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Suggest You - Know These Three Performance Metrics to Increase Website Sales
This is part three of the article series and deals with the paid inclusion and organic search results from search engines.We touched on the topic of Kibitzing in the last part, now we will deal with some of the new concepts in search engine submission namely Paid Inclusion and Sponsored Results. Web sites have evolved from being perspective generators into something more commercial. The knowledge warehouses have finally figured out means to generate revenue for the knowledge service they render through multiple mechanisms. Similarly the search engines have evolved from just being the intelligent bots capable of indexing; organizing and serving relevant content pages to “SEusers”. Now there is one more new term to get familiarized with, like Caesars now we got the Search Engine Users abbreviated into “seusers” (pronounced: SEW-sirs). Search Engines have figured out that there are many websites who want to sell products to the Internet World. For each of th
$1,000 ad cost / 20 subscriptions = $50.00 Cost per Action
Formula: Advertising Cost / Total Completed Actions = Cost per Action
It is important to use the same time range when gathering your advertising cost and your total completed actions.
Your cost per action shows how well your advertising and website strategies perform relative to your advertising investment. Ideally you want a low cost per action. This is achieved by either increasing your conversion rate (adjusting your website strategy) or reducing your advertising cost (adjusting your advertising strategy).
The importance of your cost per action magnifies when compared to your “Value of a Buyer.”
Value of a Buyer – Knowing What You Earn
Your “value of a buyer” is the average gross profit you earn from a completed action. It evaluates the efficiency of your advertising and website strategies at turning visitors into profitable customers.
To c
The deadline approaches and your ad STILL has not sold. What are you going to do? Many publishers would leave the ad unsold, but some publishers have found “insider” ways to make money with their hard-to-sell ads.Let’s face it, if the ad is unused at publication, you have made zero dollars. I'd rather have a money saver or a potential money-maker in the ad slot than nothing at all.You have four great options for benefiting from your unsold ad spaces.OPTION 1 - BARTER THE AD SPACE FOR SOMETHING YOU NEEDYou may be able to get products and services you need in exchange for the ad. What do you need or want? New website graphics? Software? Jewelry? Whatever you’re thinking of buying, try trading for it first.Contact possible trading partners and make your barter proposal. A website where you may find barter partners is http://www.craigslist.org . View some of the posts under the Barter category then post your own ad.
Think about this…
Last month, you spent $2,000 on advertising to send 5,600 visitors to your website and it generated 26 sales.
Did last month’s activity move you closer to your goals?
You don’t know, right?
Well you “need to know.”
Why? Because you have to decide whether to invest more or less money on the same advertising strategy or to try out a new one next month.
And you have to decide if your current website strategy motivates your visitors to act or if you need to adjust your website’s sales copy, headlines, pricing and layout.
In other words, you have decisions to make BUT no information to guide you.
Discovering Your Way to Goal Achievement – Your Performance Metrics
Performance metrics are measures that evaluate the performance of your advertising and website strategies.
Also called “key performance indicators” - performance metrics form a dashboard to gauge the effectiveness of your current advertising and website strategies. They identify the “gap” between where you are today and where your business goals require you to be tomorrow. As Business Executive, Thomas S. Monson stated,
"Where performance is measured, performance improves. Where performance is measured and reported, the rate of improvement accelerates."
You Need to Know These Three Performance Metrics
The following three performance metrics are essential for all web businesses.
A. Conversion rate
B. Cost per Action
C. Value of a Buyer
If you concentrate on just these three, you will achieve your goals with confidence. Why? Because…
“You Cannot Manage What You Do Not Measure.”
Conversion Rate – Your Performance Lever
Website conversion is a process of turning website visitors into prospects and customers.
The most common website conversions or generically called “actions” include:
• Generating email opt-ins
• Producing product sales
• Signing up subscriptions
These actions produce measurable outcomes. Ideally, the actions you want to measure are those most closely tied to the growth of your business; therefore product or service sales are the most common actions tracked.
The quality of your advertising strategies (e.g. Overture, Google Adwords, and Yahoo via natural search) and the efficiency of your website (e.g. sales copy, layout, and headlines) are measured by your conversion rate.
Your conversion rate evaluates: (1) the quality of the visitors attracted by your advertising strategies and (2) how satisfied your visitors are interacting with your website.
Your conversion rate is calculated as follows:
Formula: Completed Actions / Total Number of Visitors = Conversion Rate
It is important to use the same time range when gathering your completed actions and the total number of website visitors.
For example, if last month 1,000 visitors visited your website and 10 purchased your product, your “sales” conversion rate is 1.0%. For every 100 visitors to your website, 1% is satisfied.
By knowing your conversion rate, you make “informative and actionable” decisions. You manage a continual process of testing new advertising and website strategies, quickly determining their influence on your conversion rate and you either adjust them if your conversion rate drops or maximize them if it increases.
