Cost Per Visitor (CPV) – How many advertising, marketing, SEO, etc. dollars do you need to spend to bring in each Website visitor you’re getting.   Don’t look at conversion just yet – it’s your website’s job to convert the visitors; marketing’s job is to get them there in the first place.  So Cost Per Visitor is the best starting point for measuring your return on marketing spend.

Also, feel free to break this down by channel: SEO, e-mail marketing, PPC, conventional media, etc.  Some channels are easier to track than others, but give all of them your best shot.  Now plot your CPV performance from the beginning of the year till now and see how you’re doing.

Revenue Per Visitor (RPV) – Top line revenue is usually easier to calculate and track, so we go with RPV, but if you’ve got the metrics to figure out bottom line Profit Per Visitor, all the better.  So basically you’re looking for how much money you are bringing in per Website visitor, and you’re looking to see how this metric is changing from the beginning of the year until now.

CPV should be decreasing and RPV should be increasing

What to do if these metrics aren’t moving in the right direction:

1. Take a look at your marketing spend. What’s working?  What’s not working?  Look at differing channels, keywords, time of day, etc.  Get accountability from the tactics you are using to drive traffic.
2. Focus on improving your conversion rate.  Your Website’s conversion rate can act as a lever to both CPV and RPV.  By examine keywords and marketing campaigns in terms of scent and scent trails, you can improve the performance of your campaigns and drive down CPV.  By improving micro-conversions throughout the buying process, you can increase macro-conversions, average order value, repeat customers, etc – thereby improving RPV.  For tools on how to do this, take a look through our archives, read Always Be Testing (or any of our other books), or give us a call.

Feel free to let us know how you’re doing, or to post any questions you have on these metrics and improvement tactics.  We’d love to hear from you.

[Editor's note: the author of this post is now blogging at jeffsextonwrites.com]

We thought we’d share some insights so that if you’re thinking about an optimization program, you can avoid the pitfalls and reap the rewards.

There are many, nuances of course, but I’d boil it all down to 4 basic steps.

Step 1 – Get Help

Those who get a personal trainer are more likely to accomplish their fitness goals.  In the world of online marketing, those who get expert help are far more likely to achieve their business goals than those who try to “DIY.”  The help you need is cross-disciplinary: you need expert eyes looking at aesthetics, usability, copywriting, marketing strategy, split testing, personas, pay per click, search engine optimization, and more.  Of course, we’d like to be considered when you go looking for outside help.  But if you don’t hire us, do hire someone!  Even if we don’t get your business, we’ll take solace in knowing that the Web is getting better for customers, little by little.

Step 2 – Get Out of Project Mentality

There is a tendency to think about improving a website, or any marketing, as a one-time project with a beginning and end.  We believe this is the wrong approach to optimization.  You may think you can join a gym for 3 months, lose some weight, then cancel your gym membership and still maintain your improvements.  But only a true lifestyle change can help you accomplish fitness goals.  Same goes for Optimization, also known as Continuous Improvement.  The shift out of project mentality needs to be addressed within your organization (culture), with your vendors, and especially with those who are going to “own” the implementation of your continuous improvements.

Step 3 – Budget For It

Closely related to Step 2, Step 3 is to budget for a process of ongoing optimization.  Since it’s not a project that ever should “end,” it should always be in the budget, right?  We’ve written before about our opinion that in a recession, optimization is the last thing that should be cut from marketing budgets.  If you join a gym and see improvements (you drop a few pounds, keep them off, and feel better in general), why wouldn’t you budget that gym membership for at least the next couple years?  Also keep in mind that “budget” doesn’t just mean a line item in a spreadsheet.  Budgeting your internal resources time is important, too.  OnTarget clients budget 10, 20, or 40 implementation hours for their team per month, for example.

Step 4 – Celebrate the Wins, Learn From the Losses

I’ve already written about celebrating the wins, even if they’re small.  Part of the celebration process is stepping back from the day-to-day process of Optimization and acknowledging that the process as a whole is effective.  And publicizing wins is probably the most effective way to make sure Optimization costs stay in the budget no matter what! As far as losses go, we define a “loss” as a tested optimization change that decreased a KPI.  One of the great things about digital changes is that if they don’t work, un-doing them is pretty quick and painless.  But, too many clients back away from testing, changing, and optimizing because of a loss or two.  Again using the weight loss analogy, weight fluctuates, and just because you gain back a pound that you lost, doesn’t mean you quit exercising.  The key is to learn from the failed change, and inform your next round of optimization.  That way, it just feeds back into your cycle of continuous improvement.

Hope this is helpful, and would like to hear your thoughts in the comments on if you think there are other Steps to Optimization that deserve a future post.

How much are you investing in analytics? My friend Mel Carson is asking on the Microsoft AdCenter Analytics blog.

In the UK last week Brand Republic reported that UK spend on search engine marketing would reach £2.75bn this year.

However, just a tiny fraction of that cash – £330m – was spent on the art of SEO or search engine optimisation. The lion’s share of web site owner’s budget went on paid search solutions like Google AdWords or Microsoft adCenter.

SEO is an essential and vital route to improving usability and search engine visibility of web sites. So with what appears to be a disproportionate amount of  time and money being allocated to this fine discipline, it made me wonder how much was being invested in web analytics.

When I say investment, I mean investment in people. Although many web analytics tools cost money to run, some are now free but you still need people to make sense of the data they provide.

Mel makes some great points and there are many reasons resources are not allocated to website optimization. In website optimization I am including search engine optimization, content optimization, making changes to the experience and testing.

