Thursday, May 17, 2012

How online marketers optimize your customer conversion and campaign ROI?

Let’s start with a true story about me. About one year ago, I was so happy when I knew that I was accepted by the IMC program at Northwestern University. Needless to say, my father was so impressed after I told him about the admission. Then he asked the logical next question: How much am I going to pay for this program? At that point, I felt embarrassed because I actually did not know the exact tuition.

How could I decide to take the admission without knowing how much I am going to pay for it?  How did I know whether I could afford it or not? What is ROI?

I know that the story is kind of silly, however, I find that marketers-particularly the folks in online marketing-do this all the time. They do endless hours of SEO, paid search and social media work, continuously increasing their website traffic and driving people to their websites, but then they fail to find out how many of those website visitors actually convert to customers. High site traffic is not your ultimate goal. Specifically, you should think of your business website as a funnel like the one in the image below.
Website visitors
Website visitors are at the top of the funnel, which is another indicator of website traffic. These are the people you have attracted to your site via media channel like your blog, social media and search engine optimization.

Leads are the website visitors who show interest in your product by summiting information on a landing page. Therefore, you have more information about them than you have about your website visitors. These people are your potential customers.

These are the people who purchase your products, thus tracking them should be your priority.

Customer conversion optimization

Step 1: Measure Conversion Rates
Conversion rate is the percentage of website visitors that converts to leads and the percentage of leads that converts to customers. It is important to know your conversion rate because you need to understand where in the funnel you can improve. One statistic that would always be on marketers’ mind is the conversion rates of their landing pages. If you're not measuring how effective your offers, calls to action and landing pages are at converting your website visitors into leads, then you're not giving yourself a knowledgeable way of improving.
Step2: Increase Conversion Rates
Attracting web visitors to the website is the first step, getting them to convert into a lead or business is the next.  Offering compelling content and clear calls-to-action will help to convert more of this traffic into leads and customers for the business. A/B testing with Landing pages and calls-to-action allow you to test which are converting at a higher average.  Determine which keywords are giving you the best top, middle, and bottom of the funnel leads.
Step3: Optimize customer segmentation 
To smart marketers, customer conversion is only the start of their optimization work.  Optimize customer segmentation is the next critical step. Since not all the customers are worth us to keep, we could go further, optimize converted customers by using web analytics tools to find out the right type of customer, those who buy more frequently, or make big purchases. 

Optimize Campaign ROI: Combine Campaign metrics with customer segments 
Depending on your campaign tracking tools and conversion page, you can optimize customer segmentation and have customer profiles of each customer segment. It is important to combine your campaign metrics with key customer attributes. These attributes may include customer ID number, existing or new customer, products ordered, geography or customer segment type. 
Step5: Optimize ROI Against Customer Value 
Once your have merged your campaign metrics and key customer attributes, the next step is to optimize ROI by optimizing your campaign keyword against customer value. By identifying the keywords, you will drive the best customers and maximize your campaign’s ROI.  
Sometimes, it is hard to match a keyword to a specific customer segment because it could deliver to multiple customer types. If in that case, you need to develop a model to calculate the value of a keyword by determining the percentage of conversions at each customer segment. 
In sum, for web marketers, if you have no knowledge about using web analytics to optimize customer conversion, segmentation and campaign ROI, you are in trouble!

Huan (Edison) Liu is a graduate student in the Northwestern Medill IMC integrated marketing program and is specializing in consulting with senior marketing professionals. Huan will be graduating in December 2012. Huan can be reached on twitter using the handle @EdisonLiuIMC.


  1. Having a high amount of traffic is only part of the process. To get quality leads, you should target your audience properly. One way to do that is to create highly informative content that visitors can use. This content is like a free trial — it gives your customers a sense of what they can get when they avail your service. Remember that your customers will only come back to you if you have what they need.

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  2. search engine optimization leads really do work. I was surprised to find out how well they actually work.

  3. This article clearly states so many good points which can be used to improve conversions. I have noted some of these to test them on my website. Thanks for sharing.
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