Let’s drill down into the nitty-gritty of web traffic and look at why people need to invest in tactics for keeping customers/prospects engaged online. We all tend to focus on the attraction part (which is fundamental too, don’t get me wrong) but what really matters is whether online visitors actually ‘convert’ and do what we want them to do on the site.

Here is a story about Penelope Product-Marketer:

The perils of Penelope Product-Marketer

Penelope Product-Marketer works in retail. Her company sells boutique clothing through a chain of stores around Australia and has recently decided to move online. Penelope is driving a shift to online very hard because she believes it will give her company broader market reach and it will help her own career development.

Penelope’s company’s new website is very chic! A flash homepage (technically and creatively) captures the spirit of the company and is very appealing to the customer base. It’s just a pity that the flash takes a little while to load on some machines, but we’re sure the propeller heads will iron that out later on. After all, it loads really quickly on Penelope’s machine and is perfect for her to show the boss.

So, now to the main task – how to attract new visitors to the website?

From looking at the myriad of world’s best practice whitepapers from the US and Europe, it sounds pretty easy; buy an email list and blast some prospects, put some banner ads on relevant sites to drive traffic through, and buy some key search terms. Then you can sit back and count the orders flowing in. So Penelope did just that – banner ads, an email campaign, plus a little bit of search.

Banner ads might typically see click through rates around 1%; open rates on emails may go as high as 5% depending on the audience and the relevance of the subject line; click-through rates on search campaigns vary wildly but let’s say around 4-5% in this instance. Using data like this, it’s possible to work out how many of these ads, emails and searches are needed to achieve the volume of traffic required by the web site.

So Penelope began to watch people flocking to her website and could quickly see that there were three main trends of behaviour:

  1. Some (a small number) found their way through the site and actually made a purchase
  2. Some looked at the homepage and couldn’t be bothered to wait for the site to load, and
  3. Some watched the very chic front page, smiled to themselves, and then clicked away.

Penelope decided to do the sums on her campaigns and came up with some interesting numbers:

  • Overall campaign market reach: 10,000 (around 0.5% of the total market opportunity), that is, the sum of emails, banner ads and search views was 10,000
  • Average click/open rate: 2.5%. Of the 10,000 marketing impressions, 250 people came through to the website
  • Website conversion rate: 4%. In other words, 10 people bought a product
  • At an average selling price of $125, Penelope made $1,250 in incremental sales
  • Of the 10 who bought, eventually three of them became returning, long-term customers
  • 240 people came to the website and decided not to buy something, and
  • Those 240 people each told five people that Penelope’s website did not have anything that interested them.

As well as working in the boutique clothing store, Penelope is completing a postgrad marketing course. She decided to write up a case study to share what she learnt with the rest of her class. Here is a summary of what she wrote:

A: World’s best practice makes sense but remember that the market in Australia is a lot smaller than in the US, so if you choose a model which needs lots of input (reach) with low conversion rates to be successful, you may run out of available market opportunity.

B: Make sure you measure the right thing – measuring click-through rates and traffic on the homepage is interesting, but it is the conversions that drive the revenue. Set conversion goals and measure these rather than acquisition goals.

C: Driving people to the homepage is not good enough to give good conversion rates.  In fact, the reverse is true. More people will see your home page and leave than those who carry forward and convert. Take the time to do a proper campaign splash page.

D: Always test your website from the customer’s point of view. Most in-house machines will give you the wrong impression of page loading times which means you don’t really understand the customer experience.

E: Always know what customers are doing on your website – track how they interact with the site. It is generally much more cost effective to improve the conversion rate on the site rather than attracting more visitors.

Penelope sums it up like this:

“When you market online, getting eyeballs to the site is pretty straight forward. The trick is to get them to stay there, engage with your company and keep them coming back. The worst thing you can do is attract them to your site and then fail to connect with them. If they leave without some result or positive outcome, they won’t return and they’ll tell their friends not to bother as well.”