When onboarding a new client, we spend time discussing goals, agreeing on metrics to measure success, and setting targets for the future. The idea is to ensure that everyone is on the same page, that we understand what we’re trying to achieve, and that we can track and measure our progress.
However, what starts off as a reasonable agreement can actually (unintentionally) put pressure on the relationship. In reality, we’re never going to hit our target figure exactly. We’re always going to have to report being slightly under or slightly over target, slightly better or slightly worse than last month — even if the fluctuations are small enough to be insignificant. To avoid this problem and frame our client conversations in a positive light, we can use target ranges to smooth out any minor performance fluctuations.
Instead of a fixed figure, e.g. a CPA target of £50.00 per conversion, we can take 5% either side, and suggest an ideal range between £47.50 and £52.50 per conversion.
Imagine a situation where our average CPA for a given month is £48.50. In the first scenario, we're below target and everything looks good. If next month's CPA jumps to £52.00, we have to explain a 7.2% cost increase to the client, not to mention a missed target. In the second, both months are within target range, the client doesn't have to worry about an unexpected performance dip, we don't have to worry about sharing bad news or losing our client.
Target ranges can solve other problems too:
Diminishing returns when optimising Google Ads accounts over time
When working on a new account, it’s relatively easy to find opportunities for significant performance gains. However, after the first few months, the low-hanging fruit becomes more difficult to find. Typically, there are quieter phases where we're working to make small, incremental changes, even phases where things don't go as well as they should. This can be difficult to explain to clients — particularly if they’re used to seeing consistent, dramatic improvements.
Target ranges can help manage a client's expectations. Instead of the story being “the good days are over, we can’t promise consistent performance increases like we used to” we can say “we're consistently hitting our targets, and making sure the good times continue.”
Natural fluctuations that affect Google Ads accounts
Performance can be impacted by external factors beyond our control, like seasonality, competition, or even the fact that February has 28 days and January has 31. The truth is, these fluctuations tend not to mean much, speaking more generally, we should try to spend less time worrying about small percentage changes beyond our scope of influence.
Nonetheless, our brains can’t help but make meaning out of negative results, no matter how small. Reporting a 2.5% increase in CPA can be unsettling for clients, and blaming external factors can be seen as excuse-making.
With target ranges, this goes away:
Instead of sending your client a long-winded explanation for natural fluctuations that often mean very little:
Spend increased by 3.64% this month. Over the same time period, conversions decreased by 2.44%. This means our CPA increased by 4.82%. This is most likely due to natural fluctuations and seasonal changes in spending patterns.
We can keep things simple and to the point:
You'll be pleased to know that both CPA and conversions are on target this month. Things are looking good.
Pitching target ranges and getting clients on board
If your existing clients are used to fixed targets, encourage them to set up target ranges. As account managers, it's our responsibility to shape our client relationships and ensure things are set up for them to flourish and grow. In keeping with client communication best practices, avoid shifting the work onto the client, steer clear of open-ended questions, and aim for a “sounds good” response.
Last time we reviewed your goals we agreed to a target CPA of $10.00. Now that we’ve been actively managing the account for 6 months, we have a better understanding of the market and would like to review those targets.
We’d like to suggest a new CPA target range of between $8.00 and $12.00. This will help us account for the small, natural fluctuations in demand we see in any given month, as well as giving us more room to experiment with new keywords, audiences, and strategies.
We can go over things in more detail on Friday — would be really interested to hear your thoughts!
We’ve included target ranges in Opteo Reports to make it easier for account managers to communicate performance in context and manage client relationships. Start a free trial today, and see the benefits of client-focused reporting.