Most websites, even profitable ones, are dismal failures when it comes to maximizing their possible sales. With average conversion rates for online stores floating around below 2%, it's not hard to see why.
Luckily, Google has actually made their secret formula for success available to anyone who cares to pay attention. As you read this article, you will begin to understand what's driving their tremendous success, and how you can apply the same principles to your own business.
So what is Google doing, that you aren't doing? What makes their ugly website worth billions of dollars and yours worth, um, slightly less?
It's so simple that it should come with a warning label, because you will probably slap yourself when you get it.
To understand this, you need to know how Adwords works. An advertiser's position in Google's "sponsored results" depends, for the most part, on two simple factors:
- The advertiser's maximum bid amount (for example, $1.00)
- The average click-through rate on the advertiser's ad (for example, 5%)
If the advertiser increases their bid, or writes a better ad that improves the click-through rate, their ad moves up. If they do the opposite, they move down.
This system is simple, but the effect is profound. By doing this, Google optimizes the amount of paid advertising income from every search result page.
If we multiply $1 and 5%, we see that Google earns, on average, 5 cents every time that our hypothetical advertiser's ad appears on the search result page. If another advertiser's ad will earn Google more money, it moves up.
So, how can you use this simple idea to drive more profits? It's simple, so let me explain:
If you're online right now, go take a look at your own web site. Every link or form button that a visitor can click is like an ad, isn't it? They're all there, on the page, inviting visitors to click them. I call these links and buttons "action elements."
Every action element has the equivalent of a click-through rate, doesn't it? Some percentage of visitors will click it, right?
Every action element has the equivalent of a maximum bid, doesn't it? Some amount of revenue or profit that you will recieve, on average, if a visitor clicks that element?
Here's the kicker... if you haven't slapped yourself already get a good grip on your "slapping hand" right now.
If you could just measure these two things, for every action element on every page of your web site, you could use that information to optimize the profitability of your web site.
Well, here's some good news: you can absolutely measure this stuff, by installing a good analytics package like Clicktracks or Google Analytics that can track visitors, clicks, and revenue.
So, how do you use this information? Maybe an example would help...
Let's say you have an online store, like myweddingfavors.com. There are probably several categories of products available, and these are listed on the left hand side of the page, right?
For each of these category links (action elements), multiply the click-through rate by the average revenue (or profit if you can measure it) that you earn from a click-through. This will give you a number that represents how much money you made on average, every time that link was displayed. I call this number the revenue factor.
Now try putting those links in a different order, based on the revenue factor. The action element with the highest revenue factor goes at the top of the list. The one with the lowest revenue factor goes at the bottom.
Chances are very good that your sales will increase as a result... but if you stop there, you're still missing the point. Let it run for a while, measure the results, and repeat the process until you're no longer able to improve the order of the links.
But you don't have to stop there. That was just a very simple example, and there's a whole lot more profit waiting to be found.
Just as advertisers can improve their positions (and increase Google's profits) by increasing the click-through rate on their ads, you can drive more sales by increasing the number of clicks on your most profitable action elements.
[Via - StomperNet]Network Marketing Online
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