Conversion Rate Doesn’t Matter-For The Most Part

I was speaking with a client the other day about his site. He said he was fairly pleased with its performance as the conversion rate was 3%.
I paused and took a breath.
Did I really want to get into why that is a meaningless statistic? No: “I really don’t want to go into why that is a meaningless statistic, but yes your site has been performing better lately.” Luckily I have built up some level of trust to where it was okay to leave it at that.
What I mean to emphasize is that aggregate conversion rate tells you nothing about your website or business. However, it is a statistic that is commonly referred to as meaningful (especially the higher up the corporate ladder you go). Adding to the confusion, in the web world, I am not certain the definition of “conversion rate” has been uniformly established. Does it mean:
1) Total number of conversions/ Total number of visitors
2) Total number of conversions/ Total number of people who added items to the cart*
In my mind when we in the web world talk about conversion rate, most mean #1.

Why is Aggregate Conversion Rate not important?
Aggregate Conversion Rate is not important because you will always be willing to sacrifice your conversion rate for increased revenue.
For example:
Say you are paying $1/ visitor and converting at 5%. You get 100 visitors a day.
I tell you that there is a potential stream of traffic that you have not taken advantage of. This stream costs $.10/visitor and converts at 1%. (Both customers spend the same amount).
Would you want the traffic?
Would you be happy with increased revenue and decreased conversion rate?
Yes, of course. This would be great.
Could this ever happen? Yes, it happens all the time. Each revenue source (or channel) converts at a different rate and will change your aggregate conversion rate if you decide to incorporate that channel. The content network might convert at a different rate than the search network. As long as they are both profitable, they are worthwhile investments.
Never focus on the conversion rate, focus on profitability and maximizing conversions.

*Number #2 has something to do with abandonment rate. That is, conversion rate + abandonment rate will always add up to 1 (or 100%). We do not have a good term for conversion rate #2 (that I can think of) so we refer to its opposite term, the abandonment rate.

Using Keywords for Competitive Intelligence

If a competitor is targeting a keyword it is very likely that those keywords are leading to sales (or conversions). If you had this knowledge you could put it to good use:

1) Is there a hot product that you haven’t noticed because you’re too busy trying to run your business?
Did you not know that people were already selling model X-2011 already?
Competitive Intelligence can help fill that gap: Order model X-2011

2) Do you sell a great product but people refer to it by another name?
Are you selling “horses” and calling them “mounts”?
No one will find you; no one searches for ‘mounts’ when they are looking for a ‘horse’.
Competitive Intelligence can help you with that: Change your copy.

3) Is there an area you have not explored that your competitors have?
Are you only selling gold jewelry and your competitors thought to sell beaded jewelry? Your customers would never buy that!
They are already buying it. From your competitor! Perhaps you should stock it.

There are endless examples.
Competitive analysis can help you fill the holes in your research and get a leg up on the competition. Don’t reinvent the wheel- learn from others.

Free Google Analyics Installation Promo

Rose Osprey Marketing is kicking off a new promotion: we will install Google Analytics (for free!) for any corporate or commercial website.

Why?

We are offering to our customers a chance to get over that initial hurdle towards developing a successful internet marketing program. In the process, we gain exposure to the fine people who need our service.

When?

We anticipate running this promotion indefinitely, though it will depend upon the response.

How do I sign up?

Click for: free Google Analytics installation.

I have five goals I want to track. Will you configure them all for free?

No. We will configure one for free. Advanced configurations and connecting the account with Adwords may be purchased; or it can be done on your own.  (Please inform us if you have already purchased a PPC, SEO, or Analytics package as advanced configuration is included at no additional cost).

Do you install Omniture or Webtrends for free?

Not at this time.

 *Please do not use this service if you are getting paid by someone else to set up their account.*