My Life in Modelling (outcomes).


Published: 07 January 2016 OK, so this article is maybe not a tale of the catwalks of Milan or Paris but is instead my guide, based on my experience, in how we use top level modelling in digital to plan outcomes and derive strategies and tactics.

The current digital marketing manager has an arsenal of weapons and statistics at their disposal from behavioural targeting and personalisation, geo-targeting (53% more people engage with hyper-targeted ads), mobile apps (a third of us use our smartphone within five minutes of waking) and creative content (35% of travellers engage in travel-related videos as part of their purchasing process) and so it’s often easy to get stuck in a rut of ‘work a day’ SEO and PPC with content decisions coming from the last Director to say ‘we need a page about x’ and no real sense of daily/weekly/monthly/annual targets or KPIs.

The approach that we have developed flips this on its head by starting at the end, namely, what do we want to achieve as a tangible, measureable (or SMART) objective? 10,000,000 in online sales a month, 500,000 contact enquiries a year, or 1 demo request a month? Whatever business you’re in, whatever type of website you have there will be a call to action and a primary objective - the mother of all objectives, the top table objective, the one that you will bring up in your next appraisal if you smash it (well, you should!).

Start with this and work back through the common denominators - how many people currently convert as a percentage (e.g. 1 in 1000 is 0.1%) and how much traffic or engagement do you need to convert at this rate to hit this? Once you’ve got this you’ve got the basis of the model and the target. If you’re an ecommerce site then factor in Average Order Value too.

Sample model equations:
Ecommerce Revenue: (Traffic x Conversion Rate) * Average Order Value = Revenue
Sales Leads: Unique Sessions * Conversion Rate = Enquiries

Once you’ve established the right equation, you can then play with the constituent parts to find a realistic balance to get the right outcome.

Working with our ecommerce example we will use a relative simple model and we’ll look at two possible models:

(1,000,000 visits * 1% Conversion Rate) * £100 AOV = £1,000,000 Revenue
(500,000 visits * 2% Conversion Rate) * £100 AOV = £1,000,000 Revenue

With this knowledge in mind, we then need to see where we are what the gap is. You might find you’re happy with your conversion rate but need a lot more traffic, or vice-versa. Either way, the next step is to then look at each part of the model and define the inputs - e.g. how much organic traffic, paid search, social or email traffic do you need to hit your traffic number. How much do need to invest in the user experience, personalisation and automated marketing programs in order to improve conversion. By breaking these top line figures into their constituent parts you can then build a model of your channel and conversion objectives and from this comes strategy!

So that, as they say, is that - an approach for projecting outcomes based on desired inputs and how you can use these to set your strategy and implementation tactics. Sagittarius has a range of tools that we use with our clients that start with this simple concept and then expand out into metrics including individual channel performance, reporting KPIs, secondary objectives and we would be happy to talk you through how to use them.

Nick Towers
Nick Towers
Co-Founder & executive director
Co-Founder and self-confessed massive geek, Nick has been in digital since graduating from law and moving into technology many years ago. Through a combination of building awesome client relationships, crafting a formidable team of digital experts and consistently delivering results for our clients Nick has taken Sagittarius from being a successful small agency to the global digital customer experience consultancy and Sitecore powerhouse that it is today.
Nick Towers

Nick Towers

07 Jan 2016 - 5 minute read
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