SweetPeaKate

A Couple of Additions to the Conversion Rate

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Knowing the results of our performance metric is the basis for a sound strategic direction in our business.
IDT Energy had 10,000 advertising sales 200 = 50 euros / sale
Or what would be the same:
Cost-per-action advertising cost = / conversions
? ara we used to know our cost per action (CPA)? To have another vision of spending on advertising we do, besides the well-known conversion rate. With cost-per-action data in hand, we have more clear whether the investment we are making in other sites or search engines that we are coming or not profitable. Ideally, the cost per action is as low as possible.
I say this and I was so wide, as if it were easy. Well, maybe it is not easy, but surely it is not impossible to reach the minimum slowly? ? s do this? We can try to reduce the cost in advertising, and we see as influencing the number of conversions to leave the set â ? ?minimo advertising budget and maximum stock completasâ ? ?. On the other hand, strive to increase our conversion rate, and if we will improve our site.
We focus on the process, thoroughly studied the past in the same time, the route followed by the users, the effectiveness of the form itself? and, after segment, focusing on those who do not complete? ? where abandon it? ? or where they go? ? or whether it takes the step to form?

If still not convinced that the cost per conversion, we can open our eyes about what we do with our money for advertising, we can combine this metric with another equally interesting to find out that gain value for each conversion. With this measure the effectiveness of our joint strategy in advertising on our site and to convert visitors into profitable customers.
To find out which gives us a profit conversion, we must choose in advance we will give value to each action (may be the same price of a sale) and get the benefit, if we count the cost in advertising (the profit margin Left).
Return back to our example, last month spent $ 10,000 in online advertising, we have generated 20,000 visitors and 200 of them have purchased the product offered, now we believe that each sale generates 60 euros, with a profit margin of 90% :
60 euros x 90% = 54 euro profit
That would be:
Conversion value = average value of the conversion x% profit margin
That is, we have created 54 euros for each visitor conversion.
If our action or conversion generates no money (not a sale), we can bring value to each category. For example, fill out a form can be equivalent to earning $ 50, you can reply to an email valued at EUR 60, to be more than 2 minutes on the site and see more than 2 different pages would be equivalent to 30 euros? The key is to always use the same value for the same actions, and can see trends over time for each category.
When comparing the cost of conversion to the value of conversion, we will have more data to know that we must continue making strategy, which we must try to adjust, change or simply to increase the performance of our actions.
If the cost per conversion is lower than the value of the conversion, making money and we can increase the budget for advertising and follow the line that we have in our web.
Conversely, when the cost of conversion is greater than the value that we assumed conversion, we are losing money and we have to investigate alternatives to the advertising, or that we can carry out actions on our website to dramatically increase the rate of conversion.
The value of the conversion will be our reference point to decide whether to increase the advertising budget, or make the necessary adjustments before sacrificing profitability in a poor performance of the strategy of advertising or the website.
Eye, I am consciously ignoring what the publicity we can generate in terms of brand value or future visits / purchases are not made in the period. But I wanted to make a simple example, and as clear as possible of what we can actually quantify, and may represent 70% of the final goal, leaving the remaining 30% for those elements most ?cualitativosâ ? â ? (for example, those who look for products online and then end up becoming so offline).
Knowing the cost, value and the rate of conversion of jointly establish a benchmark for determining whether we are near, far or in the same goal. We are sure that we are on the right path first, or we are in time to redirect and make the most.
In etc | rate rebound to turn to? Bounce rate?
In etc | This is the plan: segmenting, segmenting and targeting
In etc | Getting to an analysis of our website: Top Pages and Referring URLs
In etc | Rate Conversion: strategic measure of our performance

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