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Achieving Sales Conversion Starts with the End in Mind
By Kevin Gold, Managing Partner, Enhanced Concepts, Inc.

Every traffic generation channel (like pay-per-click or organic search engines) and the visitors arriving through it produces varying outcomes from the same website.

Every traffic generation channel (like pay-per-click or organic search engines) and the visitors arriving through it produces varying outcomes from the same website.  Therefore, even if your website produces a favorable sales conversion from organic search engine visitors, there is no basis for assuming that another traffic generation channel like pay-per-click will deliver similar or better sales conversion results.  "All traffic is NOT created equal".

So how do you define the RIGHT goal?   

Easily - by following these three steps:  

1. Define Your Most Important Action

All businesses have a "most important action" which their marketing efforts seek to solicit from their website visitors such as sales, leads, content or membership subscriptions or any other "value-oriented" action.  You must define your "most important action" and use it as a guide for all of your market strategy decisions.  This is your general "goal".

Many times however the achievement of the general goal requires successfully achieving smaller, preceding goals.  For example, generating a sales lead may first require a visitor to move beyond an initial landing page to a qualifying content page and then onto completing an online form.  Each step has an associated goal leading to the primary one.

2. Consider Your Entire Conversion Chain  

All website value chains have at least two essential and interdependent components that must be addressed to maximize your financial results from achieving your "most important action".  The first is "generating visitor traffic" and the second is "converting the visitor traffic".

Visitor Conversion to Customer Conversion = Sales Results

If you consider only one component instead of the two then you'll increase your chances of failing to meet your goal.  Because all visitors are not equal, each new traffic generation channel requires testing and measuring to ensure its effectiveness with your website.  If a particular channel performs poorly with your current website then develop strategic landing pages specifically for the channel or drop it and allocate the budget elsewhere.

I have spoken with many companies that were awfully disappointed with their pay-per-click search engine results yet they never considered enhancing their website  conversion strategies specially for their pay-per-click visitors.  Because traffic generation channels perform differently, we need to optimize our website's conversion strategies to attract, interest, evoke desire and persuade action from each specific visitors channel.

3. Add Measurable Performance Metrics (Fill in the Details)

But establishing a goal (i.e. most important action) and addressing "both conversion chain components" is not yet good enough.  As the saying goes, "the Devil is in the Details".

If you set your goal to "achieve sales" then you need to define what that means as a measurable performance metric.  There are many types of performance metrics which measure the effectiveness of traffic generation or conversion separately, like "cost per visitor" or "conversion rate", but only one that considers both interdependently.

Successful marketers use a performance metric that considers both traffic generation and conversion in measuring goal achievement.  This metric is called, "cost per action".  It is calculated as follows:

Total Cost of Traffic Generation Channel
Total # of Actions Generated by the Traffic Generation Channel

The "total cost" figure includes the cost for traffic and the cost for the outsourced third party or in-house labor.  The "total number of actions" figure includes the sales conversion rate:

(Visitors x Conversion rate = Number of Actions).

A target "cost per action" should be a specific dollar figure below your net profit (defined as, "Revenue - Product Costs") and your profit margin objective.

For instance, let's assume that your product sells for $97, your product costs $20 to develop, carry or deliver and your net profit objective is $25 -  your ideal "cost per action" should fall below $52.

By following these three steps you will be able to:
  • Establish measurable performance metrics to determine success or failure of a traffic generation channel and determine your return on investment from it.
  • Communicate to an outsourced service provider the "detailed goal" you expect to achieve through your engagement with them.  For a pay-per-click campaign, this enables a service provider to calculate bid prices, ad positioning, and bid management strategies to help meet your performance metrics.
  • Set priorities for selecting an effective outsourced service provider or to direct in-house efforts.
  • Ensures that your marketing strategies are focused on your goal and that you're heading in the right direction.   
Establishing your DETAILED goal BEFORE you make any outsourced or in-house decisions is essential.  As the old joke goes, "I'm making progress climbing the ladder of success - I just don't know if it's leaning against the right wall."  

Define your "most important action", allocate efforts for traffic generation AND conversion and establish the correct performance metrics to determine success.  By following these simple steps, you position yourself for greater sales increases and fewer wasted advertising dollars.

Kevin Gold is Managing Partner of Enhanced Concepts helping businesses increase their online leads and sales through improving conversions and gaining greater visibility. Download "20 Surefire Ways to Increase Your Website

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