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How do you think about your conversion rate?

You have probably thought about what your most important online conversion is–check out (if you’re an e-Commerce site), call on the phone, fill out a Web contact form, or something else (if you’re not an e-Commerce site). Good Internet marketers pay close attention to conversion rates, checking their Web analytics to see how many folks came to the site and how many actually converted. But admit it. Are you a good Internet marketer?

Many marketers I speak with let it slip when I ask them. They really don’t look at the numbers. Oh, somebody does. Some green eyeshade guy in the analytics department who e-mails a link to a report each month–a report you never look at.

If I really press marketers, they often haven’t even thought through how to calculate their conversion rate. If you sell low-consideration products, such as Amazon, then people come to your site every day who complete their purchases in the same visit. Amazon should divide the number of purchases by the number of visits for their conversion rate.

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Photo credit: Stefson

But you might sell a high-consideration product or service, such as a car or a consulting project. Your customers likely visit your site several times before they convert, so you don’t want to figure your conversion rate based on visits, but rather on unique visitors.

Think about it this way. If every visit to your site could result in a purchase, then divide by visits. If your customers would never buy from you three visits in a row, then divide by visitors. So, ask yourself if you’ve thought this through. Do you even know how you’ve calculated your conversion rate?

In some sense, it doesn’t matter, because what you care about is the trend–the difference between last month’s conversion rate and this month’s, for example. As long as you use the same method each month (divide by visits or divide by visitors), you can still compare last month to this month to make the decisions you need to make.

But, at a deeper level, it does matter. What I have called mini-conversions (and Avinash Kaushik popularized as micro-conversions) depend on following visitors step-by-step. Instead of looking at the big conversion at the end, look at the smaller steps that people take along the way and how your marketing is persuading them to take each one. By dividing by the right metric, you can look back over multiple visits (or not) to improve your marketing.

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Mike Moran

Mike Moran is an expert in digital marketing, search technology, social media, text analytics, web personalization, and web metrics, who, as a Certified Speaking Professional, regularly makes speaking appearances. Mike’s previous appearances include keynote speaking appearances worldwide. Mike serves as a senior strategist for Converseon, an AI powered consumer intelligence technology and consulting firm. He is also a senior strategist for SoloSegment, a marketing automation software solutions and services firm. Mike also serves as a member of the Board of Directors of SEMPO. Mike spent 30 years at IBM, rising to Distinguished Engineer, an executive-level technical position. Mike held various roles in his IBM career, including eight years at IBM’s customer-facing website, ibm.com, most recently as the Manager of ibm.com Web Experience, where he led 65 information architects, web designers, webmasters, programmers, and technical architects around the world. Mike's newest book is Outside-In Marketing with world-renowned author James Mathewson. He is co-author of the best-selling Search Engine Marketing, Inc. (with fellow search marketing expert Bill Hunt), now in its Third Edition. Mike is also the author of the acclaimed internet marketing book, Do It Wrong Quickly: How the Web Changes the Old Marketing Rules, named one of best business books of 2007 by the Miami Herald. Mike founded and writes for Biznology® and writes regularly for other blogs. In addition to Mike’s broad technical background, he holds an Advanced Certificate in Market Management Practice from the Royal UK Charter Institute of Marketing and is a Visiting Lecturer at the University of Virginia’s Darden School of Business. He also teaches at Rutgers Business School. He is a Senior Fellow at the Society for New Communications Research. Mike worked at ibm.com from 1998 through 2006, pioneering IBM’s successful search marketing program. IBM’s website of over two million pages was a classic “big company” website that has traditionally been difficult to optimize for search marketing. Mike, working with Bill Hunt, developed a strategy for search engine marketing that works for any business, large or small. Moran and Hunt spearheaded IBM’s content improvement that has resulted in dramatic gains in traffic from Google and other internet portals.

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