Online Marketing + Conversion Analysis = ROI

In Analytics by Marius Badenhorst

Converting Traffic to Sales

Converting Traffic to Sales

A large percentage of the online marketing companies out there are able to generate an increase in traffic to your website. The difference between a good online marketing agency and a great one is the ability to assist you in converting you visitors into paying customers. ROI is of course the primary objective when it comes to investing in an online marketing and this should be the joint goal of an online marketing manager and his client.

This (slightly lengthy) blog takes a look at some of the basics of conversion and how it can be monitored and optimized.

The definition of Web Conversion and Conversion rates:

Web Conversion can simply be defined as “converting a new visitor to a customer”. Many websites are generating enormous amounts of traffic through online marketing and do provide a great service, however their visitors are somehow getting lost in the website or quickly losing interest, which results in them leaving the site before taking advantage of what the site has to offer.
Your conversion rate is calculated by simply working out the percentage of your total traffic which converts to customers.

EG: if you have 100 visitors and 3 of them purchase something, then your conversion rate is 3%.

What is the Point Of Action (POA) for your site?

Every website has an ultimate goal for what they want their visitors to do once they reach the site. This is defined as your Point of Action (POA). Your POA could range from getting a customer to purchase something and make a payment into your account, or even be something as simple as getting your customer to sign up to your monthly newsletter.
It is important that you not only identify your POA’s before designing your website, but also prioritise these into primary, secondary and tertiary POA’s. Any more than 3 POA’s is difficult to manage and could result in simply too many options for visitors.

Calculating your ROI:

It is hugely important that you and your online marketing manager are able to track your ROI. Calculating your Web revenue and comparing it to the amount of money you are investing in online marketing will give you a good idea of your ROI.

Web Revenue can easily be summed up in a simple formula as shown below:

Amount of Traffic * Visitor Conversion rate * Average Order = Web Revenue

Your average order is calculated by simply working out how much money a customer spends per order. IE: customers will purchase one or more products. Whether they purchase one car for £10 000 or a 10 000 different types of pens which cost £1 each, your average price is the same at £10 000.

Obviously, using the above formula, if your traffic is high and your average order amount is high, but your conversion rate is zero, then you have a problem as 10 000 visitors multiplied by a zero percent conversion rate = ZERO!

How to improve your conversion rate:

This is where a good online marketing company comes into play. Any company worth its salt will be able to use numerous tools to analyze your website’s traffic and see where your visitors are exiting your site or simply getting lost. Ideally, you want your visitors to go from a landing page to your primary POA within three or four clicks. Any more clicks than this means that your site has is not optimally designed and you are missing out on web revenue.

A reputable online marketing agency will be able to identify problem areas and use their knowledge of web conventions and conversion to plan and implement subtle changes to your site that will ensure you get the results you desire.

So bear this in mind if you find yourself searching for a good online marketing company. It’s all about the bigger picture and ensuring you achieve maximum ROI – so make sure they know what they’re doing.

About the Author

Marius Badenhorst