Internet Marketing can be broken down into three core functions:
Traffic – getting eye balls on your website
Conversions – getting visitors to take a desired action
Branding – creating a positive relationship with your customers and in turn increasing each customer’s lifetime value

Online business owners will rightly spend sizeable resources on traffic acquisition and branding. PPC is certainly not a cheap form of traffic and SEO is anything but free. Because the costs of acquiring traffic are so high, people tend to have a narrow focus on generating traffic. Things like click-through rates and ranking become an obsession and lead people to ignore other critical duties. The conversion process is a core element of success and often gets neglected. For a lot of people the process of creating a landing page or sales page is a one-time effort. But the conversion process should be a regular duty for any online business. Lather, rinse and repeat…

A restaurant may serve the best food in the world, but ugly décor, a dirty premises or a hard to find door can hamper sales significantly. Business owners often think they know exactly what it is that people want and why they searched for it in the first place. But without the numbers to back it up, all they are doing is making an educated guess. The mistake they are making is to not let the numbers do the talking, your customer knows best, so let the numbers speak for your customers. When you listen to what the numbers are saying, you can hone your sales process into an efficient conversion engine.

What is a conversion rate?

Definition of “conversion rate”: the percentage of visitors that take a desirable action on your website.

Such desired actions can include:
Filling out a form
Email subscriptions
Completing a sales funnel
Download a demo
A click-through to another page

Any action that benefits your business can be considered a conversion or goal. If you make 1 sale per 100 unique visitors, you will have a 1% conversion rate. The same applies for email subscriptions or any desirable action you wish visitors to take. All websites should have many actions they wish to see visitors take. The goal of course is to maximize all these desired actions.

What desirable actions do you want visitors to take on your site?
How do all these actions work together on your site?
What have you done lately to improve these?

If you have not thought about these points before or even recently, I urge you to take the time to do so. Conversion rates are the key element that will determine the success or even the survival of your business, therefore it’s important to ensure you are not leaving money on the table. Acquiring traffic is expensive and hard work, so make sure you’re making the most of that traffic investment. Much like a recipe that is built from testing various ingredients, your site too has the perfect recipe for maximum success. Have you tested your recipe for success?

What is conversion rate optimization?

Conversion optimization is the process of making changes on your website that increase conversions. The changes you make to reach higher conversions can be large or small, depending on your goals and your comfort with risk. Changing the font on your sales copy would be a very small change and likely produce small gains. Whereas, running a completely new set of sales copy would be a large change and would likely yield a large change in results. Of course the large changes could be for the better or the worse. But…

All things that are vigorously tested, observed and tweaked will always improve.

Does your website suck?

All websites suck to some degree. I have yet to see the perfect site that achieves its highest possible rates on conversions. The sooner you admit you have some site issues and I assure that we all do, the sooner you can get on with creating better conversions. Companies will spend massive amounts of money to get traffic to their site only to land on a page that has little thought put into it.

The creation of landing pages is often influenced by many groups of people:
The owner
Web designers
I.T.
Marketing
Product managers
Upper management

In the end the landing page is usually an amalgamation of input that satisfies all parties’ emotional and political needs. In essence the landing page often serves too many masters. Or put a better way they forgot to serve the ultimate master, the customer! Rarely is the customer’s opinion taken into account.

Business owners have explained to me that they know what customers want and why they want it. My reply will often be, have you been able to confirm this with hard data from your site? Have you tried any revisions to improve the performance of your site? The answers is often no or no I don’t need to because I already know. But really what they are saying at this point I have no justification to improve the marketing and sales performance of my business. This is a statement that no business owner should be comfortable in saying.

What is the purpose of your web site?

As stated above your website may serve too many master or even worse makes no consideration of the most important audience, your visitors. The goal of your marketing process is to align your measurable business actions (sales, sign ups, etc.) with the behaviors, needs, beliefs and desires of your visitor. Have you truly captured your audience’s imagination? An excellent sales process does just that.

A case for conversion optimization

Let me paint the following picture for you about Larry. I want to show you how Larry doubled his net profit by merely increasing his conversion rate by .25%. Larry sells a $100 product. The cost of this product is $70; therefore a single conversion has a gross profit of $30. Larry is paying $0.25 per click and his product sells with an average conversion rate of 1%, this gives Larry a cost per acquisition of $25. CPA could also be the called the cost of making a sale (advertising costs per sale)

Selling Price $100.00
Product Cost $70.00
Gross Profit $30.00
Cost Per Click $0.25
Conversion Rate 1.00%
Cost Per Acquisition $25
Net Profit $5

Gross Profit = Selling Price – Product Cost
Cost Per Acquisition (Sale) = Cost Per Click / Conversion Rate

In the above example the product sells for $100 and  the product cost is $70. Therefore we have a gross profit of $30. Then we minus the cost per acquisition of $25 and this leaves us with a net profit of $5 per sale.

Now what is very interesting is when Larry improves his conversion rate from 1% to 1.25%.

Selling Price $100.00
Product Cost $70.00
Gross Profit $30.00
Cost Per Click $0.25
Conversion Rate 1.25%
Cost Per Acquisition $20
Net Profit $10


Larry has doubled his net profit per sale from $5 to $10 by increasing his conversions by ¼ of a percent!
I was blown away when I did the math on th