Good Digital Marketing = Good Math

by · February 25, 201311 comments

Ask good e-commerce or search marketing professionals how they build successful programs and you’ll hear them discuss things like conversion rates. Conversion rates are the percentage of a total audience that takes an action. I’ll take that a step further toward clarity and say that “conversion rate” is reserved for a monetary transaction. For other activities you try to motivate and measure (filling out forms, social sharing, answering questions and etc.), I prefer to use the term “action rate.” 

So, if you have 1,000 visitors to a web page and 200 of them fill out a form, then 20 of them actually purchase the product in question, you have a 20 percent action rate (200 of the 1,000 filled out the form … they took the action) and a two percent conversion rate (20 of the 1,000 actually “converted” to a customer.)

Search engine optimization and e-commerce experts live in this math. They know how many visitors to a given site or page it takes to produce one action. They then know how many of those actions they need to produce one conversion. They focus their energies then on two areas:

  • Drive the requisite numbers to the page to result in the projected conversions for their business’s success
  • Optimize the site or page so it takes fewer visitors and/or actions to achieve the same outcome

The more efficient the action and conversion rates on the back side of the site or page, the less work there is on the front side to get people there. So, in essence, this math is a microcosm of an effective business: Reduce costs and maximize revenue.

Your challenge this week is to determine what your action rate and conversion rate for your website, landing page or even social sites are. Then you can start reducing costs and maximizing revenue to optimize what you’re doing.

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About Jason Falls

Jason Falls

Jason Falls is a leading thinker, speaker and strategist in the world of digital marketing and is co-author of two books, No Bullshit Social Media: The All-Business, No-Hype Guide To Social Media Marketing and The Rebel's Guide To Email Marketing. By day, he leads digital strategy for Elasticity, one of the world's most innovative digital marketing and public relations firms. Follow him on Twitter (@JasonFalls).

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  • jasonstoddard

    Analytics (numbers) is not attribution.

  • http://twitter.com/cision Cision NA

    Hi Jason,

    This post tugs on my heart strings :) You did a great job of explaining an overwhelming topic in very simple terms and in few words. 

    We measure everything because that is the only way to track success. From the metrics that aren’t as important in a business sense: followers, mentions, retweets, likes, comments; to clicks, actions and conversions, we like to know where we’re at each month, if we’re improving, and how to do better.

    It’s also interesting to look at amount of time spent per conversion and how to drive that number down – for instance, if you spend 4 minutes to get each ‘action’ and only one turns into a conversion, how can we drive that down – which in the end is the same as what you said above, “reducing costs & maximizing revenue.” 

    I always hated math but social media and measurement, specifically, have turned me into a math nerd (don’t ask me to do geometry, though) :)

    Hope you’re well! 
    Best,
    Lisa

    • http://socialmediaexplorer.com JasonFalls

      Glad to be useful, Lisa! Thanks for chiming in.

  • Rudee

    I am constantly checking Google analytics to get a handle of this. I know this may sound stupid but I think it depends upon the day. If you have a business site, Monday and Tuesday people are just starting to get back into the groove of working. The big conversion day is Wednesday and part of Thursday and then people are getting ready for the weekend, so some days the conversion rate can by low and have nothing to do with how the site was optimized

    RudeeG

  • http://www.seobywebmechanix.com Arsham Mirshah

    “Search engine optimization and e-commerce experts live in this math.” <– that, my friend, is a FACT.
    From my experience, it's precisely 3.65 times easier to increase the conversion rate by 100% than it is to increase the traffic 100% (all things equal) :)

  • http://www.noggindigital.com/ Zach Kasperski

    I completely agree with everything said here. Although, I would like to add by saying that design plays a crucial role in whether or not a visitor is likely to convert. For instance, form design could make or break your conversion rates. I wanted to provide some value for those who are wondering how to best position their labels on forms:

    Right Aligned – These labels are great for illustrating clear association between label and field and requires less vertical space on the page. Problem is, they’re more difficult to just scan the labels due to the left rag. All in all, you can usually see the fastest completion times when using this format.

    Left Aligned – Use these types of forms with the data required is unfamiliar to the visitor. It enables label scanning, but negatively impacts the association between label and field. Also, changing the label length may impair the overall layout of this type of form.

    Top Aligned – These labels are great for when you’re trying to obtain data that the user is familiar with and with minimum completion times. Ie. Name, address, phone number. These type of forms usually require more vertical space, and you should pay attention to your spacing to enable efficient scanning.

    Best Practice – Use top aligned for reduced completion times and familiar data input. Use right aligned when vertical screen space is a constraint. And use left aligned for unfamiliar, or advanced data entry.

    Hope this helps! Cheers!

  • http://www.headwise.net/paid-advertising/ online Paid advertising

    Can we show every action made by member?

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