Website Conversion: What's in it for You?
Welcome to the latest
edition of the Inside Edge--your monthly report on Internet trends
and advancements that can turn your business into a more profitable
e-Business! This month we take a
look at website conversion and how your business can benefit from
setting measurable goals and
objectives.
After you read this
month's edition, contact your WSI Internet Consultant to find out
how to put this valuable information to work for your business right
away.
Thanks for reading!
What is Website
Conversion?
You keep hearing WSI reinforce the
need for businesses to have successful website conversion,
conversion ratios and ROI measurement strategies. But what does this
really mean and what's in it for you? Well, quite simply, website
conversion is having visitors come to your website and encouraging
them to take an action such as making a purchase online or signing
up for your online newsletter. By doing so, they have converted into
a measurable online relationship with you.
Now, in order to calculate your
conversion ratio, just divide the number of "converts" by the total
number of visitors. To calculate your ROI take your total sales
revenue derived from your "converts" and subtract the total cost of
your campaign. Now before you run off and start calculating your
conversion ratios you need to ask yourself one very important
question: What "conversion" action(s) should visitors to your
website take which will meet your business goals?
Important Definitions
Conversion
= A visitor that completes an action you want them to take.
Conversion Ratio = Converts/Total Visitors as a
percentage
ROI = Total Revenue from
Converts � Cost of the campaign
Setting Measurable Goals
Before any conversion tracking can
take place, your website goals and measurable objectives need to be
established. These will greatly assist you in measuring your
website's future success or failure. Your goal is
what you want your visitors to do in terms of an action, while your
objective is how you define your success or
failure.
The Internet has made measuring your
online marketing results extraordinarily easy, compared to
traditional offline marketing tactics. Your website's goal will
likely fall within one of the following four categories:
-
Lead Generation � your goal is to gather
potential customers' contact information through your website.
These are items such as names, email addresses and other
pertinent information from people who are interested in your
products or services in order for you to cultivate a
relationship with them.
-
Sales � your goal is to generate sales via
your website (i.e. e-commerce). So here you are looking for
customers that pay with a credit card (or other online payment
methods) for your products/services online.
-
Cost Savings � your goal here is to reduce
costs, usually in the form of offline activities which you can
automate online; such as e-learning or automated data backup of
your computer files.
-
Customer Service � your goal here is to
reduce costs and make it easier to service customers � this
could entail items such as online forms, self-serve options or
enhanced FAQs (Frequently Asked Questions)
features.
It's very common to have multiple
goals for your website. However, bear in mind that the primary
message you want to communicate online may be different than your
secondary messages. For example, the primary message on an
e-commerce website may be for customers to make more purchases
online but the secondary message could be about the brand (as
communicated through your logo, content and creative design). The
two goals here would be to achieve more sales and enhance brand
loyalty.
What is a Measurable Objective?
So now that you've established your
goals you need to define a measurable objective. What is a
measurable objective? Quite simply, a measurable objective is a
number. It's a figure defining an achieved goal. For example, a
measurable lead generation goal is to generate 250 new prospects per
year. While a sales goal could be 50 online sales per month.
It is important to note that there is
much more to setting a realistic objective which includes examining
trends over time. Your WSI Internet Consultant can assist you in
setting realistic and measurable objectives; but in the meantime,
here are some quick formulas which can help you in measuring your
objectives.
Conversion Rate =
Total
Conversions / Total Visitors (as a percentage)
Cost
Per Visitor =
Total Website Spend / Total Visitors
(as a dollar amount)
Cost Per Conversion =
Total Website Spend / Total Conversions (as a dollar
amount)
Objective =
Total Conversions
required to break even or turn a profit
ROI =
Total Revenue from Converts � Cost of the Campaign
Simply put, you want to reduce your
costs per visitor and cost per conversion, by increasing your
conversion rates and ROI.
"
What is it
you really want your visitor to do when they come
to your website?"
Let's look at the following scenario:
Let's assume you sell hot tubs online
and spend $1000 per month on Internet marketing (i.e. PPC,
development costs, etc.) and attract 2000 visitors per month and
receive 10 sales per month. Your metrics would look something like
this:
Cost of Campaign = $1000 in Month
1
Average Order Value (AOV) =
$5000
Conversion Rate = 10/2000 =
0.5%
Cost Per Visitor = $1000/2000 =
$0.50
Cost Per Conversion = $1000/10 =
$100
Objective = Break even number is $1000 in
Month 1
If your campaign generated $50,000 in sales
your ROI is
$49,000
Once you identify your conversion
figures it makes it easier to focus on your business objectives � by
taking action to set goals and measurable objectives you are one
step closer to achieving online success.
We've only just begun to
scratch the surface of website conversion. To learn more, speak with
your WSI Internet Consultant today about the power of conversion
tracking and the insights it will provide you on how visitors
interact with your website.
WSI,
headquartered in Toronto, Canada, is ranked the #1 Internet Services
Business in the world. With systems that have been developed,
utilized and proven by over 1000 Internet Consultants in 87
countries worldwide, WSI delivers thousands of e-Business solutions
to small and medium-sized businesses annually.
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