wrote above, you need to divide the number of conversions (leads generated) by the total website traffic, and then express as a percentage.

<Img
img="/uploads/calculate_conversion_rate_cd3de2eb4c.jpg"
alt="Calculate conversion rate"
/>

2. **Calculate the lead goal**. Determine the required number of new customers and divide it by the ratio of attracted customers to their total number.

<Img
img="/uploads/calculate_the_lead_goal_9b26eba51d.jpg"
alt="Calculate conversion rate"
/>

*For example, the website has 10,000 monthly visitors. 100 of them become leads, and 10 people become customers. The conversion rate of this website is only 1%.*

At the same time, it is interesting for a business to receive not 10, but 20 or even 30 customers every month. What to do? You can try to increase website traffic to 20,000 people, and pray that traffic doesn’t drop. However, this method carries certain risks. Or you can go the other way and use conversion rate optimization. It will allow you to “squeeze out” the required number of customers from current traffic.

*Doubling the conversion rate doubles the number of potential leads and customers.*

<Table>
| Company | A | B | C |
| ------ | ------ | ------ |
| Traffic per month | 10 000 | 10 000 | 10 000 |
| Conversion rate | 1% | 2% | 3% |
| Leads received | 100 | 200 | 300 |
| New clients | 10 | 20 | 30 |
</Table>

Have you noticed that along with the increase in the conversion rate, the number of new customers and leads has also increased? And yet the traffic remained unchanged.

It’s like filling a bucket with water: no matter how much traffic you pour into a “leaky bucket”, it will never be full. If you don't fix the cause of the “leak”, you won't improve business performance. So, it's time to start optimizing.

## Conversion Rate Optimization Strategies That Work

Here are 7 CRO strategies your business could benefit from.

1. **CTA in blog texts**. If you manage to overcome the banner blindness of readers, then the practice of using CTA in articles will show itself perfectly.

2. **A/B testing of landing pages**. Landing pages promote close interaction between customers and the company This is where users become leads and then buyers. Use A/B Testing to optimize landing pages. Tests will suggest designs and content that are interesting to visitors. Test different site versions, images, forms, CTAs, buttons to find the best combination.

*For example, China Expat Health was able to achieve a 79% [**increase in conversion rates**](https://techcrunch.com/2021/07/02/79-more-leads-without-more-traffic-heres-how-we-did-it/?hubs_post-cta=blognavcard-marketing) through testing. Among the activities that led to a significant result, it is worth noting the change of the name "Health Insurance in China" to "Save 32% on Health Insurance in China". The effect was backed up by posting real customer reviews.*

3. **MQL without delay**. Some leads are ready to become part of the conversion without preheating. Don’t interfere with them, don’t push them on the typical path of an ordinary lead, but on the contrary, help them. A qualified marketing lead will be interested in thoughtful design, high-quality sales texts, and attractive CTAs.

4. **Automation of the work of your employees**. Among the variety of work processes, there are absolutely routine ones. Such tasks can be taken out of the manual control of your colleagues, which will make their life easier. It's not difficult to do with marketing automation software.

*For example, set up [**automatic sending**](marketing-automation-for-insurance-companies) of messages to subscribers. After that, a potential client with one touch will be able to book a convenient time for him to meet with the manager. You can also set up notifications that the sales team will receive when leads move through the site and take a valuable action (visiting the pricing page).*

*According to statistics, the Open rate of abandoned cart emails reaches 45% ([**Moosend**](https://moosend.com/blog/cart-abandonment-rate-infographic/?hubs_post-cta=blognavcard-marketing) research). In the field of e-commerce, this knowledge definitely needs to be used. After opening an email, 21% of readers click on the link, half of them complete their purchase.*

<Img
img="/uploads/uvedomlenie_o_broshennoj_korzine_786032bf92.jpg"
alt="Pop-up form"
/>

Such letters also can be automated.

5. **Distinguish high-converting website pages**. You need to know the pages of your site with high conversion rates inside and out. And in different ways to communicate with visitors on these pages. If suddenly the user has a question, he should be able to instantly get an answer. For this purpose, use live chat software, various messaging functions, and chat bots. If the user is “stuck” on the page for more than 2 minutes, offer him help through a pop-up window.

6. **SERP for effective articles**. The posts you publish on your blog are sometimes useful to analyze and categorize. There are those who have high traffic but low conversions. Then SEO is needed, or you need to work on the CTA or the content of the article as a whole. High conversion rates for an article are a reason to think about improving the quality of the traffic they attract. To do this, apply to such posts SERP — content optimization for the search engine results page. Don't forget that your blog should contain only relevant information.

7. **Retargeting**. Here's the simple truth. Most visitors leave your website without taking the targeted action. Retargeting from social networks and other platforms will allow you to return some of the "runaway" customers. Retargeting works on the following principle: visitors to your site are “tagged” and then they are tracked. When they visit correlated sites on the Internet, ads pop up that remind them of you. This method works especially effectively for those who have left high-converting pages of the site.

For ads used in retargeting, the same “golden rules” apply. Advertising should be bright, texts should be selling, CTA should be eye-catching, and your offer should be clear, concise and attractive, without puzzles. Then the retargeting tool will work as it should.

*For example, [**United**](https://www.thinkwithgoogle.com/marketing-strategies/video/acquisition-video-marketing/?hubs_post-cta=blognavcard-marketing) launched a retargeting campaign that focused on potential customers who interacted with the company for the first time and were already considering booking a vacation. The target audience was shown with a 15-second video with a CTA at the end. If the client was attracted by the video, he clicked on the button and instantly got to the company's website. The system worked great: 52% of monthly YouTube conversions came from ads from this video.*

## How to take the first step

We invite you to evaluate the potential of the project using **the PIE system**. This simple method will determine the course of action if you are confused.

Each element of optimization is evaluated from the position of three factors:
1. **Potential**
2. **Importance**
3. **Easy**

Score each item from 1 to 10, where 1 is the lowest score and 10 is the highest score.

The following questions will help you to grade:

1. How much improvement will this project bring?
2. What is the significance of these improvements for the business?
3. How much effort will it take to bring the idea to life?

After scoring, calculate the arithmetic mean for each item. Rank items in descending order based on results. The best projects will head the list, and you should start with them.

The PIE system is quite subjective and primitive, but it is simple to understand and implement, and can definitely serve as a starting point at the beginning of CRO.

## CRO FAQ

### What is the goal of CRO?

Companies use conversion rate optimization to increase the likelihood that website visitors will take targeted actions. In other words, the goal of CRO is to increase the percentage of people who complete the targeted action out of the total number of visitors.

### What is a CRO strategy?

A CRO strategy is a set of actions that a business takes to achieve its goal. In simple words, it converts random visitors into potential customers, and then into people who have made a purchase. Each CRO strategy is individual, because it depends on the starting state of the company, key indicators, characteristics of the target audience, and other factors.

Before developing a strategy, do not neglect [**feedback from customers**](how-to-use-customer-feedback-to-increase-sales). Reviews will help you find interesting ways to improve. Conduct A/B tests to find the best combinations of website elements that drive conversions.

### Why are CRO tools needed?

CRO tools are a set of tricks and software that simplify the process of website optimization. Some tools allow you to fully automate CRO, others help with customer acquisition and retention. There are tools that help with analytics, as well as tools that allow you to track the actions of visitors on the site, work with heat maps, collect feedback, or automate tests.

### Why do a CRO test?

CRO tests are carried out to understand how you can change the elements of the site to increase conversion. For example, you can change text, buttons, page design, element layout, colors, and shapes. In this case, your decisions are based on an accurate calculation, and not on personal opinion.



In this article, we talk about what is conversion rate, where is the CRO strategy applied and how does this strategy work.

CRO.png

What is conversion rate, where is the CRO strategy applied and how does this strategy work.

How to Optimize Your Conversion Rate

7 Effective Ways to Optimize Your Conversion Rate

<Img 
img="/uploads/mql_i_sql_e8f1b52ac4.png"
alt="Competitive analysis"
/>

**A lead** is any potential customer who is directly or indirectly interested in your product or service. Each lead is unique. Each of them has its own needs and motives. They are at different stages of making a purchase. You need to know the degree of lead warming up to fix the moment when you need to push the client to the target action. If you rush or be late, you can lose a lead.