Some of the issues are:

• Advertising is sexy and fixing websites in not.
• They haven’t yet bought in to how important good rankings are.
• They haven’t yet bought in to how important converting those visitors is.
• Web Analytics is viewed as a shared resource.
• There aren’t enough analysts around to interpret the data collected.
• Teams haven’t been set up to make changes based on the data received from whatever analysis exists .
• Budgets for making changes are considered capital expenses not operational expenses (Thanks @timlb).
• Companies have not realized the leveraged ROI that continuous optimization provides.
• Many corporate cultures prefer to throw money at a problem than do the hard work it takes to make improvements. Feel free to throw money my way
• The fact that many of the web analytics tools are free.  Managers can check off a little box on their list saying they do web analytics.

These are just some of the reasons. What are some of the other reasons? Please comment below.

It was the CEO of Omniture, Josh James, in January of 2005 who said “Web analytics can pay for itself with a single business improvement — so the real question is how quickly can companies make data-driven decisions? This willingness to change will ultimately dictate time to ROI.”

That is the point I will be addressing this week at New York University to the new students entering the Master of Science in Integrated Marketing. How quickly companies and make and act on data-driven decisions will be the main competitive edge over the next 10 years. Should it really take 11 months to respond to a YouTube video by one of your brand advocates?

Amazon has this culture of optimization.  If Borders or even Barnes and Nobles ever truly want to compete then they need to adopt it too. They need to get quick at making data-driven decisions and have a  process for continuous optimization.

What are you doing to change the speed of optimization and communication in your company? I’d love to chat with you about it.

Success on the web involves adopting a culture of continuous improvement. Which means plan (but remember good enough really is good enough), measure (get good at free then invest in more robust tools and analysis) and most importantly improve (transform your thinking from always being right to always be testing).

Let’s try selling optimization as the need for speed.  Moving fast is sexy and very profitable.

He was visiting the CEO of the Internet incubator we were advising about his portfolio companies in New York. The CEO introduced us and I showed Jason our “wacky and crazy” ideas of working with analytics, the importance of optimizing the experience, where you put certain elements on your page matter, the value of point of action assurances, etc. A couple of hours later, Jason volunteered to be our guinea pig site.

Just a couple of short years later, the sock puppet was kicked out the door, no one was crying for Boo.com, and the market tanked with many businesses following it. Jason profited while his competition couldn’t because he could afford to pay more for his traffic. After all, we initially increased his conversion rate by over 400% and then beyond. It wasn’t that hard

Today, Jason is still in the same business and still doing well, because he has never stopped optimizing.The market hasn’t crashed a la dot-bomb , but certainly budgets are being squeezed and we are all being asked to do more with less resources. The economy is sluggish and our customers are struggling. We’d like to help you during these difficult times.

Download our latest whitepaper “Grabbing Market Share: Marketing in A Recession” to learn what you and your organization should do about it. It was Blackie Sherrod who said “The reason history must repeat itself is because we pay so little attention to it the first time.” Don’t miss out, please take advantage of what we learned the first time around.

Invest a total of 5 minutes to download “Grabbing Market Share: Marketing in A Recession” and then read it.

Recessions are the economy’s little reminder that your marketing needs to be more efficient. Lots of our friends and clients are being asked to produce more sales with less resources. (And if you’re reading this post, that might sound familiar to you.)

Traditionally, in the offline world during recessions, marketers had their advertising budgets cut, then pressure was placed on sales teams to close more sales. But in the online world, marketers are expected to deliver both traffic from advertising and sales from the customer experience.

The math is simple. More sales with the same or less advertising means higher conversion rates. If your conversion rate is higher, not only will you be more profitable but you should also gain market share from competitors.

You may not always be able to control the cost of your advertising — except for when you cut it — but you can control your conversion rate.

In the interactive marketing world, many companies seem confused about what to do in a recession. Companies need to improve their online conversion rates. It seems obvious to most of us, but not everyone.

We want to ask you, our readers, for feedback. Have conversion rate improvements become a higher priority for your organization? If not, is it because you aren’t feeling the effects of the recession yet, or does your organization simply not believe it can control conversion? Or is it something else?

. .

Read the follow-up post, “3 Steps to Recession-Proof Your Online Marketing“

I don’t disagree with Sean about the absolute costs. Different companies may use a different mix of people so any given page may cost more or less. His point, that it’s more expensive than you think is a good one. Plus you probably now need to pay for traffic to that page; that isn’t cheap either and traffic is getting more expensive all the time.

My concerns are not with what Sean said. It’s what he didn’t say that disturbs me. Should companies include the cost of analyzing the traffic? Where’s the cost of various versions of the creative to test? Where is the entire cost of optimization in this calculation? Where is the accountability built into the process?

It’s 2007 and we’ve been writing about conversion rate optimization since 1999. For years everyone treated us like we were the crazy ones with all our conversion optimization talk . After two New York Times best selling books I assumed ( always a mistake) that our concepts were more mainstream. If in the land of the blind the one-eyed man is king then the fully sighted man is court jester. Are we still so “far out there” that building accountability into the entire process is crazy talk?

P.S. Sean does a great job defending agency costs. Why don’t agencies do a better job of defending the return on investment?

Last time I examined the qualities we value in a persuasive online copywriter. The way we look at it, copywriting for persuasion is about significantly more than using power words and devising catchy phrases. It’s also a lot more about speaking to your visitors’ buying process than it is pushing your sales process (that piece of the equation may be your raison d’être, but it must remain transparent to your visitors).

So, let’s say there’s this copywriter who understands and is skilled at writing for Persuasion Architecture. A client asks this copywriter to quote a price for a job. The copywriter tells the client $150 per web page. There’s a moment of silence before the client informs the copywriter she has another quote for $70 per web page.

How would the copywriter justify the higher price – and why would the client agree to pay it? Here’s how the copywriter should reply.

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