Setting Goals: Conversion Rate
A quick word about setting up goals with an analytics package. A goal is most often defined when a user clicks or takes action on something that generates a new page. For example, when a user completes a form and clicks on the “Buy Now” button and the “Thank You” confirmation of purchase page loads, a goal is seen as completed. Purchases are not the only web marketing action to measure, though. At its simplest, a goal is measured as completed any time a user clicks on something that loads a new page. By adding extra event tracking code to track behaviors such as e-mail sign-ups, downloads, clicking on outbound links, watching videos, completing a contact form, and more, the sales funnel can become increasingly clear. When someone completes a goal or desired action, web marketers call that a conversion. Many organizations evaluate several goals and use analytics to see the impact web marketing has on them. Suppose you are selling an item and you want the user to click on the product page, view a demo video, add the item to his or her shopping cart, fill out the order form, and then click on the “Buy Now” button. You can analyze each of these steps in the sales funnel in the Funnel Visualization report. By tracking this process you can see where you lose people and take steps to correct whatever needs fixing.
Don’t think that funnels are only for e-commerce. Most charities need to make 10 or more contacts with someone before that person donates. By creating a funnel (a series of actions), you can help your end users get to that conversion goal faster.
Different goals have different values for each website owner. For example, an expert may write for free for other websites but believe that the low traffic it brings has no value. If, however, the expert sets goals (like measuring the number of visitors from that site who sign up for an e-mail list), he or she may see that low traffic still converts to a huge percentage of e-mail sign-ups, thereby making the effort worthwhile. The more insight a marketer can have to look at the art of online marketing execution, the better. Think about what your organization’s goals are and put a value (either dollar value or importance) on each goal.
Measuring a Goal’s Return on Investment (ROI)
Putting a dollar figure next to a conversion event like a sale is easy, but don’t forget to put an ROI value for the steps that lead up to the sale. For example, if your sales team converts 10 percent of leads generated by the website to an average purchase of $1,000, then the value of each lead the website generates is $100 (10 percent of $1,000).
When calculating a particular conversion goal’s ROI, don’t fi xate on the immediate big sale. Keep in mind that web marketing is about having a relationship with the user. Some users may dip their toe in the water first by downloading free white papers, attending a webinar, then buying a small-ticket item before purchasing a big-ticket item. These small goals are part of a larger relationship funnel.
The true importance (or dollar value) of your conversion goals will emerge over time. As you make website optimizations, add new or different conversion goals, add web pages, and so on, conversion goals will change in value and importance. The key is to keep the online marketer’s focus on creating value, however it is measured by the organization.