Table of Contents
How to create a story from your data that you can use to understand both the data AND the customer journey.
How to break down and solve X in your marketing by working forwards or backwards. I am going to show you what I think is the best model (so far) for making digital marketing sense.
This formula solves questions like;
- How many people came to my site?
- How much did each conversion cost me?
- How many leads do I get per $ spent?
And plenty more.
Most people know that all of these questions can be answered by either one or a combination of metrics that you have in Google Analytics, AdWords, Facebook or wherever.
What people don’t know is which metrics answer those questions.
Marketing jargon gets in the way too…
What is CPM or CPL? What about ROAS and CPC? What’s a Bounce or a “Session”?
I’m going to show you how I have taught others to answer each of these questions instead of throwing jargon at you.
Because the data itself can be great but it’s easier to make a decision when we have a story that tells us what it means and points us in the right direction.
Introducing the TECO Model
So what is TECO? It’s an acronym that stands for;
Each letter represents a set of metrics that we can use to decipher marketing success. Each metric helps us answer important questions about our website or ads or whatever.
The theory is, simple;
Traffic + Engagement + Costs = An Outcome.
That outcome might be good or bad and either way, you can use this framework to measure that.
This is important: Every metric you see in these analytics tools are there to help you answer a question. So think of them that way. They are tools for understanding not just random numbers. Always ask “what questions does this number answer?”.
Let’s say I got 2,000 clicks last month, my time on site from my ads was 45 seconds on average and the cost was $2,000. For that $2,000 I got 25 leads.
Lets break it down;
(25 leads / 2,000 clicks) * 100 = 1.25% click to conversion rate. Not ideal from so much traffic.
If we go through each step now we can uncover the problem;
Traffic = 2,000 clicks. That’s a decent chunk of traffic. Definitely enough to get some clients from if we are dialed in.
Engagement = 45 seconds on our site on average is not very long. That’s a very short period of time. So this might be an issue.
Cost = We paid $2,000 for 2,000 clicks. That’s $1 per click— an excellent Cost Per Click (CPC). However, we also have to consider the cost per lead which would be around $80. Whether that is cheap will depend on your business but let’s say it’s a good number for this example.
So, it looks like engagement might be the problem here. Why did only 25 of 2,000 people convert? That’s only 1.25% of people who saw our ad.
Now we know the problem we can start to create a hypothesis as to why by going to our homepage and reviewing it. What might be leading people to spend only 45 seconds on the page?
We have a basis now for testing website changes because we are able to create a story from the data rather than get stuck looking at just columns of numbers.
We’ll look at each closely in future posts but first an overview;
Traffic measures all of the things that go into leading people to your website. When you’re looking at your data you might ask the following questions related to your traffic;
- How many people came to my site?
- Where did those people come from?
- How effective was I in getting a click from that traffic source?
Engagement is all about how people interact with your website or landing page(s). While this can go pretty deep with tools like Hotjar or using GA4 to track scroll depth here are some questions you might want answers to;
- How long do people browse my website or a specific page after a click?
- What do they look at?
- How many pages do people view in general?
- Do they share it?
- What do they do on your site?
Cost is all about asking “How much?”. This can be hard to quantify in many cases (such as for SEO) but, it is possible to approximate and even a fuzzy idea of success is better than none at all. So, what cost questions might you ask when using this model?
- How much did it cost to get those people to come to my site?
- How much does it cost per person?
- How much is each channel costing me?
- How much per conversion/lead/sale?
- How much have I spent in total?
Outcomes: These are your conversions, leads, sales. Anything that you consider a conversion into a lead/customer or user goes here both MQLs and SQLs can live in this space. If you have a CRM tool you could even pull in some Hubspot data for closed leads and revenue. These questions are probably the ones you are asking the most;
- How many leads did we get?
- How many PDF downloads?
- How often do my website visitors convert?
- How much did I make from this channel?
Now that you know what TECO is you can see how the equation fits together neatly into this framework.
If the Outcome I got last month was to get 20 leads but I wanted 30, I can use TECO to work backwards to figure out why that might have happened by starting at the start with Traffic.
Why this model?
This model sprung into my head sometime in 2016 while working an agency job doing digital marketing for Hotels.
Everything in hotels then was “old-school” the marketing, the thinking, the communication which was a shock to me. I’d been working with hotels for about 6 months when I realized that on our monthly reporting calls my clients didn’t understand what I was saying.
Finally, one day when rearranging the tabs in an AdWords account I came across something that I was shocked I didn’t see earlier.
Each metric is designed to answer a question and grouping them together into broad categories helps to create a story for us to follow.
Because that’s all we are looking for, not a bunch of numbers and jargon but a story about what happened to our marketing. The data should tell a narrative about the customer not be the narrative.
All these numbers in your Ads or analytics account can be grouped into categories based on what their main purpose is and each group of metrics then help to give us context.
To understand my traffic I can look at my traffic metrics the same with engagement and costs and so on. Then when I relate each of those mini stories together I can get a big picture as to why my campaign succeeded or failed.
The foundation of understanding this model is two things;
- You must know what each metric means. Like a loose definition and how its calculated. Thankfully, most of them require simple counting or division and most tools will remind you in a tooltip if you forget.
- Second, you must know how that metric contributes to the story for people who have come to your website.
If you know these 2 things you can use this formula to create a story and demystify your marketing.