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When SEO is all about the bottom line

Written by David Harry   
Monday, 02 June 2008 09:15

SEO Jeweller gives some pearls of wisdom

Guest post from Steve Gerencser

Bad BenchmarksWhen the web was young, back in the dark ages of dial-up and Mosaic, the big stat was "hits". Everyone had a counter on their home page, and everyone sold, or tried to sell, advertising based on the number of hits on their site. It was soon discovered that hits are a worthless metric. A hit is simply a request made of the server, so a page with 100 images on it generated at least 101 hits every time it was loaded. And the counters on most home pages could easily be padded by hitting the page refresh over and over.

Fortunately advertisers and webmasters learned quickly that when counting traffic there are only two numbers that matter, visitors and unique visitors. Both types are valuable for different reasons, and a website that can grow to a place where people want to return over and over again is less tied to the whims of the search engines.

To that list, we can add RSS news feed subscribers, newsletter subscribers, even the number of comments a simple blog post may get.

The problem with these benchmarks/metrics though is that none of them mean much when it comes time to pay the bills. You can have all the traffic, all the subscribers, even all the hard core fans you want, but if they don't convert in to sales, what's the point?

 It can be sales, subscribers, downloads, whatever it is you are trying to do, but all other numbers are irrelevant when compared to conversions. 

It's all about targeted, qualified traffic

I manage an eCommerce site and we have to manage our traffic very carefully. Our product, custom jewelry, is handcrafted as it is ordered and we can only do so much work in a week. So driving millions of customers to the website is actually a bad thing for us. We know, after more than 2 years of tracking conversion rates, that we convert roughly 1/2% (yes that is just .5%) of our traffic in to a sale. At our current traffic levels we are selling roughly 50 sales per month. For those of you that deal in virtual goods, this is nothing, for those of us actually making what we sell, it keeps 5 people incredibly busy every day. We know that we are maxed out.

This leads me to our other metrics; Cost/visit and earnings/visit.

A lot of people don't count their labor as a part of the cost of driving traffic to the website. We do. Adwords, website related costs such as hosting, software development, database licenses, and labor spent working "on" the website are all accounted for. We also know that right now it costs us roughly 8 cents to get a visitor to the website. On the earnings side of the equation we take all website related sales and simply divide by the number of visitors that month. We've learned that on a good month we make as much as $1.46 per visitor.

We are obviously making money on our website. And now we know exactly how much. So what is a company like ours to do? Simple, expand. We started adding on to the building 2 weeks ago and expect to be finished in about 3 months. From there we can add to our workforce, train them to our level of quality, and then allow our website to grow again. We know what it costs, we know what it earns, and with a several year history to look back at, feel quite confident that this is the right thing to do at this time.

But we wouldn't know any of this is we were just tracking hits.

 

Steve-ODave here; Steve has been an enthusiast of SEO for many years and is one of my closest mates whom I have been chatting with since we met on a few of the SEO forums years ago. He works in the jewellery industry and can be found on Twitter as well as Sphinn.

Thanks for taking a ride along the trail Steve… it’s nice to see you out (beyond the forums) passing along your many years of knowledge – looking forward to you getting that SEO blog going this year …


 

Comments  

 
0 # Michiel Van Kets 2008-06-13 01:32
hehe, almost forgot about those hits, while it's not that long ago ...

things surely move fast in SEO-land ...

How long will it take for google to put your visitors and their behavior in the algo's? I do wonder ... it will be next big shift.

cheers,

Michiel
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