Good Digital Marketing = Good Math

Ask good e-commerce or search marketing professionals how they build successful programs and you’ll hear them discuss things like conversion rates. Conversion rates are the percentage of a total audience that takes an action. I’ll take that a step further toward clarity and say that “conversion rate” is reserved for a monetary transaction. For other activities you try to motivate and measure (filling out forms, social sharing, answering questions and etc.), I prefer to use the term “action rate.” 

So, if you have 1,000 visitors to a web page and 200 of them fill out a form, then 20 of them actually purchase the product in question, you have a 20 percent action rate (200 of the 1,000 filled out the form … they took the action) and a two percent conversion rate (20 of the 1,000 actually “converted” to a customer.)

Search engine optimization and e-commerce experts live in this math. They know how many visitors to a given site or page it takes to produce one action. They then know how many of those actions they need to produce one conversion. They focus their energies then on two areas:

  • Drive the requisite numbers to the page to result in the projected conversions for their business’s success
  • Optimize the site or page so it takes fewer visitors and/or actions to achieve the same outcome

The more efficient the action and conversion rates on the back side of the site or page, the less work there is on the front side to get people there. So, in essence, this math is a microcosm of an effective business: Reduce costs and maximize revenue.

Your challenge this week is to determine what your action rate and conversion rate for your website, landing page or even social sites are. Then you can start reducing costs and maximizing revenue to optimize what you’re doing.