Why Traffic and Revenue is Not a 1:1 Correlation

I have heard business owners say that “if I could only get traffic to my website, I would see an increase in sales.” Marketing companies all across the United States try to sell businesses on the idea that “the more traffic you get, the more customers you will get, its simple math.” Although they are correct – math does have a great deal to do with the overall growth – they fail to mention a few key items. A website that doesn’t convert well with 1,000 visitors, will not magically convert well with 100,000 visitors. There will be an uptick in overall lead/conversion volume from the sheer numbers, but is this really an effective way to grow the bottom line?  Absolutely not, that is a great way to throw money into the marketing abyss!

Let’s step out of your comfort zone for a minute to paint a picture regarding growth.

A young man is looking to buy his first fixer-upper home. He’s watched lots of home renovation shows and thinks it is perfect for his financial situation. In order to save time and money, he has been networking with multiple contractors that can help him in this process. After a week or two, he finds the perfect home. Slightly dilapidated, it has strong potential to be expanded into a two story home.

He purchases the house for next to nothing and starts work. After updating and remodeling the first floor, he starts the plan to expand to the second story. Contractors come in and in less than one month, he has a new, two story home for a fraction of the price. After just 1 year, he notices stress cracks all across the house and his floor is showing signs of warping.

After calling a professional, he comes to find that the foundation was never built for a two story structure and is starting to crumble under the added growth. Now, he has to pay over half the purchase price of the home to have the foundation reinforced while redoing the floors and drywall that was recently completed.

WHERE DID THINGS GO WRONG?

The answer seems pretty obvious right? You should always check the foundation of a home before purchasing it right? He did and the foundation was perfect for the home he purchased, but not his vision of what his home would become. He didn’t ask the right questions or involve experts in his expansion plan from the beginning.

WHAT DOES IT MATTER?

While you may not be looking to buy a home — this situation is very applicable to your company’s website. Reflect for a minute here.– Do you know your conversion rate? How do you stack up among your competition? If you haven’t asked yourself these questions, now is the time to start. Your website is the cornerstone of your business. Your website’s conversion rate is your foundation, with traffic being the second story, or the growth aspect. Garnering additional traffic is vastly important, however it MUST be done with a solid foundation with your website converting at its peak. Otherwise you are driving traffic to a website for vanity-based reasons, not for performance based reasons.

So back to the math. Obviously, increasing traffic will affect your bottom line. But how much will that increase limit your company’s potential without a strong foundation? Below you will find some simple math walking you through scenarios for growing a website’s performance.

CURRENT WEBSITE PERFORMANCE

  • 1,500 visits
  • 2% conversion rate
  • 30 conversions ($3,000)

INCREASED TRAFFIC PERFORMANCE

  • 1,900 visits
  • 2% conversion rate
  • 38 conversions ($3,800)

As you can see by only increasing traffic to the website, we were able to gain an additional 8 conversions. If the average price of a conversion earns you $100, you earned over $800 by sending additional visitors to the website.

INCREASED CONVERSION PERFORMANCE

Focusing on the original traffic, let’s increase the conversion rate of the website.

  • 1,500 visits
  • 3.5% conversion rate
  • 53 conversions ($5,300)

Without sending one additional visitor to the website, we see an increase of $2,300 in revenue.

INCREASED TRAFFIC AND CONVERSION PERFORMANCE

Now let’s combine a strategic marketing campaign to drive traffic while maintaining the conversion rate at the now increased levels.

  • 1,900 visits
  • 3.5% conversion rate
  • 67 conversions ($6,700)

That garnered an additional  increase of $1,400 in revenue.

With consistent testing and a comprehensive organic and paid traffic strategy, we would expect both traffic and the conversion rate to continue to increase over the next few years. But for now, which would you choose $800 or $3,700?

Website optimizations are key to a business’s success. But how do you improve your “foundation” without breaking the bank?” Give us a call to learn more about our optimization marketing opportunities. Do not let a crumbling foundation be the difference between shutting down your business and expanding to a second story.