Web Marketing: How to Create Traffic and Conversion Scenarios

By John Arnold, Michael Becker, Marty Dickinson, Ian Lurie, Elizabeth Marsten

After you create your website’s financial goals, create a similar spreadsheet to show how improving your conversion rates can reduce the amount of traffic you need to make the same revenue as well as the amount of sales per month.

To determine your required visitations per month to meet your sales revenue goals, use the following formula, where S is the number of sales you need, C is the conversion rate (which is a percentage), and V is the number of website visitors needed to produce those results:

S / C = V

Adding this formula to a spreadsheet is not only critical to your creation of a budget and overall Internet marketing plan, but it also enables your ability to dream a bit as well.

Although 1 percent is a good starting point and maybe .5 percent is even more realistic as an average, why not triple the number displayed in the sales column or double your conversion rate to see how that reduces the number of visitors you need to acquire? Go ahead; no one is watching. It’s okay to dream!

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With a $27 e-book and the goal of making $1 million in revenue by the end of a year, for example, the formula would look like this:

3,086 / 0.01 = 308,600

Or, in simple language:

3,086 (sales per month) divided by .01 (a 1% conversion rate) = 308,600 visitors needed per month to reach your goal

Notice how much the needed monthly visitation drops with each small increase in conversion rate. Many marketers have proven that spending your efforts testing ways to increase conversion rates — rather than focusing solely on increasing traffic — is far easier (and certainly less expensive).

Here are a few significant insights for analyzing information like this:

  • Predictability: You can predict how much revenue your business will see next month — and over the coming months — based on the traffic you generate over just one week’s time.

  • Reactivity: When you recognize that visitation decreases suddenly or your conversion rates drop, you have the opportunity to investigate why — and make immediate changes. A shift of even one-quarter of a percentage rate increase or decrease could mean the difference of thousands of dollars.

  • Testability: One of the greatest features of the web is that practically anything online can be changed. Gone are the days when you have to pay a designer to build your website once and never get to change anything. Today’s tools allow you to constantly test, tweak, and try new things to increase conversion rates and visitation.

    You don’t have to wait until you see a severe drop in visitors or sales to do something about it. You can always be working toward increasing those results!

You can easily see the importance of continually monitoring visitation and conversion rates. Such good practices make up the basic fabric from which you make all online promotion decisions going forward.

More than half of prospective clients who seek Internet strategy help don’t know their visitation or conversion rates. Get the answers before you call a service provider for help. The provider’s first two questions will be to ask you those rates.