When analyzing online channels, you should only consider the profit receiv from advertising, which will allow you to get accurate results. This can be important if there were eight transactions during the advertising campaign, but all the buyers came from recommendations overseas data of friends. Then it turns out that advertising was pointless and unprofitable. Although if you substitute all the income receiv from the incoming clients into the formula, it may seem that this is not the case. In general, when calculating the DRR, you ne to consider where the applications come from and whether advertising affects this.
Finally, when thinking about how the DRR is calculat
One cannot ignore the efficiency of the sales department. For example, if a manager gets 20 sales from 200 applications, then his conversion is 10%. It should not decrease when advertising is launch and traffic increases. If leads have increas to 400, but sales more options, but not many remain 20, this does not mean that advertising is ineffective, despite the poor DRR value. In this case, it is necessary to check the work of the sales department by conducting an audit.
How to understand that the DRR is normal
To make things easier, let’s assume that seasonality and the length of the sales cycle do not affect advertising, and that managers have good conversion. If in this case the DRR value is more than 100%, then it turns out that advertising is ineffective: more money was invest in it than was earn. When the situation does not change over time, it is necessary to reconsider the methods of promotion.
Any DRR indicator less than 100% indicates that the advertising has paid off. Everything is simple here: the lower the value, the more the business is in the black. You ne to strive to bring the DRR to a minimum. This is possible only with a large number of clients and minimal investment. There are no clear norm values: each organization has its own average indicator.
How to improve DRR
If you have learn your advertising expenses but are not satisfi with them, then we hasten to please you: you can influence the DRR. And without abandoning advertising campaigns or changing channels. To improve the metrics, you ne to conduct a comprehensive campaign audit.