Converting Sales | Letters From Dan

Your Website Conversion Rate is Meaningless. Period.

Posted By: DanRMorris | Tags: conversion rate, converting sales, informercials and websites, source conversion, website conversion rate
Posted in An Internet Marketing Journal

People often ask me what my website conversion rate is, which I think is an absolutely ridiculous question. But before we continue, let’s assume you don’t know what a conversion rate is OR let’s define it so the rest of this post is based on a mutual understanding of conversion rate.

Here it is: Number of Visitors ÷ Number of people who perform the task you want them to perform = Conversion rate (as a percentage).
Example: 100 people visit the site, 10 people buy. Conversion rate is 10%

Easy enough, right?

Let’s start with a real life example, let’s use www.antioxidantexample.com, which is the masked url of an antioxidant nutritional supplement that advertises heavily on TV and Radio – but no advertising on the internet.

95% of their web traffic is derived from folks who heard the 30 minute radio infomercial or saw the 30 minute TV infomercial then went to the website to buy the product. What do you think their conversion rate is? Well, it just so happens that the conversion rate is 30%. That means 3 out of every 10 visitors buys the product.

Website Conversion Rates are Meaningless

For a while the company advertised using Google’s AdWords, which means they bid on ad space on the Google Search Results pages. When they did that they drove thousands of people to the site who were searching for “antioxidants” and “antioxidant nutritional supplements”. But the conversion rate of these ads were only .7%, which totally didn’t match the conversion rate of the customers who came to the site from the TV show.

Same website. No changes.

The only thing that did change was the quality of the person that arrived at the site. From infomercials the prospect had 30 minutes of explanation and product examples, before they searched to buy the product, But with Google Adwords they only saw a banner ad. That means most of the people were just curious. The conversion rate of the website dropped substantially.

So the website conversion rate is bunk. In fact, if anyone asks how well your site converts, just tell them that question makes no sense.

Rephrase the question for them. Let them know that they really asked the wrong question. What is important to know is the conversion rate of the traffic that comes from the TV show. It’s good to know the conversion rate of the traffic that comes from banner ads. 95% of the time that conversion rate will differ among sources.

Your website conversion rate is meaningless. The conversion rate of your source’s web traffic, on the other hand, is like spun gold. Knowing what converts well and what doesn’t is the first step in testing, revising and optimization. And hopefully it isn’t the last.

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Marketing Mistakes: conversion rate blinders

Posted By: DanRMorris | Tags: conversion rate, converting sales, marketing mistakes, source conversion, website conversion rate
Posted in Common Marketing Mistakes

I approached an affiliate network this week to see if I could place some banner ads on my sites for a couple products I thought were cool. And the response I got was “let us review your sites and see if there is a match”.

I thought that was odd. Well, once I totally over-thought it, that’s when I decided it was odd.

The upside for them: It doesn’t cost them anything to e-mail me the url so I can download a banner ad. It doesn’t cost them anything if 1 million people visit my site and no one clicks the ad. And it doesn’t cost them anything if no one visits the site and no one clicks the ad. Therefore the upside is potential sales, actual sales and exposure. If it takes 7 impressions before you buy I could be one of those.

The downside for them: If 1,000,000 people click the ad and no one buys, their conversion rate looks really bad. (see related posts to see the truth behind conversion rates). If they put their ads on porn sites, their reputation may suffer. If they allow everyone to put banner ads on their sites and 95% sell 1 unit, that’s a lot of paperwork to deal with. Legitimate concerns? I’d say so.

But after totally over-thinking it, I believe they’re trying to protect their conversion rate. Oddly enough the conversion rate tells you so little that it really means nothing. A conversion rate that is too low means you’re fishing with too wide a net, driving the wrong kind of traffic or a poorly worded ad. Or finally does it mean that your site isn’t converting good prospects into paying customers? The only way you learn those answers is to get lots of traffic and test new things.

And that brought me to these questions. She didn’t ask a single question about what visitors to my sites have bought before or what is their demographic makeup. Nor was she curious as to the size of my e-mail marketing database – or the response rate I get when I e-mail information to my database.

Which leads me to believe that they’re interested in ads that are similar in content to the websites themselves. For example, they’d be happy to promote an Oprah book on an Oprah site. Unfortunately, it’s often the traffic itself that drives sales. A site about Kite Flying that is heavily viewed by people over 50 may do well with Enzyte ads – but that has nothing to do with kites.

So here are two potential marketing mistakes you could find yourself making. I’m not saying the affiliate company I contacted was making a mistake – you’ve got to run business as you see fit. But if you’re motivated by either of these wrongs, you may be missing out on income.

Don’t limit yourself to products and services that are similar to yours. If you’re a home builder – feel free to send your audience a coupon for tax planning at H&R Block. Homeowners and taxes go together. And stop worrying about your overall conversion rate. Look at it as a function of source – not as a function of performance.