Often times I find that my clients don't have a great understanding of their numbers. I try to council him or her into knowing the cost of each lead and sale from their web results. Therefore they can know the true value of our work, and quite frankly, hold us accountable.
Unfortunately, my industry tries to point clients to pay attention to metrics that are one small piece of a larger puzzle. SEO companies will teach web businesses to pay attention to Key Word positions on the web. What is your position for the term "your key word here"?
So we have a web full of people always pulling up their key word to see where they rank.
Who cares?! It is one word for goodness sake.
Look traffic comes from keywords. Many keywords. And each key word can send 1 or 100's of people into your site if you are ranked well for the term.
So when we start on a project we want to determine your keywords, that represents your marketplace, that carry the highest potential for traffic.
I call each one of these high volume terms a traffic stream.
A traffic stream is a finite number of inquiries typed into a search engine. Your take of a traffic stream depends on your position for the stream. It is at this point that you may say I am contradicting myself.
The reason I don't put much emphasis on weather one term is ranked number one or not is that the algos for the engines ebb and flow each month. When one term falls, the other rises. Thus we wish to represent many keyword terms as we realize it unlikely to dominate on every single term. So we are hedging our bets to benefit you based on the odds.
I would rather you pay attention to much more important metrics. Such as how many leads you are receiving. This is why I always council my clients on the 5 steps to a successful website. Only one of those steps is traffic. And within that step are several microsteps to succeed at creating traffic. But it is only part of a five step process.
First lets understand some terminology.
Hits
This is a poor method of measuring web site traffic. A hit is registered each time a browser request is made from a web server. If you have a web page containing four graphics, each page display will count as five hits.
Page View
This is a more effective way to measure web traffic. A Page View refers to each time a page is displayed. So, if you have a web page with six graphics, each time the page is displayed counts as one page view but seven hits.
Unique Visitors
The number of individuals who visit your site in a defined time. If 400 people visit your site this week, that is 400 unique visitors. If one person visits your site 400 times, that is one unique visitor.
Cost per Sale (CPS)
This is the cost of obtaining a new customer. You divide your total acquisition expenses by your total number of new customers. For example, if you have $700 per month spend that produces 10 new customers in that month, your CPS is $70.
CTR (Click Through Ratio)
This will show up on the Pay Per Click engines. The number of people who click through a link or banner compared to the number of people who view it. If 4 site visitors out of 100 click through a link, you have a CTR of 4/100=.04 (or 4%).
Conversion Rate
The percentage of visitors to your site who perform your Most Wanted Response -- subscribe or register to get your MLS listings. If 10 out of 100 unique visitors sign up, your conversion rate is 10/100 or 10%.
CPC (Cost Per Click)
This is the cost of attracting a visitor to your web site. You calculate it using the following formula: CPC=CPM/(CTR x 1000)
If you paid $45 CPM for a banner ad with a CTR of 1%, your CPC would be $45 / (.01*1000) or $45/10 = $4.50). Each site visitor is costing you $4.50.
CPA (Cost Per Action)
This is an online advertising model in which the advertiser's payment is based on the number of people who perform the Most Wanted Response (i.e. subscribe, register, purchase, etc.)
PPL (Pay Per Lead)
In this advertising model, payment is based on qualifying leads supplied. For example, a publisher might pay you a set amount for each visitor you send who subsequently provides contact information or subscribes to an ezine.
PPS (Pay Per Sale)
This is an advertising model in which you pay a commission for each qualified sale that results from activities.
I hope you can look at these metrics and know how to take your cost of sale and your cost of lead. Your cost of sale is going to be determined by how good you are at closing your leads. How many leads des it take to get a sale?
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