Why ROI Is More Important Than Visitors
For years, web marketers spent a lot of time driving traffic and visitors to websites in hopes that some of that this traffic would lead to conversions (or leads, sales, etc). So much emphasis has been put on traffic that many new webmasters thought that the more visitors they could get to their websites the more successful they would be. But a run-in with reality (and the change of economic times) changes that perception really quickly.
While visitor levels to a website is important – highly targeted visitor levels is and should be more important – the real sign of success with your search engine marketing and online marketing efforts is the ROI or return on investment. I’d much rather have a low-trafficked website making a profit than a high-trafficked website floundering in the red.
So how do you get there? To a positive ROI? Does it involve building visitors and testing?
Well, search engine marketing is the key to success for any website. But not all search engine marketing is equal. Instead of focusing on attracting raw traffic numbers, you should focus on getting targeted traffic to your website and determine what one visitor is worth to you. Furthermore, put a dollar amount on one visitor that converts – a sale or a lead that you close into a sale. When you can determine what a conversion is worth to you then you can determine how much you are willing to pay to get that conversion. After that, it’s all strategy. Focus on the ROI, not the traffic. Also another important take away here is test, test and re-test. Once you are achieving a good return at a small visitor level, then slowly build the results to increase your sales and lead volume, while keeping your ROI in line.
Believe me, this is easier said, then done, but with the right approach, patience and an open mind you can achieve excellent ROI from your search marketing efforts over time…hopefully this post has helped you just a little bit!
4 Responses to “Why ROI Is More Important Than Visitors”
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At a talk given most recently in Shanghai Dr. McDougall introduced the term Return on Participation(ROP). It has three significant sentiment, reach and authority. I tend to agree with this approach more than simply stating ROI. And obviously making a profit is the bottom line but if you look at some of the efforts and how people are using their websites it is not only for online purchases where you can see direct relationships between marketing efforts and purchases, but there are also campaigns where this cannot be measured. There are campaigns for musicians who are looking at ROP more so than selling their music. And for many of them there are multiple sites where they sell their music so it is difficult to track back to which campaign had the most impact. Local events also run into the same issue where they realize that they have more people in attendance but they cannot attribute which marketing campaign had the most influence. With ROP you can see this in effect doe to tools available to track these campaigns. One such tool I use is Raven to help me better understand my efforts and deliver these results to clients.
Hi Social8Media,
Thanks for sharing your thoughts and your comments with our readers…take care!
I always work on the goals of getting traffic to the website and then deriving commercial value from the traffic on the website as two distinct objectives, with many times separate but obviously congruent strategies, separate actions and separate measures of success. Targeting helps of course, but we as an industry have focused almost exclusively on targeting and not nearly enough on changing the marketing approach.
Digital, interactive channels provide the opportunity to be more truly customer-centric, by focusing the approach to the customer on the website on providing a solution to their needs, and not just modeling what the next most likely product to purchase might be. Commercializing an audience requires an approach focused on building a relationship and not merely generating a transaction. That means utilizing automated interactions to assess customer needs and preferences, not just model them based on observed behavior.
Most retail-based web sites are organized very much like digital product catalogs . .. they say “here’s what we have to sell, here’s what’s on sale, here’s an offer you might find relevant”. Targeting helps this approach be more effective, no doubt.
But suppose the site was organized around needs . . . and asked “what would you like to buy today, what’s on your shopping list, how can we help you?” That approach requires a very different kind of automated experience and back-end. It’s not rocket science, but it seems to be from another planet!
Hi Bob,
Excellent points! I could not agree with you more! Some of the best ecommerce websites provide good quality, priced products but do often provide a very customized and customer centric shopping experience. Sites such as Amazon and Zappos come to my mind as excellent customer focused sites that go beyond generating excellent ROI, simply put they create a good shopping experience.
Anyway, thanks for your insights and your comment!