If you really want to make your website work as hard as it could and help you make money 24/7, there are three things you need to optimize:
1. Getting enough targeted, qualified traffic
2. The percentage of your traffic that converts into paying customers
3. Your customer retention rate, and the number of customers who turn into your evangelists.
Interestingly, many online entrepreneurs these days are still only working on getting more traffic, traffic, traffic. Lots of courses and ebooks are being sold about increasing traffic. A lot of hype is built around traffic, but very little is mentioned about conversion optimization.
I find this weird, because actually for smaller businesses (who have more limited resources compared to bigger businesses), working on increasing their sales conversion has more advantages (and could yield more ROI) compared to trying to get more traffic.
(Don’t make the mistake of saying SEO or Social Media Marketing (SMM) is “free traffic” because SEO and SMM take a lot of time – plus constant, continuous implementation. Unless you have slaves working for you for free or you consider your time to be worth $0 per hour then yes you can say doing SEO and SMM are “free”)
Think about it:
Suppose you’re selling a product worth $100, and you’re getting at least 200 visitors per day to that product page. Let’s suppose that you currently have 0.5% conversion rate (for every 200 visitors, 1 person buys).
Now let’s pretend that instead of trying to get more visitors per day, you focus your efforts on increasing your conversion rate instead.
Product price $100/unit
Traffic 200 visitors/day
Conversion 0.5% (1 purchase per 200 unique visitors)
= $100 gross revenue / day
What if you are paying about $1.00 per click? That means you are actually spending $200 to get 200 daily visitors. So effectively you are making a loss of $100 if your conversion is 0.5%! To illustrate :
Traffic Cost 200 visitors/day x $1 per click = $200 per day
Conversion 0.5% (1 purchase per 200 unique visitors)
= $100 gross daily revenue MINUS $200
equals – $100 loss per day
If you are using exclusively PPC or other paid means to drive traffic to your site, it’s even more VITAL for you to actively optimize your conversion rate. Otherwise you’ll be constantly in the red.
Now what if you made a change to your website and it resulted to a new conversion rate of 2%? That means going from making 1 sale a day to making 4 sales a day. In terms of dollars, that’s going from $100 to $400 daily gross revenue.
Product price $100/unit
Traffic 200 visitors/day
Conversion 2.0% (4 purchases per 200 unique visitors)
= $400 gross revenue / day
MINUS $200 (traffic cost)
= $200 per day
So just by getting from 0.5% to 2% conversion rate, now you are making a net profit of $200 as opposed to a $100 loss - from the same amount of traffic!
Conversion Rate Optimization (CRO) is that powerful. It can literally make or break your business.
Simple Changes, Big Gains 
Now what if all you did was actually change the headline of the copy?
Or change the graphics at the top of the page?
Or you renamed the product from a vague name to something more benefit-oriented?
Yes, simple, little changes like these could actually result to big increases in conversions. Sometimes changing the headline or header banner of your sales page could dramatically change your results. Sometimes, restructuring the order of how certain elements appear on your sales page could be the difference between breaking even and making a profit.
(Caveat: not all changes you make will result to higher conversions. That’s why conversion testing is done, to establish which versions generate the most desired responses)
So now I hope you understand exactly why more traffic doesn’t necessarily mean more sales. You could end up spending lots and lots of time and money trying to generate traffic, but if your conversion sucks, you could end up at a loss.
We’re not saying “don’t try to increase your traffic” – NOT at all. What we’re advocating is that if you want to get the most out of the existing traffic you have, you must start optimizing your conversion.
If you don’t, you could end up joining others who are earning the money they’re earning now, completely ignorant to the possibility of doubling, tripling or even quadrupling their monthly revenues!
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Factors that Influence Your Site’s Conversion Rate
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When I work with clients who are new to Conversion Optimization, one common belief they have is that they think improving their conversion rate is 100% all about how they design their page or how they craft the sales copy.
Of course, this isn’t the case.
Your site’s conversion rate is influenced by other factors – factors that are NOT necessarily on your website.
Conversion Influencers
Understanding these off-page factors that influence your site’s conversion rate will help you move the conversion rate needle as much as possible and turn things in your favour.
Let me give brief explanations of some of the factors mentioned:
How You Communicate
Your conversion rate is influenced heavily by how you communicate. I’m not just talking about your copy, but more about:
Remember that when you communicate, it’s not about you, it’s about THEM.
It’s not about what a God’s gift to humanity you are, it’s about how your offer can turn your prospects into sexier, healthier, richer, more good looking, more fulfilled, more peaceful, joyful human beings. You get the idea.
