As a CPA (Accountant) and a Google Analytics student, I get pretty jacked up about the fact that I can combine both skillsets and use Goal Values to help me calculate the return on investment (ROI) of any digital marketing endeavor that our team pursues and ensure that our marketing investments are generating the greatest return for our clients. I walked through the general idea of calculating the overall ROI of our digital marketing activities in my last post. Today, I’m going to focus on the important concept of determining the Goal Values in Google Analytics.
ROI = (Increase in Total Goal Value of Both Micro and Macro Conversions – Cost of SEO Campaign) / Cost of SEO Campaign
The ROI equation tells us that determining dollar values for our micro and macro conversions is the foundation for evaluating our digital marketing effectiveness.
Let’s continue to use our medical practice from the previous blog post; however, understanding that these principles can be applied to any type of business. The goals we identified for this medical practice are:
- Contact Us Form Submission
- Click to Phone Call
- Appointment Scheduled Online
We know these are the goals we want to drive consumers to complete on our website, but how do we determine the appropriate value for each of these goals so that we can calculate our ROI?
Calculating Your Goal Values
Now that we have identified our goals, with the Appointment Schedule Online being the macro conversion as this is the ultimate goal of users to the website, there are a few different ways our medical practice can determine their goal values.
Track your conversions in a CRM
If someone visits your website and submits a lead, makes a phone call, or schedules an appointment, this information should be input into your CRM system. We must ensure to mark it uniquely as “online_lead”, “online_call” (setting up call tracking will be helpful here), and “online_appointment” or something similar that helps you identify the source of the patient. Now wait 60-90 days and determine the value of these online conversions to your business. Let’s look at determining the goal value of the Contact Us form Submissions, the calculation is an easy one:
Goal Value = (Total revenue derived from Contact Us Form Submissions) / Total number of Contact Us Form Submissions
For example, let’s use the following data:
- Total medical revenue after operating cost per patient is approximately $144
- The medical practice received 150 form submissions over the course of 90 days.
- Of these 150 potential patients 100 became actual patients.
Goal Value = ($144 x 100) / 150 = $96
Now we know that the value of Contact Us Form Submission on the website is approximately $96. However, we should continue to track leads through our CRM and adjust our goal value to reflect actual results as often as possible because as the medical practice changes and we become more efficient, these values may increase and we want to ensure that we are accurately reflecting any changes in the business within Google Analytics. We would apply this same methodology to the other two goals that we’ve set up as well.
Use Your Macro-Conversions as a Basis
The macro-conversion in our example is the Appointment Scheduled Online as this has a strong positive correlation with patient income. We know that the net revenue per patient is $144; therefore, this is the goal value that we will assign to our Appointment Scheduled Online goal. If we haven’t been tracking our patients in our CRM that allows us to use the first method above, we are going to have to use some intuition to come up with the goal values of the two micro-conversion (Contact Us Form Submission and Click to Phone Call).
Talk to your team and whoever handles potential patients and use their historical knowledge to come up with a value for these other two goals. We know that the maximum value of a patient is $144 and based on our years of experience we know that about 60% of contact form submissions and 75% of phone calls result in patients scheduling appointments. Thus, under this method our respective goal values will be:
- Contact Us Form Submission: $144 x 60% = $86
- Click to Phone Call: $144 x 75% = $108
You’ll notice that the goal values are different under each of the above two methods—that’s because determining your goal values isn’t always an exact science and is also a continuously evolving activity based in the current circumstance of your business. Even if you feel that you are unable to get exact values for your leads through the use of your CRM it is important to begin the process of assigning goal values so that we can calculate ROI and begin assessing the effectiveness of our digital marketing efforts.
There are several other resources out there to assist you in the process of establishing goal values including a fantastic one from Avinash Kaushik.
My next post will start to dive a little deeper into the analysis of calculating ROI as we take a look at utilizing Multi-Channel Funnels and Attribution Modeling.