In most companies, the marketing department works first with the lead, and then the sales department takes over. The transfer will take place when an MQL becomes an SQL. In other words, when a marketing qualified lead enters the state of a sales qualified lead. Let's talk about this in the article.

## Marketing qualified lead (MQL)

You can determine which category a lead belongs to (MQL or SQL) based on the characteristics and behavior of the client. **Qualified marketing leads** show through their actions that they are interested in your product. Here are a few signs that distinguish them from those who are not interested in your company at all:

- They click a link.
- They browse your site, maybe a few times.
- They use a lead magnet: download a guide, participate in a survey, etc.
- They look through the items and add something to the cart.
- They look for extended information about your company or your product.
- They subscribe to the newsletter.
- They attend a free webinar.
- [**They read your blog.**](/blog)
- They are the first to contact you: they message in social networks, start a dialogue with a chat bot, or order a call back.

Marketing qualified leads stand for **engaged leads.** Remember that MQLs don’t express willingness to buy, although they correspond to the profile of your [**target audience**](creating-a-customer-profile). The company acquires MQLs through search engine optimization, PPC ads on social media, content and email marketing.

## Sales qualified lead (SQL)

**Sales qualified leads** are characterized by a pronounced readiness to make a purchase. They are highly active in promotional events and actively discuss the details of the deal with the manager. SQLs are **proven or promising leads.**

Actions specific to SQLs:
- They visit your site multiple times.
- They read newsletters and respond to value propositions.
- They are well informed about your company and product.
- They are interested in a product demo.
- Ready to discuss [**the cost**](/prices) and talk to the sales rep.
- They contact you on the recommendation of your regular customers.
- They are going to buy urgently or know the exact date of purchase.

## Business must know MQL and SQL

For clarity, let's summarize the differences between MQLs and SQLs in a table:

<Table>
|  | **Marketing qualified lead** | **Sales qualified lead** |
| ------ | ------ | ------ |
| **Position in the sales funnel** | Enter the funnel earlier than SQLs. Occupy starting positions. | Located closer to the peak of the sales funnel. |
| **Lead processing speed** | It is necessary to carry out preparatory work that takes a lot of time before a potential client moves into the MQL category. The same applies to the transition from MQL to SQL: the lead warms up gradually, weeks and months can pass. | Once a user becomes SQL, all processes associated with it are accelerated. It is important to be proactive here: delay can result in the loss of a client. |
| **Number of leads** | In business, there are always more MQLs than SQLs. | Ideally, as a result of well-coordinated marketing actions, each MQL should become an SQL, but in practice this doesn’t happen. |
| **Degree of involvement** | MQLs are just getting to know you and your offer. Compared to SQLs, marketing qualified leads are characterized by a lower degree of engagement and [**loyalty.**](customer-loyalty) | SQLs are more interested in your company, marketing campaigns and product. They are aware that the product can solve their needs. |
</Table>

<Img 
img="/uploads/MQL_and_SQL_03a26e1d04.jpg"
alt="MQL and SQL"
/>

The task of every business is to be able to distinguish between MQL and SQL, because the principle of working with a specific lead depends on it. A spot approach will save you time and money. It is wrong to determine the degree of the buyer’s readiness for the purchase intuitively or with the help of “fortune-telling”.

Get your marketing and sales departments working together smoothly. This will double the effectiveness of the work with leads. Strong business is characterized by a large flow of MQLs, most of which become SQLs. The profit of the company directly depends on this indicator.

In this article, we talk about what SQL and MQL are, how they differ, and why businesses should know MQL and SQL.

mql-i-sql.png

What is the difference between MQL and SQL and why companies need to know them.

SQL and MQL: What They Are and How They Differ

MQL and SQL: What's the Difference

<Img 
img="/uploads/konkurentnyj_analiz_871647e363.jpg"
alt="Competitive analysis"
/>

Entering the market blindly with a new product is a risk for a company. If you encounter a strong player there, the whole business plan will probably collapse and losses will follow. Even if your business has been operating for a long time, you shouldn’t underestimate existing competitors. The only way to stay competitive is to «run faster» than other companies with a similar product, or at least keep up with them. Perfect knowledge of your competitors plays a key role here. To achieve this, you need to conduct a competitive analysis.

Competitor research takes time and resources, but it pays off after all: the company reduces uncertainty, understands better how to grow the business, and makes fewer planning mistakes.

We will tell you what the analysis of competitors consists of: stages and methods, what benefits the knowledge of competitors brings to the business.

## What is competitive analysis

**Competitive analysis** is the research of a company's competitors from the same field to bring products to the market and improve existing ones. The purpose of competitor analysis is to understand the disadvantages and advantages of competitors, their marketing features and development strategies, and then, based on this knowledge, correctly create your own business plan or edit an existing one.

Analysis and evaluation of competitors are regularly carried out to maintain market positions and improve products and services, as well as when launching new products.

What does competitive analysis do for your business:
- Forms adequate pricing.
- Shows the strengths and weaknesses of competitors and your company.
- Find gaps in your business.
- Gives a complete picture of the market where the business operates.
- Predicts negative consequences caused by wrong strategies.
- Shows business trends.
- Finds ideas and opportunities for company development.

## How to look for competitors and what they are

Competitors include all organizations that create and sell the same or similar products. There are three types:

**Direct competitors** are companies that offer similar goods and services to a similar target audience.

**Indirect competitors** work with the same target audience, but offer different goods or services in the same category.

**Replacement competitors** exist outside your product category, but they satisfy a similar customer need. 

### How to find competitors

It depends on the capabilities of the company and the type of business: offline or online, B2C or B2B, etc.

**Search options:**

- analysis of advertising that a search engine shows if you enter a query containing your product or service;
- search queries on your topic in Google or Yandex;
- review sites;
- ratings of companies in the media;
- surveys of your customers;
- maps (for offline business);
- search for competitors on marketplaces.

## How to do competitor analysis:

**1. Set goals and choose the direction of competitive analysis.** For example, a company can research only pricing policy to form its own correctly, or specific product lines. The goal emerges from the problem that the business is going to solve: find the best price, improve the product and promotion methods, etc.

**2. Make a list of competitors for analysis.** It is not necessary to analyze all existing competitors — it is enough to evaluate the main ones. The choice of the number of competitors depends on the resources of the company.

**3. Identify sources for data collection**: company website, public reports, ratings, social networks, reviews and other available channels.

**4. Select competitor research methods**: SWOT analysis, 7P, PEST and others (see below).

**5. Collect data and create a map of competitors.** Include them into a single table to simplify the work. The competitor analysis table includes:

- Company staff and management. 
- Competitor's product features: size, type, packaging, and other characteristics.
- Product line: filling and volume.
- Estimated percentage of market share.
- Product quality and price ratio.
- Competitor pricing and discounts.
- Marketing metrics: site positions, SEO-promotion, strategy, advertising. Brand positioning and corporate identity.
- Channels for attracting and retaining customers: newsletters, gifts, events and others.
- Geography of the competitor: in which countries, regions and districts business operates.
- Unique features of competitors.
- Work of the company's staff.
- Organization of business processes.
- Strengths and weaknesses.
- Customer reviews and positions in industry ratings.

<Note>
Important! Add to the competitor map only the data that is needed to achieve the goal of the analysis.
</Note>

**6. Carry out analysis using one or more methods.**

**7. Draw conclusions and act.**

## Competitive analysis methods

There is no single benchmark for competitive analysis. The company chooses the one that meets the needs. Consider the classical techniques that are used separately and in combination with others.

### Comparison and evaluation 

It is the easiest way. Take a map of competitors and compare your company with each of the list on a ten-point scale and according to the criterion «yes» or «no».

