conversion issues

predictions

[brookbend]

I have calculated expected visitor traffic for my customer's website. Now I must do same for his expected conversion rate. For my own website I consider number of transactions and visitor volume to derive browse-to-buy ratios. Although my transactions average $1200, to apply my known rates to his is absurd - his avg sale is $25,000! Most people use historical metrics to make projections except for one problem - he doesn't have a website. I'm trying to model his economics to justify going online with his custom kitchen design/build business. My website, luxury patio furniture, yields .001% transactions on 225,000 annual visits. If I apply these numbers to his business it makes him look like a millionaire in 6 months. I assume a moderate correlation between conversion rates and size of purchase... because I dont think my ads will control the income of his prospects that well - an understatement.

I could check prices for his competitor's paid ads, then make worst case assumptions and see if his sales would be good enough. His advertising will be on google/yahoo/msn, etc. for seo and paid.

Anyone have any ideas? I doubt there's kitchen industry data on conversions - kind of private data, ya?

[BradleyT]

His website is going to convert at 2.34%.

[brookbend]

sure it's not 2.1% ?

[BradleyT]

Well I think you get my point. There are dozens of factors that are going to influence his conversion rate so nobody can give an accurate answer.

And just because the industry average is X doesn't mean he's going to perform at X.

[brookbend]

I got your point. That's all true, however, I have to give a report that says something. I know the market position online, of his proposed new website - that's a huge factor...talking about factors. If I knew industry avg I'd take the lower end numbers to be safe. Getting really wild, but maybe doable - if he's tracking his hard copy magazine ads then I may have something to start with.. again, you can always use worse case. The numbers just have to add up.

Problem is in his industry numbers are private.

Thanx

[BradleyT]

It will be interesting to see if your traffic estimates are close.

When I worked for a web development company we would never in a million years give clients any kind of numbers like estimated traffic or conversion rates. All you're doing is setting yourself up for a big fat lawsuit when the site doesn't perform as well as the numbers you gave to him in writing.

[brookbend]

True again, unless your numbers are stated as theoretical. Another way is start with sales needed to make the program worth while, then work backward and look an conv rates. Everyone has a website or several, that we can compare. As I think about it, we could use his current site - lousy, just as a landing spot to test some paid ads with say 5 ads per keyword. Estimating reasonable gross visitors cuts the variables.

[cgrantski]

The conversion rate will probably be about the same as for a decent-size Yellow Pages ad. If 100,000 people a year look up that topic in the Yellow Pages, and are exposed to his ad, how many actually call him? and of those cold calls, how many does he manage to convert (over the phone and with a face-to-face, presumably) to a sale? If you can get any wild estimates of those percentages, I think they will correspond to those of a nicely done web site. I don't see much difference, really, between the effectiveness of a good phone book print ad and a good little web site, for the business that he's in. It's going to be a tiny, tiny percentage in the end.

Why are you modeling this? To get him to buy a web site? You sound really savvy and reasonable so I'm guessing you'll end up with something appropriate.

If I were him, I would hire you to do a very, very nice but inexpensive 3-page site, run it for a few months, check the number of calls or leads (get a special phone number just for display on the web page), then re-evaluate after a while. And take the savings from doing just a small web site and spend it on testing and tweaking the landing page or the call-to-action page.

In his business, this is not a case of "fancier and more expensive gives a bigger return." I'd bet anything on the truth of that statement. If he's infatuated with Internet magicalness, trying to justify bells and whistles, he needs to think hard about it.

If he spends $$ on a web site, whatever that amount would be, how many actual sales would it take to pay for the expense? What payback period does he use for his other marketing investments? Suppose he gets only one actual job out of it in 3 months? Would that be a good enough ROI?

[brookbend]

cgrantski all good ideas. Yellow pages comparison interesting. I have to model because of my self interests - this is a contract-to-hire oppt'y for me. Having said that, I still need to be responsible. It's not that he needs all the bells and whistles.. he needs the RIGHT website, given all the conditions. It happens to be all the bells and whistles are needed, together with every conceivable way to get visitors to identify themselves. We will need immediate feedback and extraordinary analytics. I can see what his prospects are going thru as they wade through the listings and they're not getting what they want. That's the opportunity. Although it is scary and intimidating at first when so many sites are competing, there are always ways to create a new brand on the street. You just have to find the holes.

This analysis is an interesting proving ground for me... it's someone elses business, not mine, for the first time. I have found a couple huge points he can compete on, and realize his seo competitors are manifold, but his paid competitors materialize on google page 4, and do not attempt to compete with the Home Depot's on page 1 - who has the merchandising and brand leverage to spend more on ads.

The important note here is, you can give estimates in writing but tell the customer it's theoretical. this shouldn't bother him as long as you detail out, 1 level at a time, how the model was made. He will conclude the same as you. You also need 3 possible outcomes - a range. Also, you need to show how you will modify your actions as you progress in the program. Show him the flexibilities.

[cgrantski]

You're making a lot of sense. Share your uncertainties with him and he'll be on your team all the way, and will recommend you to others as a straight shooter. Clients who appreciate that are the only kind of people you want as clients. (my opinion, of course)