Article printed from SEO-News: http://www.seo-news.com
  HTML version available at: http://www.seo-news.com/archives.html

SEO ROI & The Conversion Rate Dilemma
By Jerry Bader (c) 2008

What do legitimate search engine optimization firms charge? Like
most things involving the Web, prices are all over the place but
if the price is extremely low you can be assured that the
quality of the service will match the price.

If you do a search for SEO pricing from reliable search engine
firms, you will find that although prices vary greatly fees of
$2,500 per month on an annual contract ($30,000 per year) are
not uncommon. Of course some firms will charge less and others
will charge a great deal more depending on where they are
located, the size and condition of your website, and exactly
what services you want them to provide.

Are SEO Costs Worth the Investment?

So what do you get for your $30k ante? Legitimate SEO companies
will provide things like target market analysis, keyword
analysis, content massaging, code modifications, link
implementation strategy, and metric analysis.

And what happens when Google changes their algorithms? Well you
guessed it. You have to ante-up again and the addiction
continues. Search engine optimization has become the
crack-cocaine of Web-based businesses.

Keep in mind search engine optimization's main goal is to
increase your visibility and ranking in search engines which
assumes more traffic to your website; but the leap from
visibility to traffic to sales conversion is higher than you
think. The assumption that better search engine visibility and
more traffic automatically generates more sales is faulty
logic.

Even if increased search engine visibility produces more traffic
to your site and even if your website contains genuine content;
if the presentation of that content doesn't engage the viewer
quickly and if it doesn't hold the visitor's attention for two
to three minutes with a compelling and even entertaining
presentation, then your chances of converting that visitor to a
customer are minimal.

How Much New Traffic Is Needed to Pay for SEO?

Let's say your search engine tactics actually work and they not
only increase your search engine ranking but also drive tons of
traffic to your site. With realistic conversion rates at about
2-3%, how much traffic do you have to bring in to actually pay
for the SEO expertise.

Based on a $30K annual investment in SEO and a 20% Net Profit
you must generate $150,000 in new sales just to pay the SEO
fees. And at a 3% conversion rate and an average sale amount of
$100 per transaction that translates into 50,000 unique new
visitors per year to your site just to pay for your SEO
strategy, and you still haven't added one cent to your bottom
line. You can do the math.

SEO Investment Break-Even Formula

SEO Generated Unique Traffic Break-even = SEO Cost / Conversion
Rate x Average Sale x Net Profit Percentage.

Determining Your Conversion Rate

Every business has a different Average Sales Amount and
generally speaking it is safe to assume the higher the Selling
Price the lower the Conversion Rate. In order to figure out what
your Conversion Rate is you have to do a little more
calculation. Lets say a company brings in a total of $150,000 in
Web-Sales and attracts 25,000 Unique Visitors per year and has
an Average Sale Price of $395.95; their Conversion Rate would be
1.5%. What's your Conversion Rate?

Conversion Rate = [(Total Web Sales / Unique Web Traffic) /
Average Sales Price] x 100

To test the formula, we can check the original example where we
have a given Conversion Rate of 3% to see if we arrive at the
same rate:

CR = [(150,000/50,000)/100] x 100]
Conversion Rate = 3%

The Meaning of It All

After calculating your own numbers, different readers will come
to different conclusions. People seem to be mesmerized by
complex statistics and bean counter analysis but the hidden
meaning behind all the number crunching and mathematical
machinations seems clear: if you want to make more money from
your website the trick is not where you appear on a search
engine or even how many unique visitors you attract to your
site, but rather how many of these visitors you convert into
customers. If you have a marketing budget, it should be spent on
conversions; and conversions are not the primary concern of
search engine optimization. What you really want is a strategy
that will increase conversions.

How Do You Increase Conversions

MarketingExperiments is a research group lead by Dr. Flint
McGlaughlin that studies and analyzes these kinds of Web-related
issues. In a recent study entitled "Optimizing Your Landing
Pages", they came up with a formula for determining conversion
probability. Here's the copyrighted MarketingExperiments
formula: Conversion Probability = 4(Level of Motivational
Matching) + 3(Clarity of the Value Proposition) +
2(Effectiveness of the Incentive - Level of Sales Friction) -
2(Conversion Process Anxiety).

I already have a headache, but here's how they explain it in
more digestible terms: "... the highest performing Landing Pages
are those that match exactly the Motivation of the customer.
After Motivation, the clarity with which you express the Value
Proposition is the most important factor in determining whether
a customer buys from you or not."(c) Copyright 2007
MarketingExperiments, LLC, You can visit the
MarketingExperiments (http://www.marketingexperiments.com/)
website for more details on their research.

I prefer an even simpler approach to increasing conversions:
feature a website presentation that resonates with the needs of
a qualified audience and compels action by providing a solution
to those needs. Repurpose that presentation in affordable and no
cost venues that drives even more meaningful qualified traffic
to your site. Easy to say but hard to do, or is it?

What you need to determine is exactly what needs your audience
craves and how best to engage their attention long enough to
deliver a story that positions your offering as the missing
ingredient required to fulfill their desire and ambition.

The Answer and The Future

The answer to delivering this kind of presentation on your
website is video that features professional presenters
delivering focused, well-crafted messages that motivate action
and embed in your visitors' memory. If done right, these videos
will resonate with the emotional and psychological factors that
trigger human desire and motivation. Like it or not, it is the
future of Web-marketing.

Google, Yahoo and all the other search engines understand that
the Web has become a far more sophisticated delivery platform
than it used to be. Methods are in place to deliver not only
video, audio, and multimedia, but also to index and tag it for
relevance. For when all is said and done, search engines are in
the relevance business. If they can't deliver relevant,
meaningful results they are out of business, and no search
engine optimization trick, scheme or formula is going to stand
in their way.

Those who truly understand the shifting momentum of this reality
are already adapting to this new Web-video paradigm - the
question is are you?
================================================================
Jerry Bader is Senior Partner at MRPwebmedia, a website design
firm that specializes in Web-audio and Web-video. Visit
http://www.mrpwebmedia.com/ads, http://www.136words.com, and
http://www.sonicpersonality.com. Contact at info@mrpwebmedia.com
or telephone (905) 764-1246.
================================================================

Copyright © 2008 Jayde Online, Inc.  All Rights Reserved.

SEO-News is a registered service mark of Jayde Online, Inc.