<Table>
| | **Your business** | **Company A** | **Company B** | **Company C** |
| ------ | ------ | ------ | ------ | ------ |
| Product quality | 8 | 6 | 9 | 4 |
| Delivery speed | 5 | 8 | 3 | 10 |
| Customer reviews | 7 | 7 | 6 | 4 |
| Installment | yes | yes | no | yes |
</Table>

### 7Рs

This is a classic marketing scheme consisting of seven parameters:

<Table>
| **Element** | **Description** | 
| ------ | ------ |
| Product | The product received by the end user, its brand identity, characteristics, uniqueness. |
| Price | Pricing policy of the company: retail and wholesale cost, the possibility of discounts. |
| Place | Online or offline platforms, distribution on shelves in offline stores and storage conditions. |
| Promotion | Advertising, [**social media marketing**](self-marketing-how-to-promote-yourself-on-social-media), events, company promotions. |
| People | Company staff who are responsible for sales to the end user. |
| Process | How the buyer and seller interact. |
| Physical evidence | What the customer sees when they buy a product or receive a service. |
</Table>

Each element is described and assessed in a point system.

### Analysis of digital resources of competitors

**What elements are evaluated:**

<Table>
| **Element** | **Description** | 
| ------ | ------ |
| Company website | Clearness and correctness of texts, site navigation convenience. Loading speed and correct operation of elements (for example, subscription forms). How much the site «sells» and SEO parameters. |
| Social media | How the brand leads social media: content, targeted advertising. How to communicate with users in the comments. |
| Advertising | What platforms and what calls to action does the competitor use, what keywords are promoted in contextual advertising. |
</Table>

### SWOT analysis

Comparison of strengths, weaknesses, opportunities and threats is also a classic marketing analysis that is suitable for studying competitors.

As usual, strengths and weaknesses are chosen as follows: company product, finance, staff organization, marketing, the state of production, the company's flexibility, which is responsible for the ability to adapt to change. For opportunities and threats, take into account scientific and technological progress, level of competition, demand for product, economic situation. Each item is described and evaluated on a ten-point scale.

<Img 
img="/uploads/swot_analysis_9fca9cad0e.png"
alt="SWOT analysis"
/>

### PEST analysis

The method evaluates the business of competitors according to environmental factors that affect the company. The analysis finds market trends and can be combined with SWOT analysis.

**What factors are included in the PEST analysis:**

- **Political.** Legal environment of the company’s industry. 
- **Economical.** Economic development, inflation, currency hikes, income and other.
- **Socio-cultural.** Education and age, cultural characteristics, tastes of the audience.
- **Technological.** Technology development, innovation, the role of the Internet in business development.

### Porter's five forces

Porter's five forces model determines the strength of competitors, threats, finds competitive advantages and shows how to choose a niche and position a product correctly.

**What elements does it consist of:**

<Img 
img="/uploads/Porter_s_model_522a645a27.png"
alt="Porter's five forces"
/>

**Threat of new competitors**

If new companies come in with advanced technologies and innovative products, they are likely to «take» the company's customers in the existing market. The possibility of a competitor appearing through the entrance barrier to the industry is assessed.

**Bargaining power of buyers**

Analyze customer requirements for the product, satisfaction with goods and services. With high demands, the company will have to improve quality. Also, the company is affected by the volume of purchases: if the client makes large orders, he can dictate his terms. Especially when there are enough analogues on the market.

**Bargaining power of suppliers**

The business depends on the change in the price of products by the supplier. Analyze the volume of goods deliveries, alternatives and status of suppliers: monopoly or multivariate market.

**Threat of substitute products or services**

The client will change your product for an analogue if it turns out to be a good value for money. Therefore, it’s important to take into account the possibility of the appearance of such goods and create the uniqueness of your product in order to prevent substitution.

**Competition within the industry**

It shows how many players are on the market, the threshold for entering the industry, what conditions each offers, what alternatives there are for the client.

## Competitive Analysis Example

An [**EdTech company**](marketing-automation-for-online-education) is going to release a new online course.

1. **Purpose**: to determine the optimal price of a new product on the market — a course on financial literacy.
2. The list of competitors includes only players whose course cost is more than $300 and who conduct courses online and offline in St. Petersburg. These are companies A, B, C.
3. Sources for finding information: company websites, trial webinars, feedback from participants.
4. Choose SWOT analysis as a method.
5. Make a map of competitors who have a similar course and include only the necessary data:

<Table>
|  | **Company A** | **Company B** | **Company C** | 
| ------ | ------ | ------ | ------ |
| Course format | online | online | offline |
| Course duration | 3 weeks | 4 weeks | 2 weeks |
| Price for the same exchange rate in dollars | 300 | 350 | 330 |
| Minimum discount | 10% | 10% | 5% |
| Maximum discount | 40% | 25% | 30% |
| Availability of installments | yes | no | no |
| Price-quality ratio in points 1-10 | 6 | 3 | 8 |
</Table>

6. Conduct a SWOT analysis of each competitor. On the example of Company A:

<Img 
img="/uploads/SWOT_table_e48a2fe666.png"
alt="SWOT analysis"
/>

7. Draw your own conclusions. For example, during the analysis, it turned out that the course of our company is more informative than that of competitors. There is an option with individual support, which others don’t have. Then it’s reasonable to set the price higher than $700.

## Resume

Competitive analysis is the process of studying competitors to scale a business, eliminate shortcomings in work, and bring new products to market. Business investigates direct, indirect and replacement competitors through available channels: company websites, social media, ratings, reviews, search results, maps and other ways. 

For analysis, a map of competitors is compiled with the main characteristics of their businesses: product, marketing, staff work, prices. Also choose one of the research methods: comparison with evaluation, digital analysis of company resources, 7P model, SWOT or PEST analysis, Porter's five forces analysis. The company uses a convenient method that is suitable to achieve the purpose of the analysis.

Learn more about what competitor analysis consists of: stages and methods, what benefits the knowledge of competitors brings to a business.

konkurentnyj-analiz.jpg

It is important to know your competitors perfectly. The best way to do this is to conduct competitive analysis.

What Is Competitive Analysis, How and Why to Conduct It

Competitive Analysis: When, Why and How to Conduct

<Img
img="/uploads/A_Guide_to_Cohort_Analysis_Why_is_It_Important_for_Marketing_a0af821cf0.jpg"
alt="A Guide to Cohort Analysis"
/>

Immediate return marketing campaigns are a dream of marketers. However, they are possible for simple products that are available for one-click purchase. As for complex and expensive products, their promotional costs pay off longer. How to evaluate the effectiveness of such campaigns? First things first, consider the time factor and detail your customers according to it. If you are wondering how to do it, we are here to tell you about cohort analysis.

## What is cohort analysis

Cohort analysis is an analytical method that involves dividing customers into groups (cohorts) based on certain characteristics and tracking their behaviour within a defined time frame. This method allows one to watch user activity in real time.

A cohort is a group of people who share one or more characteristics:

- an action (purchase, registration, click) that they performed;
- a period within which it happened.

A time reference distinguishes a cohort from a segment, a broader and more general concept.

For example, 2012 and 2018 Harvard graduates are two different cohorts, but they all belong to the «Harvard graduates» segment.

By actions, cohorts are divided into two types:

- Engagement — application installation, first click, registration.
- Monetization — purchase, payment, etc.

The cohort method considers the following features for analysis:

- A shared action for a group of users: subscription, registration, purchase, etc.
- A period within which this action happened: a day, a week, a month, etc.
- A study interval during which the cohort is observed.
- A metric that affects the business: ROI, customer retention, conversion, LTV, etc.

Cohort studies help to understand how key metrics differ for different segments, to see more details on an advertising campaign and other marketing activities (rebranding, testing a new website, etc.).

## How to apply cohort analysis

Cohort study is not a universal method, it requires a sufficient number of users. It is advisable to have at least 1000 users in the database to conduct this analysis. This method is suitable for volume B2C and B2B businesses with a long sales cycle.

### Cohort analysis helps to evaluate:

- **Effectiveness of attraction channels**

Cohort analysis will show which channels bring you the most loyal users. Then the business will allocate a larger budget for effective channels and work with them more actively. A question may arise: Why is cohort analysis necessary if the company can estimate how many clients it has received immediately after the campaign? Well, it is not that simple.

