Web moves fast. Technology changes faster than Denver’s weather, and while the pace is exciting, it can also be overwhelming keeping up. I sometimes feel like a dinosaur because I’m not on Pinterest yet (gasp!).
But I’m ok with that, because I have a framework for prioritizing my web marketing efforts, and I’ve determined that while Pinterest has its merits, it would be a very small fraction of my overall marketing strategy.
Let me explain.
Your website’s revenues depend on three factors:
– Getting traffic
– Converting traffic
– Having a positive dollar value for conversions
Multiply those three numbers together, and that’s your revenue:
Revenue = T x CR x VC
T = Traffic
CR = Conversion Rate
VC = Value of a Conversion
For example, let’s say your site has:
– 10,000 visitors a month
– 2% conversion rate
– Conversions are worth $100 each
Your site’s revenues are 10,000 x 2% x $100 = $20,000/month
If any of those numbers on the left side of the equation are 0, you’re not making any money. Yet businesses spend a disproportionate amount of time and money on traffic alone. In fact, according to Bryan Eisenberg, for every $92 companies spend driving traffic to their sites, only $1 is spent converting it. Ouch!
But those three factors – traffic, conversion rate, and the value of a conversion – are equally important. Neglect any of them and you’re doomed.
Let’s drill down on each one:
1. Traffic is broken down into paid or earned (not free; traffic is never free).
a. Paid traffic is like traditional advertising, where you pay for clicks on, or impressions of, your ads.
b. Earned traffic is broken down into SEO or Social Media, where good content and strong networks matter.
i. SEO can be further divided into on-page vs. off-page efforts, as well as local and non-local rankings.
ii. Social media is divided into about a million different platforms – of which Pinterest is one.
2. Conversion Optimization is a systematic process of finding and fixing problems on your site.
a. Finding problems consists of using web analytics to identify problems and gathering user feedback to figure out why those problems exist.
b. Fixing problems entails creating hypothesis and running A/B or multivariate tests.
3. Value of a Conversion
a. For ecommerce sites, this is your average order value, which can be increased with upsells, cross-sells, and price anchoring, where you show the most expensive item first so the other products seem more affordable in comparison.
b. For lead gen sites, it’s the value of a lead. It means determining how much a phone call, chat, form fill, etc., is worth to you, and how many of each you need, before you can close a deal. And when you do, it’s up to your salespeople to optimize the value of those deals. There’s a lot of salesmanship behind the questions you ask in your forms, for example, to lure the right people into filling them out.
See where Pinterest fits into the grand scheme of things? This isn’t an argument that there’s no good traffic to be had from it; it’s just that it’s a sub-sub-sub-factor of one of three equally important factors. It shouldn’t demand too much of your time simply because it’s a shiny new channel.
Continue to embrace new technology as it emerges. But don’t beat yourself up if you’re not the first one to master the latest social media craze. Keep the big picture in mind and focus your efforts equally on getting traffic, converting it, and making money from those conversions.