Whether you call them formulas or after their Latin etymology, formulae, you are probably familiar with their use in the mathematical sphere. A formula describes an identity in terms of mathematical theorems. So, you may not realize that you can use a similar approach to monitor and improve your online presence.
You can use formulas to unlock your digital strategy, using meaningful marketing theorems for guidance. Indeed, a successful digital presence needs to meet business expectations in terms of:
- Brand awareness
- Growth potential
While it’s fair to say that no formula can replace a data-driven strategy, it offers a new take on existing data.
#1. Annual cost/ production contribution margin
Online transactions are not the same thing as being profitable online. Did you know that 9 out of 10 e-Commerce businesses fail within their first 4 months of existence? One of the most common reasons for collapse is the lack of profitability. For online retail websites, profitability is as much a matter of how much they sell as how much they need to pay. More often than not, businesses don’t understand how to break even. As a result, they are likely to stop the production and trade of units too early. The break even point formula helps understand how much you need to sell to cover your business costs.
The formula to analyze your break even point is:
Fixed business costs / (sale price – variable costs)
#2. conversion/total visitors
The conversion rate is a KPI metric that you are likely to find on your AdWords campaign. However, it can be helpful to monitor the conversion potential of all your online paths and campaigns. Google Analytics also displays a conversion rate calculation. However, it can be helpful to introduce effective targeting when monitoring conversions.
Your conversion rate is, ideally:
(number of conversions / relevant visitors to the site) *100
However, you want to make sure you align your conversion calculation to your target audiences. For instance, if you’ve set up a GA goal for a subscription sign-up , conversions refer to every user who signs up. But GA tends to estimate the conversion rate based on the total number of visitors to the site. This is inaccurate. This number includes existing subscribers and visitors who came to the site with a clear purpose (looking for your phone number, purchasing an item). Instead, it can be helpful to add a calculation that focuses on a strict target, such as visitors who engage with your content.
#3. =QUERY(range, sql_query)
There is no online presence without a strong SEO strategy. Similarly, there’s no SEO success without an adequate understanding of Excel formulas. Excel spreadsheets are the go-to tool for most SEO activities, whether researching keywords or importing data from multiple sources. An SQL query lets you get a granular approach to your data.
Say you have a big data set from Site Explorer that includes a list of all backlinks to your website. The data set pulls out domain information, link anchor, and other details about all referring pages that link to your site. You can use the query formula to identify your SEO strategy prospects, such as domain ratings >50, for instance.
The query formula can help highlight the relevant referring pages that meet your criteria.
#4. Post interactions/ post reach
Do you know your social media engagement rate per post? Most social media platforms let you know how many users you post can reach. You can use this information to monitor your engagement performance.
Imagine a Facebook post that reaches 1400 people and attracts 20 reactions (likes, comments, etc.). Your engagement rate is calculated as follow:
(Post interactions / post reach) *100
In the example above, the engagement rate is 1.43%.
#5. Max bid + quality score + ad format
Your Ad Rank in Google AdWords defines your visibility and the order in which your ad will appear in the SERPs. While the formula is not public, the elements used by Google AdWords to calculate Ad Rank are. Improving your Ad Rank can help you minimize marketing costs without compromising on results.
Ad Rank= Maximum bid + Quality score + Ad format.
#6. Web visits / new leads
What is your web traffic to lead ratio? Unlike the conversion rate, which can be calculated at a granular level to monitor individual conversions path, the website traffic lead ratio shows the site’s overall lead opportunity.
To calculate it, you will need to monitor all qualified conversions and include offline leads too. You can use your CRM tool to leverage the API functions in GA.
The formula is:
Website visits from GA / all profitable leads taken from CRM
In conclusion, there’s always room for granular analysis in your online presence. Using these formulas also lets you experiment and track results rapidly. You can visibly improve your brand visibility, profits, and growth by focusing on the different elements within these formulas.