*For example, 2000 users signed up for the service right after they saw Facebook ads. The marketer was happy because there was a result. However, 90% of users stopped logging into the service after a month. At the same time, we attracted users through newsletters. 1000 people came, and only 15% of them stopped using the service after a month. If we had analysed the result immediately after the campaign, we would have decided that Facebook is the most effective channel. But in fact, there was almost no target audience there.*

- **ROI**

For a long sales cycle, the return on investment in advertising is not a quick thing. When it comes to large B2B transactions, real estate, and electronic services that can transform the entire business, it is impossible to make a purchase decision immediately after the first advertisement. So it is necessary to be patient and check the results after a while.

*For example, user K first learned about [**Altcraft Platform**](/en) and visited the website back in January when we had our advertising campaign. It takes time to explore opportunities and make decisions in the company where user K works. Only 4 months later, the user requested a demo from the service team, and 5 months later, the companies signed the contract. If we had calculated the ROI for the month after the campaign, we would have decided that it was a failure. Cohort analysis showed that it was not the case.*

- **LTV tracking and prediction**

LTV (customer lifetime value) calculates the income from the customer for the entire period they use our products or services. This metric shows whether the costs of attracting new customers are justified. When we know how long the user stays with us and how much spends on us, we can calculate this data for similar cohorts.

- **Test results**

Cohort analysis will show how the conversion rate will change in the long term after updates for [**A/B tests**](/features/mvt). It may turn out that a successful element attracted more users but they are not quite target ones: accidentally clicked, signed up, but did not use the service.

- **User activity**

Cohort analysis will help you find out after what time the client stops actively using the product or leaves altogether. It is better to know such details because you can work on them with the user in advance.  

*For example, the analysis showed that 70% of users lose interest in the service after 3 months. In this case, the company needs to pay attention to this period: create a reactivation newsletter, offer a bonus, etc.*

## How to conduct cohort analysis

**1. Define the goal and the metric** associated with it that you will track during the analysis. Metrics are the basis for cohort analysis.

For example:

The goal is to determine the most successful sales channel for a mobile application. Let's consider conversion (registration) as a metric. It is important to consider how the Retention Rate changed in order to understand how many of the registered users remained in the application.

**2. Determine the cohorts that you will study.**

People who signed up for the service in June after advertising on Instagram, Facebook, Yandex and Google are 4 different cohorts.

**3. Analyse different cohorts for a selected time interval.**

Let's consider the result of all four cohorts for 3 months after the month of registration and estimate how many users remained active after registration during each of the months.

<Table>
| **Cohort** | **August** |**September** | **October** |
| ------ | ------ | ------ | ------ |
| Instagram | 50% | 35% | 10% |
| Facebook | 87% | 80% | 76% |
| Google | 46% | 32% | 20% |
| Yandex | 66% | 51% | 36% |
</Table>

Cohort analysis is performed in Google Sheets or Microsoft Excel. However, you will have to figure out how to create the formula for calculating this or that metric in the sheets yourself. In [**Google Analytics**](https://analytics.google.com/analytics/web/provision/#/provision), cohort study is automated but there is a limit for dividing users into cohorts: it is possible to track the first user action within a certain period.

<Img
img="/uploads/cohort_analisys_in_Google_Analytics_fa8d2ec982.png"
alt="Cohort analysis in Google Analytics"
src="Cohort analysis in Google Analytics"
/>

Marketing automation platforms can conduct cohort analysis in a more detailed and clear way. In the Altcraft Platform, cohort analysis is available for cohorts of users who have performed an action within a week or a month. You can view user activity in the report by:

- the number of unique clicks;
- the number of unique openings;
- the ratio of unique clicks to openings;
- the ratio of unique openings to sent messages;
- the number of unique clicks to sent messages.

The data is visualised as a graph and a table.

<Img
img="/uploads/cohort_analysis_in_Altcraft_Platform_96135ee4f1.png"
alt="Сohort analysis in Altcraft Platform"
src="Cohort analysis in Altcraft Platform"
/>

## Examples of cohort analysis

Let's analyse some examples of cohort analysis for different metrics.

### Testing the effectiveness of channels

The goal is to determine which channel is the most effective one in terms of attracting new subscribers for your newsletter. We will analyse 3 cohorts by channels of attraction: a pop-up window on the website, Facebook ads, VKontakte affiliate posts. Each cohort is calculated from March 15-30 — a period for the campaign. 3000 users subscribed to the newsletter from all channels. Most of the users (1600) subscribed after seeing Facebook ads. 5 months later, 782 of all subscribers remained active. Let's have a look at the table to analyse all unsubscriptions during this period.

**In the table, you can see the number of users as a percentage by month who continue to open emails.**

<Table>
| **Channel** | **Subscribers** |**April** | **May** | **June** | **July** | **August** |
| ------ | ------ | ------ | ------ |------ | ------ | ------ |
| Pop-up window on the website | 600 | 70% | 65% | 58% | 41% | 37% |
| Facebook ads | 1600 | 65% | 47% | 29% | 15% | 6% |
| VKontakte affiliate posts | 800 | 88% | 76% | 64% | 60% | 58% |
</Table>

Considering only the first results, we could conclude that Facebook advertising was the most effective in attracting subscribers. But it turned out that these users were not interested in the subscription or subscribed by accident. 5 months later, only 6% of these users still opened emails. VKontakte affiliate posts attracted the highest quality audience of all, 58% of subscribers from this channel continued to read the newsletter.

### Calculation of LTV

The goal is to determine the LTV of users who started to use a food delivery app in 2020. Let's consider 3 cohorts - customers who made their first order in January, February or March 2020. We need to analyse their behaviour within 6 months. Then we will calculate ARPU (average revenue per user) for each customer. Calculations are performed in rubles.

<Table>
| **Cohort/first order:** | **1st month** |**2nd mont** | **3d month** | **4th month** | **5th month** | **6th month** |
| ------ | ------ | ------ | ------ |------ | ------ | ------ |
| January 2020 | 3500 | 2500 | 4000 | 2600 | 1500 | 0 |
| February 2020 | 2800 | 3700 | 3200 | 2900 | 0 | 1500 |
| March 2020 | 4500 | 3500 | 1300| 0 | 0 | 0 |
</Table>

LTV is calculated for each cohort separately or for all users at once.

To calculate LTV, keep in mind the following rule: Lifetime is the period from the beginning of your partnership with the client up to its end.

LTV for a cohort is calculated in the simplest way: add up all the ARPU values over the Lifetime of this cohort. LTV for the January cohort — 14100, February — 12600, March — 9300.

Besides, when calculating LTV using cohort analysis, it is important to consider not only numbers but also the situation in which the campaign was held. The table shows that customers spent more money in March 2020. They started to make fewer orders after 4-5 months. On the one hand, we can assume that advertising campaigns in March were the most successful ones because even those people who had used the app before started to make more orders. On the other hand, there was a lockdown in many regions of Russia, so food delivery became a necessity for many people. Then we can explain the decline in activity by the last months with the same advertising campaigns. When the lockdown was lifted, users began to go shopping themselves again. It is not correct to use this data to forecast LTV for other periods because the situation may change.

**Conclusion: when calculating LTV, it is important to consider not only numbers but also the situation in which the campaign was held.**

### Testing

It is necessary to analyse the results obtained after testing the design of a new section of additional orders in the online store. There are two new designs A and B, and also the old one — Old. They form three cohorts. We are going to analyse CTR (click-through rate) of each of the designs within the period from June 5 to July 11. Next, we are going to analyse conversion from each design over the next 3 months.

<Table>
| **Cohort** | **Clicks** |**June** | **July** | **August** |
| ------ | ------ | ------ | ------ |------ |
| Design A | 150 | 20% | 25% | 15% | 
| Design B | 102 | 36% | 29% | 34% | 
| Design Old | 111 | 34% | 30% | 28% | 
</Table>

As a result, design A received more clicks in the first week. However, its conversion rates were lower than those of designs B and Old. Besides, new designs did not show a significant increase in conversion compared to the old one. So we conclude that the concept of both designs is not the most successful one.

