I'm fed up.
Maybe I'm just getting old and crochety, but I've had it up to here with people not understanding the value in web marketing. After 20 years of educating clients, followers and readers alike, you would think that people would begin to realize that web marketing is no more about search engine rankings than advertising is about getting featured on Oprah. Sure, it's a nice bonus (and boost!) to the business, but that's just a reward for a job well done, not the end-goal.
But instead of talking about all the reasons why there is no such thing as a #1 ranking anymore (personalization, location, device differences, etc.), let's talk about some other metrics that are far superior and more worthy of investing the time to measure or care about.
General Web Site Metrics
Visits/Visitors: If you sell a product or service, tracking visits and visitors to your site has very little overall value, except in conjunction with some of the other metrics we'll discuss below. Traffic can easily be manipulated, and many web marketers engage in practices that are designed to drive up visitor hits to the site without any consideration as to whether those visitors are the site's target audience.
While engaging in social media campaigns is known to drive larger amounts of un-converting traffic, there is still value in targeting audiences that have a similar interest in your industry or those that hold the possibility of converting into customers at some point in the future. It's not irregular for my company to get new clients out of people who have been following my blog posts and seeing me speak for years.
When you're focused on bringing in potential customers, the number of visitors you get from month to month can matter, just so long as you have realistic expectations as to how many of those visitors will eventually turn into customers.
Conversions: A "conversion" can be almost anything: a lead, transaction, download, phone call, form fill, etc. In fact, most businesses will have multiple micro and macro conversion points, all worth tracking. You need to figure out which conversions to track and then make sure you are giving an appropriate value to each.
For example, someone purchasing a product is a far more valuable "conversion" than someone downloading an ebook. Unless of course that product purchase is for a $5 item and the ebook download increases conversion rates for your $1,000 items.
Of course, you need to be tracking and reading your data in order to help you better determine what's worth tracking and the value that each brings. But start with the obvious and make sure you're capturing your conversion data so you can also learn how to improve your site to get more.
Revenue: Revenue is an even more important metric than simple conversions and conversion rates because it lets you know where your money is coming from. Getting 1,000 conversions seems better than only getting 100, until you realize that 1,000 sales on a $5 item gives you less revenue than 100 sales on a $100 dollar item.
Revenue also matters a great deal when you compare that up against your advertising and marketing costs. Sometimes you're better off with smaller revenue if it leads to higher profit margins. It takes money to make money, but at some point you get more money by spending less. Measuring your revenue, against other metrics, allows you to truly see your profitability zone.
Conversion Optimization Metrics
Conversion Rate: Tracking conversions is about the number of conversions you are currently getting (as compared to previous months, years, etc.) The conversion rate, however, tells an entirely different story. Conversions just gives you the overall number, but looking at the conversion rate tells you how good of a job you are doing at converting your existing traffic.
If your conversion rate stays steady, the only way you can increase actual conversions is by bringing in more traffic from new sources. Nothing wrong with that, but the amount of traffic you can bring in is directly tied to your ongoing marketing and promotion efforts (read: money spent).
However, when you improve your conversion rate, you can increase the number of conversions you get without having to go out and draw in any additional traffic than what you're already getting. Quite often, a small lift in conversion rate can lead to a significant lift in new revenue. And once you have your conversion rate maximized, any increases in new traffic will produce an exponential increase in revenues.
Social Media Metrics
Subscribers: Subscribers are those that have shown more of a concrete interest in you or your company. These are people who have essentially given you permission to send them updates on your products, services or content that is being published.
Subscribers are more active than followers and are more likely to engage with you. Where followers are a more passive connection, subscribers are a bit more active.
Engagement Rate: Measuring engagement rate tells you how many of your followers and subscribers are actually "dialoguing" with our company. It also tells you how well you're doing at reaching your intended audience.
When you have a low engagement rate, you're either not hitting your target audience or you're just not doing a great job at producing the type of content that your followers and subscribers can react to. That might not mean it's bad content, but it's just not quite bringing them into the "community."
Increasing your online engagement is often an important avenue to turning your existing followers into active customers, and gaining new followers and subscribers at the same time.
Loyalty and Recency: One of the most important aspects of social media is brand building. It's not just about building a recognizable name, but building a name that creates fans. Getting your social followers to come back to you time and time again shows that you're not a one-hit-wonder.
It may be a bit far-fetched to keep a customer for life, but your social media marketing can help you increase the lifetime value of each customer that you have. Tracking loyalty and recency lets you see how often your social media drives these customers back to you and at what intervals.
The higher your return and recency rates, the more loyal audience you have. That means you have to spend less time gaining new customers and more time keeping existing customers happy, which uses a lot fewer of your marketing dollars.
Return on Ad Spend (ROAS): For every $1 you spend on advertising, how much new money is brought into the business? Return on ad spend is your basic calculation to determine whether your ad campaign is profitable or isn't.
If you're earning $1 for every $1 spent you are at a break even level. Of course, this doesn't account for labor, operating expenses, etc. So truly, a 1:1 (or 100%) return on ad spend is costing you money. On the other hand, anything over 100% is pushing you into profitable territory.
The great thing about measuring ROAS with your PPC campaigns is that once you are in the profitable zone, there is almost no limit to the amount you can raise your ad spend to. If you are profiting $1 for every dollar spent, the more you spend, the more profits you bring in.
Eventually you may hit a tipping point on this, which is when you have to decide if you want more business or more profits. And before you say, "more profits," remember that a $100% profit on $100 is significantly less favorable than a 25% profit on $100,000. There will come a day where you will have to decide between profit margins and revenues.
Cost Per Conversion: What is the cost of that lead or sale? In most cases, every product (or lead) has a different value, so the amount of money you're willing to invest in getting that conversion will vary greatly as well.
This is where cost per conversion comes in, and rarely is this a global site metric, but rather a product by product metric. Higher ticket items can succeed with a higher cost per conversion. Lower ticket items, not so much.
But as with ROAS, once you now your profitability point, you can invest unlimited amounts of money, knowing that every conversion will be adding rather than taking away revenue.
Using Rankings as a Metric
Rankings are still an important part of web marketing, but that is not how web marketing efforts should be based. Top rankings only affect the traffic to the site, and as a metric, that is probably the least valuable one there is. Rankings do provide greater opportunity for more traffic, but is that traffic valuable or is it wasted?
You'll know the answer to that only when you start digging in and analyzing the other metrics that, ultimately, prove to be far more in line with your goals of growing your business and earning profits.
What are your favorite metrics to measure? Please let us know in the comments.