As author Jim Clemen’s states in his article, “Don’t Wait to See the Blood!”
"Improving…performance without constant feedback is like trying to pin the tail on the donkey when we're blindfolded; only through knowing where we are, can we change where we are going."
As a lever, increases to your conversion rate exponentially increase your revenue, profit, and ROI. Like precision instruments used by a high-performance car mechanic, your conversion rate enables you to rev-up your advertising and website “sales engine” to accelerate goal achievement.
Cost per Action – Effectiveness of Your Advertising Dollars
Your “cost per action” is the advertising cost you pay for one completed action. As with your conversion rate, an action may be generating an email opt-in, producing a product sale or downloading a white paper.
For example, if last month you spent $1,000 on advertising to generate 2,000 visitors and 20 of them subscribed to your newsletter, your cost per action for a newsletter subscription is…
$1,000 ad cost / 20 subscriptions = $50.00 Cost per Action
Formula: Advertising Cost / Total Completed Actions = Cost per Action
It is important to use the same time range when gathering your advertising cost and your total completed actions.
Your cost per action shows how well your advertising and website strategies perform relative to your advertising investment. Ideally you want a low cost per action. This is achieved by either increasing your conversion rate (adjusting your website strategy) or reducing your advertising cost (adjusting your advertising strategy).
The importance of your cost per action magnifies when compared to your “Value of a Buyer.”
Value of a Buyer – Knowing What You Earn
Your “value of a buyer” is the average gross profit you earn from a completed action. It evaluates the efficiency of your advertising and website strategies at turning visitors into profitable customers.
To c
This is a question that you must know the answer to before you begin the online process. Either one is fine; you just need to know which one you want to do. The basic question is this: What do you want to accomplish online? Do you just want to advertise a product or service, or do you want to sell a product or service?The answers to these questions are a must. I made the mistake of not answering these questions and wasted a ton of time and money, because I didn't know the answers. As soon as you "throw your hat in the ring", so to speak, you're going to have people coming at you from all angles telling you what the best course of action is. And do you know what? All of there answers cost you money! Now we all know that there's going to be a monetary investment involves with getting a website going, but it seems as if everyone and his brother wants to sell you the next thing that's going to make your online endeavor a success. It can become madde
Also called “key performance indicators” - performance metrics form a dashboard to gauge the effectiveness of your current advertising and website strategies. They identify the “gap” between where you are today and where your business goals require you to be tomorrow. As Business Executive, Thomas S. Monson stated,
"Where performance is measured, performance improves. Where performance is measured and reported, the rate of improvement accelerates."
You Need to Know These Three Performance Metrics
The following three performance metrics are essential for all web businesses.
A. Conversion rate
B. Cost per Action
C. Value of a Buyer
If you concentrate on just these three, you will achieve your goals with confidence. Why? Because…
“You Cannot Manage What You Do Not Measure.”
Conversion Rate – Your Performance Lever
Website conversion is a process of turning website visitors into prospects and customers.
The most common website conversions or generically called “actions” include:
• Generating email opt-ins
• Producing product sales
• Signing up subscriptions
These actions produce measurable outcomes. Ideally, the actions you want to measure are those most closely tied to the growth of your business; therefore product or service sales are the most common actions tracked.
The quality of your advertising strategies (e.g. Overture, Google Adwords, and Yahoo via natural search) and the efficiency of your website (e.g. sales copy, layout, and headlines) are measured by your conversion rate.
Your conversion rate evaluates: (1) the quality of the visitors attracted by your advertising strategies and (2) how satisfied your visitors are interacting with your website.
Your conversion rate is calculated as follows:
Formula: Completed Actions / Total Number of Visitors = Conversion Rate
It is important to use the same time range when gathering your completed actions and the total number of website visitors.
For example, if last month 1,000 visitors visited your website and 10 purchased your product, your “sales” conversion rate is 1.0%. For every 100 visitors to your website, 1% is satisfied.
By knowing your conversion rate, you make “informative and actionable” decisions. You manage a continual process of testing new advertising and website strategies, quickly determining their influence on your conversion rate and you either adjust them if your conversion rate drops or maximize them if it increases.
As author Jim Clemen’s states in his article, “Don’t Wait to See the Blood!”
"Improving…performance without constant feedback is like trying to pin the tail on the donkey when we're blindfolded; only through knowing where we are, can we change where we are going."
As a lever, increases to your conversion rate exponentially increase your revenue, profit, and ROI. Like precision instruments used by a high-performance car mechanic, your conversion rate enables you to rev-up your advertising and website “sales engine” to accelerate goal achievement.