## Conclusion

Cohort analysis is a tool that requires preparation. Marketers need to collect a lot of data and understand which metric to investigate now in order to improve business performance in the future. But the costs are worth the result — a deep and detailed understanding of the company's marketing, proper budget allocation, and effective [**data-driven strategies**](data-driven-marketing).

How to evaluate the effectiveness of such campaigns? Consider the time factor and detail your customers according to it.

A Guide to Cohort Analysis: Why is It Important for Marketing.jpg

How to evaluate the effectiveness of complex  campaigns? Consider the time factor and detail your customers according to it. Cohort analysis will help you with this.

A Guide to Cohort Analysis: What is It and How to Conduct It

A Guide to Cohort Analysis: Why is It Important for Marketing

<Img
img="/uploads/Top_8_Email_Marketing_Metrics_Improve_Your_Email_Strategy_49f8968cd0.png"
alt="Top 8 Email Marketing Metrics: Improve Your Email Strategy"
/> 

Despite the fact that email marketing is one of the oldest forms of [**inbound marketing**](inbound-marketing), it continues to be one of the most effective. There are many reasons for this, including that with over four billion daily email users, it's one of the most practical ways to reach someone. Not to mention that email marketing is incredibly cost-effective — email generates an estimated $42 for every $1 spent, giving it one of the highest returns on investment you could ask for.

However, simply running an email marketing campaign isn't going to automatically translate to success. The key is to monitor your email marketing efforts so that you can continuously adjust and improve your strategy over the long term. The best way to do this is by analyzing your email marketing metrics. With that in mind, the following are eight of the most important email marketing metrics that you should monitor.

## 1. Open Rate

According to research, the average email open rate should be [**between 12-15%**](https://www.campaignmonitor.com/resources/knowledge-base/what-are-the-average-click-and-read-rates-for-email-campaigns/). If your open rate is low, it means your subscribers have no interest in the emails you're sending them and they're not even bothering to open them. If your subscribers aren't opening your emails, then there's no hope in converting them. A low open rate can be indicative of a number of issues, whether it's bad timing, poorly crafted email subject lines, or email subject matter that's simply not relevant to your subscribers.

<Img
img="/uploads/email_open_rate_e65629beb5.jpg"
alt="Open Rate"
/> 

**What is email bounces?**

- A hard bounce occurs when the email you sent is returned as a result of a permanent error. This indicates that the email address was either invalid or your email was marked as spam. If you get too many hard bounces, check spam mail databases to make sure you weren't added. If you were, then you have a problem with your strategy (whether it's the number of emails being sent or the relevance of the content). To prevent invalid email addresses, use a double opt-in form to confirm the right address. Either way, remove hard bounce addresses from your email list so they don't reoccur.

- A soft bounce isn't as severe as a hard bounce. It means that either the email size was too big, the server was down, or the recipient's inbox was full. Simply resending the email at a later date should hopefully solve the issue.

## 2. Click-Through Rate (CTR)

Once subscribers open your emails, you want to make sure that they're engaged with your content to the point where they'll follow any calls-to-action (CTAs) you may have. Your CTR indicates whether or not subscribers are clicking on any of your links or not. If they read your emails but don't click-through to another page (like your website), it likely means that they weren't interested in the content, your CTAs weren't convincing, or the content wasn't relevant to them. 

The average CTR should be [**between 2-5%**](https://www.campaignmonitor.com/resources/knowledge-base/what-are-the-average-click-and-read-rates-for-email-campaigns/). But do not confuse CTR and CTOR (click-to-open rate). How to calculate CTR? Divide the number of users who actually clicked on at least one link by the number of emails delivered. At the same time, CTOR compares the number of people that opened your email to the number that clicked. That's why the average CTOR should be higher — you'd better keep this metric at 10-22%.

<Img
img="/uploads/email_CTR_b206854b0d.jpg"
alt="Email CTR"
/> 

## 3. Subscribe Rate

Your email list is going to naturally decline over time if you don't sign up new subscribers at a regular pace. As such, you need to monitor your email subscription rate. If it's low, it means you need to put more effort into [**building your list**](how-to-build-an-email-database), whether it's via your content marketing efforts, your social efforts, or your paid advertising campaigns. The higher your subscription rate is, the bigger your pool of potential leads becomes.

## 4. Unsubscribe Rate

The last thing you want to see is people unsubscribing to your email list. However, monitoring this metric is critical to identifying serious problems with your email strategy. A high unsubscribe rate may mean that you're attracting poor quality leads — or that your email content just isn't relevant to your audience.

<Img
img="/uploads/unsubscribe_rate_50b468768b.jpg"
alt="Unsubscribe Rate"
/> 

## 5. Email Conversion Rate

Your conversion rate tells you how effective your emails are at converting leads. You can compare the conversion rates of different email campaigns, landing pages, CTAs, types of content, and more to determine what types of emails convert highly and what emails don't to help you plan future email campaigns. How to calculate email conversion rate? Divide the number of people who completed the desired action by the number of total emails delivered. And then multiply the result by 100.

## 6. Opening Time

The opening time shows you when your subscribers are opening your emails. If you notice that the majority of subscribers open your emails in the evenings — and you've been sending out your emails in the afternoons, then you can adjust your strategy to send out your emails closer to when your audience is opening them. Doing so can help boost your open rate and allow you to reach more of your subscribers at the right time.

## 7. Time Spent Viewing Email

This email marketing metric is only useful if you're attempting to engage your readers via your emails. It's not a useful metric if your emails are only a couple of sentences long since your subscribers won't spend much time on them. However, if you send longer articles, knowing how long subscribers spend viewing your emails will be helpful. If they are spending a lot of time on your email, it means the content is relevant and engaging. If they don't, it means it's not.

## 8. Active Audience

The active audience metric shows you how many subscribers on your list are actually active. A subscriber that hasn't opened an email from you in months can be considered inactive. You'll want to remove subscribers who are inactive for long periods of time from your email list every three months or so. If you leave them on, they'll negatively affect all of your other metrics, making it difficult to analyze them effectively.

## Conclusion

Email analytics are crucial to any successful email marketing campaign. You're going to find that there are hundreds of different email metrics out there that you can monitor. Some may be more useful to you than others, but these are a few of the absolute essential email marketing metrics that you should track. Be sure to contact us at [**Altcraft Platform**](/en) for information about our powerful real-time analytics tools.

Here's a list of the most important email marketing metrics that you should analyze. This way, you can continuously adjust and improve your strategy.

Top 8 Email Marketing Metrics: Improve Your Email Strategy.png

The best way to monitor your email marketing efforts is by analyzing your email marketing metrics. Here's a list of the most important metrics that you should care about.

8 Key Email Marketing Metrics Every Marketer Should Track

Top 8 Email Marketing Metrics: Improve Your Email Strategy

<Img
img="/uploads/Lead_Scoring_c068e89b5d.jpg"
alt="Lead Scoring"
/> 

There are no companies that have unlimited funds. When there are more customers' requests than managers can process, a collapse happens. What is the usual way to solve this problem? Managers call customers according to a list. Customers can be sorted by the date of their request or, for instance, alphabetically. But what if that very customer who is ready to make a purchase has a surname starting with the last letter of the alphabet. In that event, such a customer will get a phone call when another company is already rendering services to them. What should be done to avoid such scenarios? It is suggested that lead scoring should be employed in your marketing. It will allow you to prioritize your customers by their importance. In this piece we are getting into the notion of scoring, why and how this method is used in business.

## What is lead scoring

The scoring system originally appeared in banks to assess a client who applies for a loan. Banks examine their customers' paying capacity, credit record and other aspects. According to the collected data every customer gets their own credibility rating. This practice was later borrowed by marketers.

In marketing, lead scoring is ranking leads by certain features that determine their value.

In this term,

- **lead** stands for a prospective customer
- **scoring** stands for ranking a customer and giving them special points.

In layman's terms, lead scoring allows you to determine whether a client is ready to close the deal or not.

Each client receives a scoring point for some action: visiting a website, subscription and so on. These special criteria are chosen by the company before scoring. Then the points are summed up and a scoring rate is obtained. According to it, a company determines which customer is more important. The higher the score, the more likely this customer will make a purchase. After that, managers contact other customers, whose score is lower.

