Does your website exist to generate leads or direct sales? If so, do you know how much your traffic is worth to you?
Surprisingly, not many businesses seem to know this, and therefore tend to stumble around with an unfocused marketing strategy.
Here are some simple formulas to get started:
Lead generation site
Your traffic x Conversion rate (traffic to enquiry) x Sales closing rate x Av. sale price = Revenue
Your traffic x Conversion rate (traffic to sale) x Average sale price = Revenue
A consulting business that uses it’s website to generate leads. Typically this sort of business has a low number of transactions but a high lifetime client value.
Monthly traffic of 850 x Conversion rate of 0.50% x Sales closing rate of 25% x Av lifetime value of $135,000 = Lifetime revenue of $143,438
This means that at current traffic and conversion rates every website visit is worth around $161 to them.
An e-Commerce business that uses it’s website to sell directly online. Typically this sort of business has a higher number of transactions but a lower average sale.
Monthly traffic of 4200 x conversion rate of 2.55% x average sale price of $85 = $9104
This means that at current traffic and conversion rates every website visit is worth around $2.17 to them.
Once you understand these numbers you tend to view your website and traffic very differently. You can also start to look at each of the levers (traffic / conversion rates / average sale) to see how you can improve your overall performance.
For example, imagine we improved each of the e-commerce company’s levers by 25%…
Traffic of 5250 x conversion rate of 3.19% x average sale of $127….
Monthly sales would jump to over $21,000, more than double their current sales from what could be some simple improvements to each of their levers. And now every website visit is worth $4 to them.
Of course, there are multiple scenarios that could come into play here and it really depends upon which of the levers are not performing as well as they should be. We often find that many businesses are great at converting traffic or enquiries once they get them, but aren’t very good at generating the traffic / leads up front. Others can be traffic machines with very weak conversion strategies.
The trick is knowing which levers to pull and how to optimise them for best results.
And that’s what we do here at Sticky every day. In fact, the two examples provided above are sites we work with.
The consultancy business is mature and well optimised, generating steady traffic, high quality leads and strong lifetime value clients.
The e-Commerce business is relatively new to us. Before we commenced working with them their online sales were negligible. In a short period of time their traffic has doubled, conversion rates have improved and sales have become respectable. As we steadily improve each of their levers (traffic / conversion rates / average sale) we expect to see exciting sales growth.
So do you know what your traffic is worth? Our Growth Marketing Accelerator is designed to focus on how we can grow your sales by optimising each of these important levers.