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Newsflash: Increasing traffic isn’t the only way to increase ROI

One of the funniest recurring conversations I have with marketers goes as follows:

Marketer: “Hey Hugo, I want to increase my revenue by x percent this year (or leads or whatever pertinent KPI). Now that you’ve taken a look at my site and my analytics data can you help me decide how to spend my marketing dollars to drive more traffic to the site.

Hugo: “Well actually, after taking a closer look at your site, your number one goal should be to increase your conversion rate, because even a small incremental lift will drive a significant increase in revenue (or whichever pertinent KPI). Moreover, optimizing your site for conversion can often be less expensive, relatively speaking, then the dollars you would throw at paid advertising and other forms of traffic generating activity. Lastly, if you make conversion optimization a cornerstone of your ongoing marketing efforts, the incremental traffic you will eventually drive to the site (via ads, SEO, social, email, etc.) will convert at a higher rate, making those marketing dollars more valuable  from an ROI perspective.”

Marketer: “Thanks Hugo! That sounds really great, but let’s get back to deciding how to drive more traffic to the site.

Hugo (in his mind): “Do’h!”

What’s really fascinating is that this conversation has occurred both with Fortune 500 marketing decision-makers as well mom & pop small business owners. For some reason, conversion optimization and testing (A/B & multivariate) often gets the short end of the stick.

One of the ways that I’ve learned to combat this is by using simple arithmetic. So for example, if I can explain how a $50,000 investment in testing & conversion optimization can drive a 1% lift in conversion rates and then calculate what that 1% lift equals in terms of incremental revenue, I can quickly show how that $50,000 investment in testing & optimization drives more direct ROI than an equal $50,000 investment in something like display media budgeting. Granted, this requires a leap of faith (e.g. believing that conversion optimization & testing can actually drive a measurable lift in conversion) but you get the idea.

In the end, what I find is that a company must truly embrace the idea of conversion optimization, testing, and measurement. It must become a part of the marketing and business culture.

If you’re a marketing decision maker and you’re reading this, ask yourself if your organization has built that culture. If not, figure how to make it happen, because it could ultimately be the difference between a good marketing career and a truly outstanding one.

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