To make the process clear, all leads are divided into several categories.  The easiest way to do it is to classify all leads by their degree of «warmth»:

- **«Cold» leads** do not know much about the brand. They have just started to interact with it: clicked on the ad, visited a website, signed up for the newsletter. It is unlikely that such a person will buy something right after the manager's call.
- **«Warm» leads** are a bit closer to making a purchase, they have the need to do it. However, they may have some doubts. Or, such a person chooses between several options.
- **«Hot» leads** are those who are ready to make a purchase here and now. All you have to do is to remind them about it and make a favourable offer.

<Img
img="/uploads/classification_of_leads_b8f7877b25.jpg"
alt="Classification of Leads"
/> 

Another way of ranking your customers is to picture them in terms of a funnel:

- **At the top of the funnel** are the users who have just become acquainted with the brand: signed up, subscribed to social networks or newsletters.
- **The users who have shown their interest in the product**: got a lead magnet, and are actively interacting with the brand.
- **The proven leads that have been forwarded to the sales department.** Marketing has already worked with them and «warmed them up» enough. They are almost ready to make a purchase, but their objections need to be worked out.
- **Leads at the bottom of the funnel are those who are ready to buy something here and now.** These users have already explored the ways to order a product and/or added some items to favorites or to cart, but have not completed the order yet.

In both of these categories, the most important ones are those leads who are ready to make a purchase: «hot» leads/leads at the bottom of the funnel. Lead scoring will help to identify who is who on the basis of data, and not on such abstract thoughts as «these leads are more important because I think so».

## Why do you need lead scoring

Lead scoring saves businesses from wasting resources:

- human ones — it saves the time of a manager who calls irrelevant customers in vain;
- financial ones — the salary of this manager and the cost of the channels to communicate with customers.

You need to employ a scoring system when:

**Your business has a long purchase cycle and a complex system of working with clients.** When it is not quite clear which client is more important, and a lot of criteria should be taken into account.

**When your company has a large influx of incoming requisitions, and managers cannot cope with them.** Even if there are no urgent matters yet, there may come a moment X, when there are not enough resources. Lead scoring will help to prevent such a situation.

**When a specialist who processes the requests is a high-skilled one.** If such a specialist wastes their time, the company invests more in the employee than it gains.

## Lead scoring also helps to:

### To evaluate the effectiveness of customer acquisition channels

If a channel brings you thousands of leads, it is not effectiveness yet. Out of a thousand requests only ten people can actually make a purchase, and CAC will not pay off. Quality assessment of your leads will show which channel actually brings you profitable ones.

### To decline irrelevant requests

Not everyone who has responded to your marketing efforts will be your customer. Some will say that your products are too expensive, others will not understand the offer. Besides, some people can click the links accidentally. Scoring identifies unsuitable leads before you start actively working with them and assigns them the lowest priority.

### To optimize your work

Without lead quality assessment you can be trapped in one opinion, that is of your supervisor who thinks that these customers are more important than those customers, and it cannot be the other way round. Even employees themselves do not always know which customer will be more valuable. Scoring will help you to evaluate leads objectively basing on analytics. This approach will establish order in the joint effort of marketing and sales department. It will always be clear with what kind of client your manager works, whether their interest needs to be heightened or you can offer them to purchase something immediately. With proper evaluation of leads, one department will not do the work for another.

### To evaluate your managers' work fairly

It may be that some managers are doing their job better than others. And it is not always about efficiency and skills. If one manager always gets «cold» customers and the other one always gets «hot» ones, it will be easier for the latter to close sales. Scoring is an opportunity to redistribute leads more fairly.

The main benefit of scoring is a rise in profits of the company, which will no longer lose «hot» leads and learn how to optimize the work of employees.

## How to conduct lead scoring

For scoring, you need to describe what kind of lead is of good quality for your business. Besides, you need to determine the evaluation criteria, establish a certain value for each, and then conduct the evaluation.

<Img
img="/uploads/how_to_conduct_lead_scoring_beb05c00ed.jpg"
alt="How to conduct scoring"
/> 

### Step 1. Determine the criteria

Two types of data are usually distinguished. Explicit — external information about customers: their characteristics or data of companies where they work. Implicit — a customer's actions that a company can track on its platforms. All data is grouped into a customer profile. It is a kind of benchmark with which you will compare your leads during evaluation.

What criteria can be used:

**Demographics** — gender, age, interests, habits and other features of your audience. If your audience are men over 35 who have cars, a person who does not own a car will be a lower priority in your evaluation.

**Information about company** is relevant for B2B, when your customer is a business representative. You can include place of employment, position, size of the company and its industry in your criteria. For in-depth evaluation, you can add a customer's experience, income of the company and its location (if it is important) to the list.

**Users' behaviour**: how they interact with ads and newsletters. For evaluation, the number of clicks per user, subscriptions, information requests, lead magnet downloads, sending contact information and even attendance at online brand events are taken into consideration. Users' «last seen», their reaction to advertising campaigns and posts on social networks are also examined.

**Data quality.** Sometimes a customer can turn out to be a spammer or an agent of dishonest competitors who want to spoil your statistics with their actions. So, leads with incorrect, false or insufficient data find their way into your database. For example, a set of random characters instead of an email address is a sign of spam. Besides, poor quality leads are those who have left a personal email instead of a corporate one, though the information is for corporate customers.

### How to understand which criteria are really important

**First of all**, ask your employees to arrange a brainstorming session or to conduct a survey. Salespeople work closely with customers and know their needs well.

**Secondly**, ask your customers themselves what influenced their decision to buy.

**Thirdly**, focus on the analytics and see which customers bring you more profit. It is useful to employ [**attribution**](marketing-attribution-models).

### Step 2. Determine values

Each criterion should have its own weight on a selected limited scale. The higher weight will be given to the criteria of more profitable leads, whose conversion rate is better.

For example, we know that customers with higher education purchase twice as much on average as those with secondary education. In this case, the lead with higher education gets a higher score.

Negative criteria (minus values) are also important. Even the highest quality lead can «burn out» and stop being active.

Minuses in the scoring should be given for:

- unsubscribing from the newsletters;
- visiting a career page on the website: a person may hunt for a job and is not going to buy anything from you;
- a lead's position or industry does not fit your customer profile;
- a lead is from a competing company;
- low activity — a person stopped clicking on your newsletters.

### Step 3. To conduct evaluation

You have criteria, you have points. Now it is time to evaluate. But you should start with threshold values. Determine from what number of points your customer is assigned a low, medium, or high priority.  Do not over- or underestimate the values. Start with an average one and adjust it in the process.

Scoring can be conducted by one manager or a team. In case of the latter, the points of all participants in the assessment are summed up. At the end of evaluation, customers are ranked from higher priority to less valuable ones.

**Example of customer evaluation**

Let's imagine a prospective customer N, who has left their data.

Now let's set priorities according to the number of points:

High — 15–20 points.

Medium — 10–15 points.

Low — up to 10 points.

The maximum score a customer can get is 20.

Below you can see an example of a simple table with customer’s evaluation.

