I just arrived home from San Francisco where I attended the eMetrics Marketing Optimization Summit. As always, it’s great to catch up with friends and participate in enlightening conversations. A key theme of my presentation: how to get organizational buy-in to testing and conversion optimization.
Marketers often get so worked up about the prospect of website optimization that we forget an important step. Before we can pursue optimization, we must convince those in our own company about optimization’s value.
Here, then, are some tips for convincing executives, coworkers, teammates, and anyone else in your company of the importance of investing in marketing optimization, analytics, and conversion improvement efforts.
When you present your numbers, don’t assume your listeners are getting the math right:
- 100,000 people visit your Web site
- 3 percent of people convert into a desired outcome
- Your site gets 3,000 total conversions
What happens when you increase conversion rate by 1 percent? How many total conversions does your organization hear?
Another dangerous assumption to make is that your listeners can translate numbers into dollars. Always show impact in terms of dollars. Use average order value (AOV) or average lead value (for lead-generation or registration sites).
Let’s say your AOV is $50 and your company spends $200 for every 1,000 visits. For those 1,000 visits, your conversion rate is 2 percent, which equals 20 actions. For every 1,000 visits, you gross $1,000 in sales (calculate: $50 AOV x 20 actions = $1,000 in gross sales). If you increase your conversion rate modestly to 3 percent, your gross sales increase is 50 percent, or $500 per 1,000 visits (calculate: 3 percent x 1,000 visits = 30 actions; 30 actions x $50 AOV = $1,500 in sales).
It’s also helpful to show the dollar impact over an entire quarter or a fiscal year.
Oftentimes companies have a hard time determining AOV or average lead value with any degree of accuracy; that’s OK. Of course, the cleaner your data, the easier it will be to have organizational buy-in. The key is to show some sort of monetary value. We often encourage our clients to make a conservative estimate that most in the company will agree on.
Show your team the advantage of taking control of the visitor instead of existing solely at the mercy of visitor traffic.
With an AOV of $50 and a modest conversion rate increase from 2 percent to 3 percent (50 percent), the sales increase is impressive, but that’s only one part of the story. In the table below, you can see the impact of increasing both conversion and traffic:
In the “good” column, you get more from the traffic and spend. Your CPA (define) goes down, and you generate more profit from your advertising. You won’t grow faster, but you make more.
Let’s say you reinvest some of those dollars into acquisition spend to drive more traffic. You can grow exponentially and outspend your competition, you can even afford for the conversion rate to go down a bit. Your conversion and traffic increase rockets your growth dramatically.
This advantage of conversion rate optimization is often missed or overlooked by many companies.
With a conversion rate increase, you now have a choice:
- Use incremental profits to expand reach: 133,000 visits x 4% conversion rate = 5,320 orders
- Lower your marketing acquisition costs. If your acquisition cost was $100 per action, with this efficiency it would now be $66 per action.
Again, even with modest increases in conversion companies can begin to wean themselves off addictive traffic or make their traffic work harder for them instead of working harder for traffic.
While there are many tools to aid marketers in their quest, there’s still no conversion rate black box. Conversion optimization always require resources and effort, trial and error, and sometimes sweat and tears. And it never ends. Optimization is a continual process of gaining customer insight, implementing changes, testing, then starting the whole process over.
You can’t always control the amount of visits, but you can control what you present to visitors. Why not optimize it?
Still have doubts? Ask yourself: what would it cost you to double traffic (if this is even possible) versus doubling conversion rate?
*Article cross-posted on ClickZ
Editor’s Note: At FutureNow, we insist on measurable ROI for our clients. That’s we start by identifying the areas that will make the most difference to your conversion rate and other vital performance metrics. Please contact us to learn how we can help you, or an executive team you know, market better.