It started as a passing conversation while waiting for a kettle to boil. But I think we’ve discovered the digital marketing equivalent of the “chicken or the egg” quandary.
What should you do first, generate new website visitors or ensure your current visitors are converting?
After a bit of debate, we have come to a conclusion: Don’t generate traffic you can’t convert.
Now, the debate was a good’un. So let me run you through the highlights!
We started looking at a typical sales funnel, and plugged in some simple numbers to stop the debate turning into a calculator battle.
Like we did, you can see there are three options a marketer can take to improve the all-important sales figure.
Increase the audience size
The first option we discussed was increasing the size of the audience at the top of the funnel.
Increasing the size of the market by 50% and keeping the performance metrics the same increases sales from 5 to 8.
In practical terms, increasing your audience size by 50% is no small task. Growing a market often means diversifying, or entering new territories, or unlocking new audiences with heavy advertising. As you’ll know, all of those things will need considerable investment.
Let’s assume the advertising, product development and content localisation costs added up to £300k. The return on investment isn’t brilliant. Each new sale will cost you £100k.
Increasing Engagement Rate
The next option available to a marketer is increasing engagement from the current audience. Here, you can see, the engagement rate (measured in this instance by Click-Thru Rate) has increased from 5% to 8%.
In practical terms, increasing CTR from 5% to 8% would normally mean investing in a very clever SEO campaign designed to be more visible to a specific audience segment.
And let’s assume the SEO campaign costs you £90k. The ROI is getting better, with each new sale costing you £30k.
Increasing Conversion Rate
The third option is to improve the effectiveness of your website, so that it converts more of your current visitors into sales. Or what’s commonly referred to as Conversion Rate Optimisation (‘CRO’, to save me typing)
By improving the rate at which visits convert to sales by a factor of 2 (which, in our experience, is more than realistic), you can see sales have increased from 5 to 10.
In practical terms, delivering an improved conversion rate means tweaking existing designs, like forms and product pages, to remove blockers and bottlenecks.
Now, let’s assume you invest £50k in a pretty comprehensive CRO plan, the ROI is much better. Each new sale costs you £10k.
Putting the Theory into Real Numbers
Even though it’s plain to see that CRO delivers an amazing ROI compared to attempting to double an audience’s size, you might be thinking, “£10k for a new sale” sounds a lot.
Those numbers were just examples to make the maths easy. Here’s what the before vs after looks like when we apply an anonymous client’s numbers (which I’ve rounded up to the nearest sensible number).
Using these real-life numbers, assuming you invest £50k in a program of CRO, each new sale only costs £25.
Now, while I won’t share our client’s revenue figures, I am happy to share that for every £1 invested in CRO, the client generates £3 in return.
Convert Your Existing Visitors First
The short version of the above, would have been a straight-forward, rhetorical question:
“Would you pay to bring people to your shop, if they don’t buy anything?”
Had we started with that, our debate would have been quicker but a lot less engaging.
So to summarise, we believe that your best-bet is to focus first on:
- Creating compelling on-site content
- Removing all barriers to users converting
- Wowing your visitors with an experience they want to tell their peers about
And once you’ve created a well-oiled marketing machine that converts users to sales, you can turn your attention to generating as many new visitors as possible.
The Savvy Marketer May Have Noticed…
Of course, none of the options above are mutually exclusive. What you really want to achieve is this:
But that’s when we start talking about integrated marketing.