<Table>
<table>
      <thead>
          <tr>
              <th>Criterion</th>
              <th>Status</th>
              <th>Score</th>
              <th>Concordance (+)</th>
          </tr>
      </thead>
      <tbody>
           <tr>
              <td>Email</td>
              <td>Corporate</td>
              <td>+6</td>
              <td>+</td>
          </tr>
           <tr>
              <td></td>
              <td>Personal</td>
              <td>+1</td>
              <td></td>
          </tr>
           <tr>
              <td></td>
              <td>Not stated</td>
              <td>-2</td>
              <td></td>
          </tr>
           <tr>
              <td>Phone</td>
              <td>Stated</td>
              <td>+3</td>
              <td>+</td>
          </tr>
           <tr>
              <td></td>
              <td>Not stated</td>
              <td>-1</td>
              <td></td>
          </tr>
           <tr>
              <td>Position</td>
              <td>Supervisor</td>
              <td>+6</td>
              <td></td>
          </tr>
           <tr>
              <td></td>
              <td>Manager</td>
              <td>+3</td>
              <td>+</td>
          </tr>
           <tr>
              <td></td>
              <td>Other</td>
              <td>+1</td>
              <td></td>
          </tr>
           <tr>
              <td></td>
              <td>Not stated</td>
              <td>-3</td>
              <td></td>
          </tr>
           <tr>
              <td>Company</td>
              <td>Stated</td>
              <td>+3</td>
              <td>+</td>
          </tr>
           <tr>
              <td></td>
              <td>Not stated</td>
              <td>-2</td>
              <td></td>
          </tr>
           <tr>
              <td>Activity</td>
              <td>Subscribed to newsletters</td>
              <td>+2</td>
              <td></td>
          </tr>
           <tr>
              <td></td>
              <td>No subscription</td>
              <td>-1</td>
              <td>+</td>
          </tr>
           <tr>
              <td></td>
              <td>Unsubscribed</td>
              <td>-2</td>
              <td></td>
          </tr>
           <tr>
              <td colSpan = 3>Total score</td>
              <td>14</td>
          </tr>
           <tr>
              <td colSpan = 3>Priority</td>
              <td>Medium</td>
          </tr>
      </tbody>
  </table>
</Table>

## Tools for lead scoring

Lead scoring can be conducted in two ways:

**A simple but time-consuming one**: Google Sheets or Excel. In this case, you will have to calculate the results manually or set up formulas, which is quite time-consuming. You will also have to transfer all your customers’ data into sheets/tables.

**An automated one**: marketing platforms make it possible to conduct lead scoring simply and quickly. [**Altcraft Platform**](/en) is no exception.

The platform pixels track users' activity on company resources and third-party resources: websites, social networks, blogs, mobile apps and services in the browser, even the company's CRM.

Each action counts as a target for which a certain value or weight is assigned. Lead scoring is conducted according to these values. On our platform, you can track data on anonymous profiles, which will be later added to a user's official profile.

## Conclusion

Companies dream of streams of clients, but once the dreams come true, they cannot handle it sometimes. Prioritizing customers by their value during peak times is a sensible approach. Although it is better to foresee certain situations to prevent a disaster, such as lost customers, downgrade of service and even employees' nervous breakdowns. Everything is possible if you do not arrange work properly.

Lead scoring helps to optimize different processes and not to waste time on unprofitable customers, to coordinate the work of the marketing department and the sales department, and as a consequence, to earn more.

In this piece we are getting into the notion of scoring, why and how this method is used in business. Learn how to conduct lead scoring.

Lead Scoring.jpg

Lead scoring helps to optimize different processes and not to waste time on unprofitable customers and to coordinate the work of the marketing department and the sales department.

Why Do You Need Lead Scoring and How to Conduct It

Lead Scoring: What Is It and Why Is It Useful for Marketing

<Img
img="/uploads/top_digital_marketing_metrics_6028daab69.jpg"
alt="8 Top Digital Marketing Metrics to Track"
/> 

When we speak of marketing in the digital age, we no longer mean the vague feel-good awareness and light branding that we used to consider effective marketing. The digital age has made it necessary to employ highly scientific methodologies informed by very keen insights gained from the measurement of specific marketing metrics to track and predict business trends and patterns.

Marketing campaign metrics, also known as KPIs (Key Performance Indicators), are vital for monitoring and planning marketing initiatives and seeing how we might optimize them for best results. They form a sound base of knowledge by which marketers B2B business owners can formulate and implement all their business decisions.

Current technology makes it possible to automate many of these marketing functions. Even so, it will be helpful to understand the various types of digital marketing metrics and how they might be relevant to your business, which we’ll be getting into in this piece.

## 1. Return on Marketing Investment (ROI)

This is one of the most important marketing metrics today and refers to the calculation of how much value your marketing efforts generate. You will find your ROI by subtracting your marketing budget (social media, email, digital, print marketing, etc.) from your increased revenue or profit growth. The importance of determining this metric is to help executives decide how much they should spend on ongoing or potential future marketing campaigns.

A campaign with a negative ROI will need to be redesigned or completely shut down, while positive ROI campaigns should be extended or even expanded.

Any campaign with an ROI standing at or over 5:1 is considered particularly strong for most industries. Marketing departments will find this a powerful tool to help them justify their spending and compare what they are doing with competing organizations or brands.

<Img
img="/uploads/ROI_05d6172f15.jpg"
alt="Return on Marketing Investment"
/> 

## 2. Customer Lifetime Value (CLV)

The digital marketing and e-commerce landscape offer tight margins for profit in these hyper-competitive times, which is why companies need to find ways of maximizing their market share and revenue streams.

One of the essential metrics for marketing effectiveness is the Customer Lifestyle Value metric. This seeks to establish how much value in terms of purchases spanning their entire lifetime as a customer they represent to the company.

If, for example, a client makes purchases totaling $5,000 over the whole course of their relationship with you and you’ve spent approximately $1,000 in advertising and service costs, then the client’s CLV will be equivalent to $4,000.

The idea or usefulness of this marketing measurement is that it can give you insight into which clients to focus on when trying to maximize value, encourage growth, and maximize profits. Rather than seek out new clients in hard-to-penetrate markets, it makes more sense to develop your existing customer base.

<Img
img="/uploads/CLV_8d429d7611.jpg"
alt="Customer Lifetime Value"
/> 

## 3. Customer Acquisition Cost (CAC)

Here, an organization tries to estimate what it costs them to get a new customer or client for their goods or services. This KPI marketing metric is determined by calculating the total cost of your advertising, sales, and marketing department expenses and all related expenses divided by the number of new clients brought on board.

It is a valuable measure to determine for a business since a low cost of generating leads and subscribers will mean that it will cost you little to acquire new clients and thus generate more significant revenue and profits.

This metric has come about in recent years with the advent of the internet age, whereby consumer behavior can be tracked more efficiently, which has allowed organizations the tools to help them determine where to invest their money.

<Img
img="/uploads/CAC_e0ae67dea4.jpg"
alt="Customer Acquisition Cost"
/> 

## 4. Click-Through Rate (CTR)

This is one of the most valuable metrics for determining the effectiveness of an advertising campaign in the digital landscape. You will measure the click-through rate by considering the number of people who clicked on a link on your email or website after seeing it on their screen. If, for example, 100 people see your advertisement but only ten people click on it, then your click-through rate will be 10% (Ad Clicks/ Ad Impressions * 100).

When you have a high click-through rate, you can deem your advertisement or marketing strategy a success since a good proportion of the people exposed to your adverts are interested enough to click on it and potentially go on to become customers.

By analyzing this metric, you will determine which adverts need to be changed and which are effectively drawing in leads and potential clients. Even though this is a general rate, it still gives a beneficial picture of your target market’s behavior and ranks high on the list of examples of marketing metrics.

<Img
img="/uploads/CTR_4cc621023e.jpg"
alt="Click-Through Rate"
/> 

## 5. Funnel Conversion Rate

Any helpful marketing metrics list will include the [**Funnel Conversion**](conversion-funnel-stages-and-optimization) Rate. Before a potential lead is converted to a customer, they will go through certain phases. These phases can be pictured in terms of a funnel, and this is because the number of people per stage will start off being much larger than it will be when they finally become your clients.

You can calculate your conversion rate by taking the Total Sales Numbers/ Number of Leads * 100. If you had 100 clicks, inquiries/leads but only 30 people made purchases, in the end, your conversion rate will be 30%. In the e-commerce world, this is a very healthy conversion rate, with most businesses reporting conversion rates of 2-3%.

This might seem like a tremendous waste, but the digital marketing world adjusts to this reality by maximizing the spread of their advertising reach at the least cost possible so that even such conversion rates translate to substantial customer numbers. Even at a 2% conversion rate, for example, a company with 10 million leads in a month will have 200,000 clients, which might be more than enough for them to make healthy profits. 

## 6. Cost per Action (CPA)

This refers to an affiliate marketing model whereby payment is triggered whenever a targeted user performs a particular action. Such actions vary widely in nature and may include purchase, a click, a subscription, signing up for a trial, filling a survey, making a download, and more.

