More Traffic=More Sales?

Most website owners become preoccupied with getting more website traffic. But is simply getting more traffic the answer?

The more traffic equals more sales formula may be very simple and beguiling but unfortunately not strictly true.

If it were true then we could just go out and buy traffic and sell more.

Like the perpetual motion machine- nice idea!

Most new website owners are locked into that simple formula and desperately go about trying to increase their traffic. Some even resort to those ads " 10000 hits guaranteed" .

It's very easy to be tempted when you only have one or two visitors /day and zero sales.

Learning from PPC

Even though I have always been a believer in targeted traffic and not just any traffic it was only when I started with PPC (Google Adwords) that I got to realise how targeted you had to be.

Now with PPC you pay for each click and so you must make each click count.

Lets do some simple sums:

If you get 1000 clicks at 10 cents/click you pay $100 dollars Now you have 10 sales giving a conversion rate (CR) of 1%. If each sale generates $10 for you then you have the following

cost of sales = $100
amount of sales= $100
profit = $0

So how do you turn a profit - easy you increase the conversion rate. If you double the traffic (2000 clicks) with the same conversion rate you would still get a $0 profit.

But if you double the conversion rate to 2% you get a $100 profit.

What we arrive at next is an acknowledgement that the conversion rate is important, so what can you expect? 1%,2% or 20%.--Well any of those and anything in between.

The difference between getting 1% and 20% is ....how targeted the traffic is. The more targeted, the higher the conversion rate.

As an example I was selling Harry potter DVDs. When I targeted the keyword "Harry potter" I got hundreds of visitors and a CR of 0.4%, and when I targeted "Harry potter DVD" I got considerably less visitors but a CR of 5-10%. I then went on to be more specific and target the actual DVD title, and my conversion rate went to 12%.

Now with PPC it becomes obvious that more traffic isn't the goal because you have to pay for the traffic. This isn't so obvious for a normal website that gets most of its traffic from search engines for free.

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