When a company seriously dig into the world of online marketing, it can easily get lost in web analytics statistics and get astonished by different indicators.
Seeing these data can give people the false impression that now they understand the so far hidden online business processes and the behavioral patterns of internet users.
Of course, it’s no surprise that nicely presented indicators and statistics made by Google Analytics or Facebook have such a devastating effect on a layman. The problem comes when that layman cannot filter out the truly valuable and usable information and by combining them, fine tune his or her online communication. Moreover, if this person uses AdWords too, that makes things even more complicated as the admin interface of Google’s advertising system show even more colourful and intriguing statistics for him.
This is when the „fight“ starts to attract more and more visitors to our site. Everyone believes in different methods. Some say the secret lies in an attractive advertising text, others say it’s all about adjusting the costs-per-click, while others think optimization of the daily costs is the solution.
But no matter how much we can push down our average CPC (Cost-per-click) in a given competition or how much we can pull up our position, or to what level we can raise our CTR (Clickthrough rate). In fact, even raising our quality indicators does not matter that much.
But if the focus is not on these, then on what?
Most people will eventually lost in the magical effect of the indicators discussed earlier and completely forget what is most imporant: the conversion rate. Who cares if we can push down to 0,3 AED our average CPC or can raise over 10% our average CTR when we can’t sell a single product nor receive an inquiring e-mail or phone call?
The main question is how many conversions (purchases, orders) are made in a given period, let’s say, in a month. If this is noticeably few, then obivously we have to find the reason. Here comes the first test point.
1. Conversion rate
It practically means how many visits are needed for an actual purchase. It’s very hard to determine the average number as it may vary depending on the topic. If, for example, we sell fireboxes for fireplaces, chimneys and accessories for them we will probably need fewer visitors for a single conversion than if we sold watches, jewellry or clothing. Why? Because people like „just to look“ at a dress, a piece of jewellry or a wristwatch. Even if someone searches for miniskirts and click on our ad, it’s by no means certain that he or she intends to buy a miniskirt. It’s no more than looking around, because it is a product that is appealing and pleasant to look at. And it’s true for all fashion products. A firebox or an inside return of a fireplace, however, do not fall into this category as these are not that much appealing products to just stare at them for fun. If someone looks up „fireplace grates“ on Google, he or she probably intends to buy one, and not just stare at them because they looks so cool.
We can, however, say that the average conversion rate is around 1% which means that after every 100 visitors we can expect a purchase. As previously said, this number may vary depending on the product, whether it is an „appealing“ or „not appealing“ one. If this conversion rate, however, deviate from the average (negatively, of course), then something’s wrong, and we need to find the reason behind this.
If we need too many visitors to make a purchase, it can be traced back to three basic reasons:
– Something’s wrong with our website. Maybe the design, the web ergonomic layout is wrong or it’s simply too complicated to carry out a purchase, that is, the website is difficult to use, not transparent, discourage the customer.
– Something’s wrong with our products. Maybe the number of products offered is too few, the visitor don’t really have the opportunity to choose, or simply the are too expensive. We should never forget that our competitor is just two clicks away, it takes around one second for a visitor to go to their site where he or she may find a greater range of products or lower prices. And then why not buy from them?
– Something’s wrong with our customers. This means that our AdWords campaign is simply badly organized and it brings irrelevant visitors to our site. Maybe we use the bad key words, we do not „segment“ the given campaign enough and we redirect the user coming from a shorts ad to the trousers category.
If we can reveal the reason behind the low conversion rate and we succeed on improving the proportion of visitors and sales, then comes the measuring of the next factor.
2. Conversion cost
The gold rule of marketing, which most people, however, almost never fails to forget, is cost-efficiency. If we have been able to nicely increase our conversion rate, we need to examine how much it costs us making one single sale. Then this number has to be compared to our profit that came from the sale of the product or service. Our conversion rate can be very good and, say, it takes only 50 visitors to make one sale. Maybe, thanks to our our low average CPC, we need to pay only 0,3 AED for a visitor, so our conversion rate is only 15 AED. But what if we offer a product on which we only have 10 AED profit? Then we just lost 5 AED, no matter how good our conversion rate is or how low the conversion costs are.
The point is, therefore, to experience and find out what we can sell through AdWords in a sufficiently profitable way.
And what do we need for that?
An experienced professional and a lot of statistics. Of course we can try on our own, but then we will have to pay the price of learning, and it can be sky high