Increasing Your ROI Return on Investment

08/22/2003
by Gerard Manning
http://searchengineposition.com/

An important aspect of search engine marketing that should not be forgotten to include is your ROI or Return on Investment into your marketing plan. In addition to achieving top rankings for your website, you should always look to ways to further increase your conversion rate. A few things to keep in mind are, if people click on your link to your website, are they going to find the information that they are looking for, and will your site be trustworthy enough for them to purchase a product or service with their hard earned money?

To increase your ROI, you need to look at a few possible areas that you need to improve your website or marketing plans. First, as mentioned above, do the people that find your website take that next step to enquire about your product or service? There could be many factors that need to be addressed. Maybe some content revision is needed, or a new possible web design or touchup is needed. Investing money to instill confidence in your potential customers will pay off in the long run.

Another major hurdle affecting the big websites of today is their content management systems. Choosing the wrong CMS can leave your website invisible to the majority of the search engines. There are search engine friendly content management systems that allow for unique title, meta and description tags for your website, and the url string is not dynamic and no user ID, so the search engine spiders will not get trapped in an endless loop re-indexing the same page with different url strings.

The next step is your Return on Investment Calculation. In this article we will help you determine what a conversion for your site could be. Conversions are the “action” events you want a visitor to initiate. It could be filling out a form, buying an item, e-mailing you for more information, or just capturing their name and e-mail for further contact from your sales team. Once these events are defined, you can then calculate conversion rates from your site.

In order to calculate ROI, you’ll also have to determine what your closing rate is from web generated leads, and the average sale originating from an online lead. This is a little trickier for some than others. If you’re an online retail site, your sales reports should provide you with all the numbers you need. But if the purpose of your site is just to capture leads so you can begin building a relationship, it will be much more difficult to determine these numbers.

Let’s look at one case. An online bank has decided that they want to attract potential new customers through their website. They’ve defined 3 conversion triggers:

1. Visitors entering their email and preliminary contact information in order to download a PDF document outlining the advantages of online banking and information about mortgages and consumer loans.

2. Visitors requesting a credit needs analysis from a bank representative.

3. Visitors joining an email newsletter subscription list.

Obviously, these visitors aren’t buying anything online, so there’s no easy way to determine the average revenue generated per closed lead. The bank would have to look back at past numbers and try to determine what the average value of what a new customer is worth to them. Then, they’ll have to determine average closing rates for each of the three types of conversions. In the beginning, these rates may be an educated guess, which can be refined once the program is underway and tracking is in place.

Once the numbers are in place, conversion and ROI analysis can take place on the website traffic coming to the banks website.

For most website owners, these calculations will be a new exercise. If you’ve working with an online marketing consultant or search engine marketing firm, ask if they have experience in helping you pull together these numbers. If they’ve never helped a client with ROI analysis, ask why not. This is a potential red flag indicating your marketing consultants may not be measuring success the same way you do.

As mentioned above, there are many other factors that need to be taken into consideration in addition to those top rankings. Having top rankings and a website that no one feels comfortable buying from is not going to do your business any good. Always keep in mind what needs to be changed to encourage people to take that next step with your site regarding enquiring about a product or service. And finally, you need to set your goals as to what your desired conversions are for your website.

For an in depth look in Calculating your Return on Investment Formula, please follow the link for Search Engine Positions Netprofit on Calculating Your Maximum Cost Per Visitor.