By Don Sturgill
Did you know most companies spend $92 in the effort to get someone to visit their website for every $1 aimed at converting that visit into a sale?
Statistics: Sales people love them. Customers are awed by them. And sometimes we are shocked by them.
Statistics are sometimes accurate and sometimes inaccurate — and whether or not they “sound true” is never the deciding factor.
Are you moving or standing still?
For instance, did you know that – even though you may feel as if you are absolutely still – the planet Earth is moving at an average of about 67,000 mph on its annual pilgrimage around the Sun?
But, wait … that’s not all: The Sun and the Earth are simultaneously on a journey around the Milky Way. That means you are also, right now, moving at 483,000 mph in an even larger circle.
Moreover, the entire galaxy – you guessed it – is in motion … headed to God-only-knows-where at a rather rapid pace.
Do you “feel like” you are constantly moving at almost half a million miles per hour? It doesn’t seem so, but mathematics and astronomy insist its true.
Statistics can be fun. And sometimes, they can be almost unbelievable.
Have you checked your Conversion Rate statistics lately?
Let’s get back to the first assertion: Do companies really spend 92 times more to gain traffic than they invest in converting traffic? Many experts say so …
But, what’s the source of that conversion statistic?
92:1 is an astounding figure, indeed. How can we determine whether or not it is trustworthy?
Did all those Harvard and Yale graduates really become millionaires?
Experience tells me that statistics, of any type, aren’t always backed by sound, reproducible data. Rather, the quoted idea “sounds good” and morphs into a type of meme – a catchphrase that sounds so true that it “must be true,” but may have no more grounding in reality than duplication on a gaggle of websites or mention in a popular book.
For instance … have you heard about the Harvard (or was it Yale?) study where it was determined that only 3% of the graduating class had taken the time to write down their goals? Ten years later the researchers tallied up the net worth of the class, and they were amazed to find the combined wealth of the goal-setting 3% exceeded that of the combined net worth of the the other 97%. How’s that for getting more bang for your buck?
Hard to believe, isn’t it? Just writing down your goals means you are much more likely to become wealthy than those other poor jerks who don’t have time to set objectives.
Goals are important. There is no doubt about it. Are the statistics accurate, though?
Blogs, magazines, and motivational speakers love to talk about the now-famous study … yet there is no real proof it ever took place. If you can find the research, please let me know. I tried and tried … but could not locate it in any of the academic journals I searched.
Listen … it may be that the Harvard/Yale goal-setting study claims are absolutely correct and validated. I have yet to see the corresponding study, but that does not mean it is a hoax. It only means I can’t find it. If you know where it is, please let me know. My goal here isn’t to slam-bam anyone’s work or beliefs, but to point to something even more powerful than statistics: a close look at reality is more important than favorable statistics — and if that salesperson quoting stats can’t back the inferences up with case studies and hard data, then you should run, don’t walk, to the nearest exit.
How would it make you feel, if you discovered a favorite statistic you love to quote is absolute made-up hogwash or derived from very limited and tenuous data? A bit duped, perhaps – even gullible?
Relax, we are all in the same boat. Sometimes, all we have to go on is our gut and our BS meter. Always trust those two gauges, even when the expert is someone who normally shoots straight. It could very well be that the expert has been taken on a ride too.
How to avoid being caught by BS statistics
Not only can quoting a statistic that later turns out to be false make you look like a fool, following unreliable advice is like trying to chew steak with a tooth that needs a root canal: it can hurt … badly.
The next time you hear a statistic that sounds too good to be true or so outlandish you wonder how people can be missing the boat so readily, make a focused effort to track down the source.
Just because the author links to a reference, it doesn’t mean the idea is proven. Follow the link. Is there bona fide research data behind the statement … or is it only a “he said, she said, they said” trail that may actually be only hearsay?
At first, I was skeptical of the 92:1 statistic, but Conversion Max’s CMO and co-founder, Theresa Baiocco, chased it down. “$92 spent on visitor acquisition, to every dollar used to increase Conversion” may sound like something a landing page sales manager pulled out of her pocket — but it is actually a stat from Econsultancy’s 2013 Conversion Rate Optimization Report.
BUT, is it a figure you can hang your hat on? Got me. One would need to contact Econsultancy to find out more about the methods used and the statistical accuracy of the claim. You could then apply standard assessment of research validity techniques to form your opinion.
Personally, I prefer to consider the ramifications of the apparent gulf between getting visitors and attending to them — then look at my own practices to see whether or not the statistic holds true for me.
To really find out where your business stands, take a look at your own Conversion Rate statistics
How much is your company spending to acquire website visitors? Do you know? Wouldn’t that be a valuable number to have?
And how much are you investing on converting those visitors into paying customers? That could be a tough thing to figure out, couldn’t it? The math is simple enough, but coming up with the numbers to plug into the formula could be daunting. Forget statistics for a moment … what is the reality in your situation?
If you don’t know your Conversion Rate numbers, should you? How can they be determined?
One more question: Which is more important to bottom-line revenue: Total number of Visits or Total number of Conversions?
Many companies mistakenly concentrate solely on increasing the amount of traffic to their website. Others worry only about Conversions. The truth is there are a number of factors involved in internet marketing profitability — the topic can get downright sticky — but one thing is certain:
Assuming your offer is profitable – that you are bringing in more money on the sale of your product or service than you are spending to provide it – then the higher your Conversion Rate, the more revenue you will generate.
*** Please note I am not saying the Conversion Rate is the ONLY important number … and please note I said ASSUMING your offer is profitable. Undoubtedly, you should work to increase the spread between the cost of goods sold and the selling price. All things considered, though, your Conversion Rate is a critical factor in your revenue.
1000 visits that result in no sales are less valuable to the immediate bottom line than are a handful of visits that brings in sales … assuming your offer is profitable in the first place.
There are some businesses that are not profitable. They are losing money, not earning money. That is not the preferred method of doing business.
Consider, for instance, the beleaguered high-lead logging company owner who won the Oregon lottery, He was paying more for fuel and stumpage than would allow a positive return on investment.
When asked what he would do with the lottery winnings, the logger tipped his hat back, scratched his head, and said, “I guess I’ll just keep on logging until it’s gone.” (A special “hup-ho” to my buddy, Dan King, owner of King Logging, Myrtle Point/Coquille, Oregon.)
What can you do to increase your Conversion Rate statistics?
Whether your spend rate is 92:1 or 1:92, one of the questions central to successful internet marketing is this: “Once I have done everything I can do to lower my expenses and cost of goods sold, what can I do to increase sales?”
Pay attention to statistics. Use them as a guideline, but always remember this:
Without sales, nothing else is going to last for long in a for-profit business. Watch the other players and the scoreboard, for sure, but never take your eyes off the ball.
Here are some resources to help get you going:
Find out more about how to optimize for better Conversion Rate statistics and bottom line sales. Call 888-659-2680 for a free consultation with the Conversion Max team.
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