Economics of Conversion Optimization

I spend a lot of time every day explaining Conversion Optimization because it is such an important part of what we do.

The general idea is to get more of your visitors to perform a specific task – a task that will help your company grow. It may be as simple as signing up for your newsletter or sharing on Facebook something about your site. Or it could be as significant as buying something online or calling you up, ready to do business.

First you have to determine what you want visitors to do, then start working on the process. But why? Is it really useful?

Let’s say you have a web site that sells widgets. Each widget is \$10. During a typical month you get 10,000 visitors to your website and you sell 100 widgets, one to a customer. You have a 1% conversion rate:

100 (customer)/10,000 (visitors) = 0.01 or 1%

So you set to work on improving the conversion process and after much work you go from a 1% conversion rate to a 1.5% conversion rate. What? Only a .5% increase?

No. Not a .5% increase. Look again. That is a 50% increase. Now instead of making \$1000 for every 10,000 visitors, you make \$1500.

Stop and think about that. If you had not conversion optimized your site, and instead run an SEO campaign to increase traffic to 100,000 visitors a month you would make \$10,000. But if you first optimize your site for conversion and then do the SEO campaign, you are suddenly making \$15,000 month.

Spend time optimizing your site before you optimize your search! If you spend the resources to improve your conversion rate from 1% to 2%, you will double the money you get from your site.

Well that makes sense for ecommerce but what about a lead generating site? The same principle applies. If you get 1000 visitors a month, ten of which call and one of which becomes a customer, you now have a formula. First look over your site and see what you can do to optimize the conversion process. Then make some changes. It is actually better to make small incremental changes so you can determine which changes are working.

On the web site itself you can’t change the conversion rate of 10 calls to 1 customer. That is an internal process you can (and should) work on. But you can work to get more people calling. Again, get 15 or 20 calls a month and you have a 50 – 100% increase in conversions, leading to more revenue for you.

So invest the time and resources to make your site better. It will have a positive impact on your bottom line.

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