November 26, 2010
Almost every frustrated website owner I talk to struggles with one or more components of what I call the Online Success Formula. Very briefly the formula looks like this: Traffic x Conversion x Life Time Value = Revenue.
Traffic is the number of people that visit your website.
Because of increasing competition and lack of online marketing expertise or budget, the vast majority of small business websites lack traffic. Looking at the equation, the greater the traffic figure the higher the revenue. Fortunately, there are hundreds of ways to resolve traffic issues.
Life Time Value (LTV) is how much an average customer is worth to your business from the time she begins working with you to the time the relationship ends. You can raise LTV by increasing your prices, reducing your overhead or variable costs per sale or you can simply find ways to sell more to each of your customers. Again, as LTV increases so does your revenue.
The third component and the one that we’re going to talk about here is website conversion. Every website exists for some reason. It could be to sell revenue, sell products or generate sales leads for your business. For the majority of small business owners, the primary purpose of a website is to share information, build trust and get prospective customers to contact you when they’re ready to discuss business. In other words, to generate sales leads for your business.
Conversion is calculated in many different ways depending on the purpose of your website. Let’s assume that you’re looking to generate sales leads. In this case, you’ll calculate your conversion rate by dividing the number of sales leads your receive (either phone calls, subscribers or completed contact forms) by the number of visitors to your site. Again, the higher your conversion rate, the higher your revenue figure in the equation above.
Traffic gets all the attention but conversion is interesting too. Since most websites convert very poorly a small increase in conversion can have a massive increase in revenue. A jump from 1% conversion to 2% means a two-fold increase in your online marketing results.
So finally we get to the million dollar question and the point of this article. How can you increase the conversion (results) of your website? Easy.
Add video to it.
Most websites don’t convert well because visitors are lazy. They get to your site and are faced with a plethora of options. Rather than make a decision and pick one, they get confused and hit the back button. But when you add a video to your site telling them exactly what you want them to do it grabs their attention and greatly improves the odds of them actually following your instructions. And with video, lazy people don’t have to read as much. This is also important.
The other factor that may be hurting your website conversion is the fact that the Internet is loaded with scammers and scumbags. As a result, all of us (your prospects included) are skeptical to say the least when reaching any new website. However, when they see a video of a real person on your site speaking to them they immediately become more trusting. That person in the video can be you or it can be a professional actor but either way, it will build visitor confidence and you should see significant improvements in your website’s conversion rates.
The use of video on your site has many other benefits but the two above are the two biggies. Test it out yourself and see if adding a short video to your site doesn’t help your conversion.
Eric Haaranen is the author of Nice People Can Sell and the owner of Vancouver Video Promotion. For more insider tips to improving your online marketing results pick up Eric’s latest free booklet at videopromotion.ca