Cost per Action – Effectiveness of Your Advertising Dollars
Your “cost per action” is the advertising cost you pay for one completed action. As with your conversion rate, an action may be generating an email opt-in, producing a product sale or downloading a white paper.
For example, if last month you spent $1,000 on advertising to generate 2,000 visitors and 20 of them subscribed to your newsletter, your cost per action for a newsletter subscription is…
$1,000 ad cost / 20 subscriptions = $50.00 Cost per Action
Formula: Advertising Cost / Total Completed Actions = Cost per Action
It is important to use the same time range when gathering your advertising cost and your total completed actions.
Your cost per action shows how well your advertising and website strategies perform relative to your advertising investment. Ideally you want a low cost per action. This is achieved by either increasing your conversion rate (adjusting your website strategy) or reducing your advertising cost (adjusting your advertising strategy).
The importance of your cost per action magnifies when compared to your “Value of a Buyer.”
Value of a Buyer – Knowing What You Earn
Your “value of a buyer” is the average gross profit you earn from a completed action. It evaluates the efficiency of your advertising and website strategies at turning visitors into profitable customers.
To c
The possibilities for corporate event ideas are as wide as the imagination, and the benefits offered by a well-planned event are innumerable. Corporate events may include fun activities to break up the monotony of long meetings, act as icebreakers for team members who don’t know one another well, or unify and rejuvenate a company of any size. With the daily business of work providing little opportunity for social interaction, events you attend as a company should maximize the chance to foster good relationships and offer a break from the usual.Corporate event activities could include any number of team building exercises designed to promote interaction, creative thinking, problem solving, relaxation, and so on. There are many fun ways to encourage individuals to participate in a group project that requires everyone’s contribution in order to be truly successful. Some methods of demonstrating this may use music and movement, team sports, or other challenge
These actions produce measurable outcomes. Ideally, the actions you want to measure are those most closely tied to the growth of your business; therefore product or service sales are the most common actions tracked.
The quality of your advertising strategies (e.g. Overture, Google Adwords, and Yahoo via natural search) and the efficiency of your website (e.g. sales copy, layout, and headlines) are measured by your conversion rate.
Your conversion rate evaluates: (1) the quality of the visitors attracted by your advertising strategies and (2) how satisfied your visitors are interacting with your website.
Your conversion rate is calculated as follows:
Formula: Completed Actions / Total Number of Visitors = Conversion Rate
It is important to use the same time range when gathering your completed actions and the total number of website visitors.
For example, if last month 1,000 visitors visited your website and 10 purchased your product, your “sales” conversion rate is 1.0%. For every 100 visitors to your website, 1% is satisfied.
By knowing your conversion rate, you make “informative and actionable” decisions. You manage a continual process of testing new advertising and website strategies, quickly determining their influence on your conversion rate and you either adjust them if your conversion rate drops or maximize them if it increases.
As author Jim Clemen’s states in his article, “Don’t Wait to See the Blood!”
"Improving…performance without constant feedback is like trying to pin the tail on the donkey when we're blindfolded; only through knowing where we are, can we change where we are going."
As a lever, increases to your conversion rate exponentially increase your revenue, profit, and ROI. Like precision instruments used by a high-performance car mechanic, your conversion rate enables you to rev-up your advertising and website “sales engine” to accelerate goal achievement.
Cost per Action – Effectiveness of Your Advertising Dollars
Your “cost per action” is the advertising cost you pay for one completed action. As with your conversion rate, an action may be generating an email opt-in, producing a product sale or downloading a white paper.
For example, if last month you spent $1,000 on advertising to generate 2,000 visitors and 20 of them subscribed to your newsletter, your cost per action for a newsletter subscription is…
$1,000 ad cost / 20 subscriptions = $50.00 Cost per Action
Formula: Advertising Cost / Total Completed Actions = Cost per Action
It is important to use the same time range when gathering your advertising cost and your total completed actions.
Your cost per action shows how well your advertising and website strategies perform relative to your advertising investment. Ideally you want a low cost per action. This is achieved by either increasing your conversion rate (adjusting your website strategy) or reducing your advertising cost (adjusting your advertising strategy).
The importance of your cost per action magnifies when compared to your “Value of a Buyer.”
Value of a Buyer – Knowing What You Earn
Your “value of a buyer” is the average gross profit you earn from a completed action. It evaluates the efficiency of your advertising and website strategies at turning visitors into profitable customers.
To c
If you’ve ever attended a trade show then you know you will be bombarded with freebie promotion items. Sure there are the popular items such as promotional pens, key chains and note pads, but you will likely encounter unique items such as private label bottled water, customized battery operated fans, water globes, bobble head dolls, envelope openers, mouse pads and Ethernet retractable cable complete with company logo.The above is just a small sample of the laundry lists of promotional items businesses use to generate leads and develop impressions. How can you translate the promotional aspect of a trade show to the promotional needs of an online business?The truth is you may not be using promotional items in the same way, but you can provide your customers (and potential customers) with free promotional rewards.Site promotion has becoming big business and it can be helped along through link building. Not only will your site ranking improve w
As author Jim Clemen’s states in his article, “Don’t Wait to See the Blood!”