Your Marketing Funnel Design
Your marketing funnel is the process you use to turn a prospect from being a stranger, into one of your raving fans or (better yet), business evangelists.
An over-simplified marketing funnel looks like this:
Traffic Source -> Lead capture form -> Communication -> Sales Page
Where:
Like anything you do, you must test your marketing funnel design to find the optimal process.
For example, some people’s marketing funnel looks like this:
Traffic Source -> Lead capture form -> Sales Page
or
Traffic Source -> Sales Page
or
Traffic Source -> Lead capture form -> Communication -> Relationship Building -> Free Consultation or Product Tour -> Sales Page
Conduct tests and find out if a specific product convert better when you change or rearrange the marketing funnel. For example, if you’re selling a complex, highly technical offer that’s new to the market, you might want to send prospects to an educational material first (a webinar or a teleseminar or video series – whatever works) before you make an offer.
At this point I’ve pretty much said things you probably already know. Now let’s tackle other factors that affect your conversion:
The Complexity of the Sale
Selling a product that could pass as an impulse buy (e.g., it’s cheap, there’s little or no risk involved even if it turns out to be a bad buy) is not the same as selling a product that’s expensive, requires ongoing investment, tricky to maintain, and risky (if the buyer made the wrong choice they could lose their savings, or lose precious time or lose face, etc)
Consider the buyer’s thought processes, their buying behaviour and the buying process they would use when they evaluate your offer. When you plan your sales and marketing processes or when you design your website, consider how complex a purchase of this sort is.
If you’re selling something and the purchase typically involves more than one decision-maker, modify your communication strategy so you address the concerns and buying motivations of all the potential decision makers.
The Quantity & Quality of Traffic You Attract
Are you attracting targeted, qualified traffic?
Are you attracting “the MAN”, or the person with the Money, Authority and Need?
Or perhaps your communication strategies are appealing to people with the need but not the money or authority?
(If your webpages have bounce rates higher than 60%, it might be because you’re attracting the wrong crowd in the first place.)
Importance/Urgency
Think of need as a spectrum that we can describe this way:
Your prospects will be at varying levels of this spectrum. Their level of need/urgency is also affected by many factors (not just your persuasion skills), but with some skill, you can slowly but surely take them from level 1 to level 3, and then from level 3 to level 5. It might just take some time and patience
Prospects’ Level of Sophistication
How well your page converts is affected by:
Ask me to buy a car and I wouldn’t have a clue what to look for, what questions to ask the salesperson or how to spot a good/bad deal. But ask me to hire a personal trainer and I’d know exactly what to look for and how to evaluate whether or not a certain trainer is worthy of my time & money.
The same goes for your prospects. If your offer involves many complex things to evaluate, many of your prospects likely need to be educated first. So instead of pressuring them to “buy now”, focus on educating them and genuinely helping them make the right decisions for them.
Sometimes people don’t buy NOT because they doubt the effectiveness of your offer or your ability, but because they doubt their own ability to take your product/service and make it work for them.
Sometimes, raising your conversion rate may NOT be a matter of telling prospects to buy, but more a matter of empowering them and helping them believe that they – with your help and expertise and good looks – can make it work.
Perceived risks
Risks pertains to:
The trick of course, is to demonstrate to them that the benefits of going ahead with you far outweigh the risks. Put another way, demonstrate to them that they could potentially be in a much worse situation if they don’t make the change you’re asking them to make.
Your competitors
Even though your competitors’ strategies and tactics are outside of your control, their effects on your prospects can be influenced or counteracted by your own strategies and tactics.
Prospects’ economic or personal situation
Sometimes there are people who really want to buy your stuff or hire you, but the timing isn’t right or their economic situation doesn’t leave much room for all the purchases they want to make.
Consider putting marketing strategies to help these people take the next step with you when they are ready.
The Macro environment
When the Nuclear catastrophe happened in Japan, I heard that sales of geiger counters online practically rocketed. If you’re one of the merchants selling these products, you’d know that the sudden rise in your conversion rate had nothing to do with your brilliant copy.
There are things that are happening outside our direct control or influence:
Conclusion
Raising your conversion is not just a matter of design or sales copy or changing graphics. There are many other factors that play a part, so do your best to influence a much of these elements as you can.
Although there are things that are outside of your control, it helps being aware of them and to strategize how you could respond to these influences.
The above list is by no means complete, so feel free to edit the table and add your “conversion rate influencers”!