How can lead generation businesses get a leg up when it comes to digital marketing and specifically for google search campaigns?
Goal Tracking with Napkin Math
If you run a b2b business or if your business relies on consumers filling out information (leads), you probably know that digital marketing can be a bit tougher, as eCom seems to get all the flashy Google ads updates and case studies. It is something that is pretty well agreed upon across the industry, as you can see in the examples below from Julie Bacchini and Melissa Mackey. How can lead generation businesses get a leg up when it comes to digital marketing and specifically for google search campaigns?
One way is lead scoring, which is when you assign numerical values…. However, not every client is going to have the time and/or desire (despite the importance) to continually score leads for you to be able to optimize towards. I have found that a lot of the time the client will be really good for a month or two and then the scoring will get less and less consistent as new issues arise.. So when the lead scoring option turns out to not be an option, I turn to what I usually refer to as “napkin math”.
What is Napkin Math for lead gen?
The goal with the napkin math is to come up with values for the different types of leads on the website based on historical data. Before we get into how, let me illustrate why it is important to do this based on lead type with an example from a client.
We have a doctor’s office as a client and they get leads in two ways - a form fill on the site or a phone call. When onboarding, we made sure that both were tracking correctly and set up new campaigns with manual bidding (as we normally do.) After we got some data in the new campaigns, we started to run experiments for target CPA bidding in Google Ads. we found that we were generating a lot of phone calls, so cpa went down and conversions went up and what happened next was… You guessed it, the client said appointments were down since we made the change and what happened. This was nearly the same exact case as the real estate client from years ago in the 5 steps blog, but luckily this time I was ready. I asked the client if it would be possible to lead score and, at the time, that was not going to be a possibility. So instead I offered the napkin math solution so that we could provide a value to Google Ads and let the system know that a phone call is not equal to a form fill for our business even though they are both conversions.
How to calculate the conversion value?
The key note about this method and why I call it napkin math is that it doesn't have to be exact, which makes it easier on the client and easier to update as you get more data. We are just trying to come up with approximate values so that we can have Google’s bidding system work a little better in finding us the right types of leads.
To do this you really only need two pieces of data:
What a new customer is worth to them (the value)
The conversion rates for each lead type into a new customer
To illustrate, let's make up some numbers
Let’s say a new customer is worth $1,000 and there are two types of leads (phone calls and form fills). Then let’s say that a form fill turns into a customer 10% of the time and a phone call turns into a customer 2% of the time. To find the value of each conversion type, you simply multiply the conversion rate and the new customer value. In this case, for a form fill, you would take 10% x 1,000 = $100, so each form is worth $100 to the business. You would take the 2% x 1,000 = $20 for phone calls, so each phone call is worth $20.
Now that you have values for your conversion types, you will update those values either in GA4 or Google Ads and then you can start testing out Max conversion value or target ROAS bidding.
After implementing this for the doctor’s office, we saw a pretty big increase in the form fills coming from our campaigns, and in the next meeting, the client was very pleased with the new patient acquisition numbers. (Stay tuned for a case study with exact numbers and strategies).
As you can see, this is a pretty straightforward and simple way to create values for your conversion actions and get to use Target ROAS bidding in your Lead gen campaigns just like all those eComm guys & gals. This strategy definitely works best for businesses that have multiple conversion actions that are not at all equal in terms of converting into customers. if you just have a form fill on the site and that’s it, a max conversion or target cpa strategy should work just as well. And always experiment and test. Once you figure out your values, don’t just switch to target ROAS. Create an experiment to test against the target cpa or against your manual bidding. We still have many clients that, no matter how many times we test different strategies, manual bidding is the top performer.