"Improving…performance without constant feedback is like trying to pin the tail on the donkey when we're blindfolded; only through knowing where we are, can we change where we are going."
As a lever, increases to your conversion rate exponentially increase your revenue, profit, and ROI. Like precision instruments used by a high-performance car mechanic, your conversion rate enables you to rev-up your advertising and website “sales engine” to accelerate goal achievement.
Cost per Action – Effectiveness of Your Advertising Dollars
Your “cost per action” is the advertising cost you pay for one completed action. As with your conversion rate, an action may be generating an email opt-in, producing a product sale or downloading a white paper.
For example, if last month you spent $1,000 on advertising to generate 2,000 visitors and 20 of them subscribed to your newsletter, your cost per action for a newsletter subscription is…
$1,000 ad cost / 20 subscriptions = $50.00 Cost per Action
Formula: Advertising Cost / Total Completed Actions = Cost per Action
It is important to use the same time range when gathering your advertising cost and your total completed actions.
Your cost per action shows how well your advertising and website strategies perform relative to your advertising investment. Ideally you want a low cost per action. This is achieved by either increasing your conversion rate (adjusting your website strategy) or reducing your advertising cost (adjusting your advertising strategy).
The importance of your cost per action magnifies when compared to your “Value of a Buyer.”
Value of a Buyer – Knowing What You Earn
Your “value of a buyer” is the average gross profit you earn from a completed action. It evaluates the efficiency of your advertising and website strategies at turning visitors into profitable customers.
To c
The Internet provides endless opportunity to start your own business; from a web design company to an online clothing store, the possibilities are endless. Having a brick and mortar setup is no longer a prerequisite to establishing your business. A home office and a simple, informative web site can serve as your company’s headquarters.As easy as it is to start a legitimate company online, fraudsters can also effortlessly create scam firms that take advantage of people. They can shut down an online shop as quickly as it was setup. In order to succeed in the online business realm, you must pay close attention to building trust with your customers.Large established enterprises with reputable names have an advantage when dealing with clients over the Internet. These well-known firms have built their reputation over the years and have the benefit of years or decades of proven levels of trust. But a small or medium sized business (SMB) just starting out
$1,000 ad cost / 20 subscriptions = $50.00 Cost per Action
Formula: Advertising Cost / Total Completed Actions = Cost per Action
It is important to use the same time range when gathering your advertising cost and your total completed actions.
Your cost per action shows how well your advertising and website strategies perform relative to your advertising investment. Ideally you want a low cost per action. This is achieved by either increasing your conversion rate (adjusting your website strategy) or reducing your advertising cost (adjusting your advertising strategy).
The importance of your cost per action magnifies when compared to your “Value of a Buyer.”
Value of a Buyer – Knowing What You Earn
Your “value of a buyer” is the average gross profit you earn from a completed action. It evaluates the efficiency of your advertising and website strategies at turning visitors into profitable customers.
To calculate your Value of a Buyer, you’ll need some additional data including:
• Average Action Value: how much an action is worth to you (e.g. your sales price.) • Gross Profit: how much you make on a product or service sale excluding ad costs.
For example, last month you spent $1,000 on advertising to generate 2,000 visitors and 20 bought at an average of $100 per sale with a gross profit margin of 90%; your value of a buyer was...
$100 average sales value multiplied by 90% gross profit = $90.00 Value of a Buyer
You generate $90 in gross profit for every customer through your website.
Formula: Average Action Value x Gross Profit as % of Sales = Value of a Buyer
By comparing your Cost per Action to your Value of a Buyer you quickly gain an understanding of what strategies to maximize, adjust or drop to increase performance.
If your cost per action is less than your value of a buyer, you are making money and are able to increase your advertising budget or maximize your current website strategy. However, if your cost per action is greater than your value of a buyer, you are losing money and need to reduce your advertising budget, find alternative advertising strategies or adjust your website strategy to increase your conversion rate.
Your Value of a Buyer is a benchmark for gauging whether to increase your advertising budget or “pause” it for necessary adjustments before you sacrifice profitability on a poorly performing advertising or website strategy.
Performance Metrics Reduce Fears and Sets Strategic Direction
Knowing these three performance metrics reduces fear associated with operating a web business. They help quickly identify the advertising and website strategies among the thousands available for your business. And by educating yourself, you become armed with “need to know” information that guides your strategic thinking, establishes an objective baseline for determining “more or less” and ensures you are heading in the right direction to goal achievement.
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