This model is often referred to as Pay-Per Action (PPA) or Performance-Based Advertising since an advertiser will only have to pay once their desired action is completed. Such models call for significant conversion rates to make financial sense in most instances.

This is why most small to medium-sized businesses will utilize Cost-Per-Click (CPC) or Cost-Per Impression (CPM) Models, where low conversion levels will not be too harmful to profitability. This metric directly monitors how much a company invests in driving a particular action they desire. It is usually reported at monthly intervals.

<Img
img="/uploads/CPA_92e9a721c4.jpg"
alt="Cost per Action"
/> 

## 7. Bounce Rate

In the simplest terms employed by Google themselves, website bounce rate refers to the percentage of single-page or single interaction sessions your website experiences. Here, visitors will land on a page but leave without clicking on anything or interacting with it in any way. This is why it is referred to as a ‘bounce.’

[**Email marketing**](pay-more) metrics include bounce rates that refer to the percentage of emails on a marketing campaign list that the intended recipient does not see because their server turned them away.

While email campaigns might be considered high ROI advertising methods due to their low costs, high bounce rates can still render them completely ineffective. Analyzing the bounce rates experienced by your website or email landing pages will give you a good measure of how engaging these pages are, giving you an idea of where you might need to improve.

Fixing high bounce rate issues to achieve optimal performance in marketing takes a good deal of analysis and attention to determine what is putting people off. You will need to consider your presentation, prices, site structure, email copy quality, website design, and so on as you troubleshoot the matter for practical solutions.

## 8. Net Promoter Score

This is a very widely used marketing metric that focuses on [**what customers think about your product**](how-to-use-customer-feedback-to-increase-sales) or service and whether or not they would be willing to recommend it to their family, colleagues, and friends. In most instances, the search for this information will utilize a single-question survey offered to clients.

The survey will ask the customers to choose a number ranging from -100 to 100, whereby negative numbers will indicate a negative attitude towards the company, while positive numbers show a favorable opinion.

A 100 answer will show that the customer has the highest view of the company possible, and vice versa. A Net Promoter Score is now arrived at by taking the average of these individual survey answers to achieve a reliable picture of how customers view the company in general and their willingness to recommend its services and products to others around them. Altcraft Platform has its own tool for creating NPS surveys — [**Forms**](/features/forms-and-surveys).

This marketing measurement is a handy one as it can give companies a warning when their customers are becoming unhappy to implement changes before they lose their clients completely.

## Final Thoughts

There are many key marketing metrics out there that can be used to analyze and monitor business initiatives and marketing performance. With advances in data gathering technologies and statistical methods, they keep growing in number.

To stay ahead of the pack, you must gain a deep understanding of what are marketing metrics and stay abreast of the developments occurring in this field. This is especially true if your work relates to in some way or relies on digital marketing.

By keeping track of your social, consumption, sales, and lead generation marketing metrics, you can keep your finger steadily on the pulse of your organization’s health. Our powerful [**marketing automation tool**](/ru) can help you achieve this simply, efficiently, and effectively. Give it a try today. 




Marketing metrics can help you better understand your business processes. ROI, CTR, CAC, LTV — learn more about how to calculate KPI in marketing.

top-digital-marketing-metrics.jpg

Marketing campaign metrics are vital for monitoring and planning marketing initiatives and seeing how we might optimize them for best results.

8 Key Digital Marketing Metrics | Important to Track

8 Top Digital Marketing Metrics to Track

<Img
img="/uploads/conversion_funnel_1f41a22aa2.jpg"
alt="Conversion Funnel: Stages and Optimization"
/> 

Conversion funnel analysis isn’t the most discussed digital marketing topic. But it may be one of the most important.

Funnel analysis helps you ensure that you are successfully moving prospects, leads, and customers forward as their relationship with your brand deepens. Each category of contact has its own conversion actions, such as subscribing to your email marketing list. These different actions are all considered within your digital marketing conversion funnel.

Your funnel conversion rate – also known as the sales funnel conversion rate or digital marketing conversion rate – is one of the most important metrics you can track and improve over time. It tells you how much raw traffic from each audience segment is taking the next steps necessary to ultimately become a customer.

But no simple conversion funnel template is enough on its own to understand how it all comes together.

With every small tweak in conversion funnel optimization, you make more money from your existing traffic. Once your digital properties are established, funnel optimization is often the activity that will get you the most bang for your buck. Let’s take a closer look at funnels, funnel metrics, and how to optimize conversion funnels.

## What Is a Conversion Funnel?

Funnels function to organize and conceptualize your goals for each stage of the [**buyer journey**](stroim-customer-journey-map), moving your new traffic from the prospect stage to the lead stage and finally the customer stage. 

A standard digital marketing funnel comes in three stages. At each stage, the contact needs more sophisticated content to take the next step. With that in mind, a large amount of traffic may enter the funnel, but only a small amount will reach the bottom, where the conversion from lead to customer takes place.

## The Stages of a Conversion Funnel

A standard digital marketing conversion funnel has three stages:

<Img
img="/uploads/example_ceadbbe5c2.jpg"
alt="Conversion funnel example"
/> 

### Top of the Funnel (ToFu)

All the traffic received by your website and your digital properties begins at the top of your conversion funnel.

At the top of the funnel, most visitors have just identified a problem. They need further information so they can understand the issue they’re facing. They have no idea what solutions may be relevant to their situation or the remedial steps they might need to take.

To serve prospects at the top of the funnel, you want to be sure you have plenty of “evergreen” content. This is general content that introduces subjects pertinent to most of your first-time visitors. Buyers use it to gain basic knowledge about the problem they have encountered and why it might be happening.

ToFu content has an important role to play in ensuring you are highly visible for search queries relevant to your business. The conversion goal of ToFu content is usually to get those early visitors to subscribe to your [**email marketing list**](how-to-build-an-email-database). This conversion is achieved by offering a high-quality piece of content, a lead magnet.

### Middle of the Funnel (MoFu)

In the middle of the funnel, the prospect has developed into an unqualified lead.

Joining your email marketing list is a way for prospects to raise their hand and indicate they have real interest in your content. However, you don’t yet know enough about them to be sure that they will be the right customer for your business.

Where ToFu content serves a general educational purpose, MoFu content is much more specific. Its aim is to help the newly minted lead develop buying criteria around the solution that will put an end to their problem. It does not propose a specific solution, but instead provides guidance on what all good solutions must include.

### Bottom of the Funnel (BoFu)

By the time they reach the bottom of the funnel, a lead should be well qualified. The right leads are [**almost ready**](communication-building) to be passed off from marketing to sales. Much of the buyer journey is over, and the lead is looking at a small handful of potential solutions – if you’ve done everything right so far, then yours is positioned to succeed.

BoFu content includes things like videos and product demonstrations. This content answers leads’ questions about whether your solution will work well within their specific business context. They are no longer looking for which solution is best, but which one is best for them.

## How to Optimize a Conversion Funnel

Conversion funnel optimization requires sound analytics [**data**](data-driven-marketing). That's why using a [**marketing automation**](what-is-marketing-automation-and-how-it-affects-business-development) platform is a good way to go. With such platforms, you will easily collect all data in one place and calculate the conversion rate for your specific audience. For example, in Altcraft Platform you can customize the conversion goals of each stage in the funnel, including things like a subscription or visit to a certain screen on your mobile app. Develop customized conversion funnels that match your unique business needs!

A conversion funnel is a visual representation of the stages in a buyer's journey, from the moment they visit your website until they make a purchase.

conversion funnel.jpg

Conversion Funnel: Stages and Optimization

How the Conversion Funnel Works From Top to Bottom

uzum-case.png

Reduced push notification opt-out rates, increased OR, saved working hours

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The open rate for automatic Viber messages is around 60%, and MAU growth for the year is +19%

All user information is systematically collected in a unified customer data platform

Distributing messages across various communication channels: email, SMS, push notifications, messengers

Promo codes, bonuses, and points for building long-term customer relationships

You can create and edit any HTML template, as well as save your own custom blocks

Personalized distribution of messages to clients through communication channels

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The ability to communicate with your clients anytime and anywhere

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