By Brian Molstad, Molstad Consulting LLC, www.molstadconsulting.com
Everybody knows that money talks. It’s no different in the world of web analytics. When dollar values are assigned to site behaviors and other key metrics, the value of user actions and traffic sources becomes immediately clear.
Monetization isn’t just for ecommerce sites. Other user actions such as contact form submissions, file downloads, page views, and email newsletter signups are also excellent candidates.
If it’s your job to convince stakeholders to act, or if you’re an executive looking for more clarity in your key performance indicators (KPIs), this post will offer you some ammunition and help get you started.
Monetization’s Impact on Language
Monetized language is much more effective than un-monetized when communicating to decision makers why a certain site update should be undertaken. Take these examples for instance:
Un-monetized: “After mapping user traffic trends to goal completions for our site’s primary lead generation form, I found that the percentage of site visitors who find their way to the lead generation form is low and the conversion rate of visitors who access the form itself is less than optimal. We should work to improve these metrics.”
Monetized: “We’re leaving money on the table. With minor adjustments, we could significantly increase the number of leads we get through the website. Our web analytics and past order data shows that each lead we get through the site is worth $730. With some minor changes, we can increase our visitor-to-lead conversion rate by 10%, conservatively speaking. This would mean an additional $190,000 per month or $2.3 million a year in revenue. We should act soon. If we wait three months, we’ll be passing up $570,000.
Which example gets your attention?
The Benefits of Monetization
Here are some reasons why your organization should take a monetized approach to your data gathering and reporting.
- Concretely know the impact of web development efforts and missed opportunities
- Clearly prioritized initiatives sorted by those that drive revenue
- Less time spent on updates that don’t impact the bottom line
- Removal of internal politics and guesswork from decision making
- Knowledge of your site’s true ROI
Examples of Monetized Behaviors
Lead generation is the most commonly monetized behavior and rightly so. This is the bread and butter of sites that complete their sales through reps or agents. The calculation of a lead value is as follows:
(leads closed x average revenue per sale) / total leads = avg. lead value
For example, if your site produces an average of 500 leads per month, and 100 of them result in sales with an average of $2,000 each, then each lead is worth $400.
Use unique phone numbers and track those calls that originated from the website. The conversion rate (to be reduced) here is those visits to the support section that resulted in a call center call. Use this data to frame any proposed improvements to the support section in clear dollar terms.
With ecommerce, it’s obvious to begin optimizing the checkout process, however increases in other actions, such as views of product detail pages, can also be monetized. By analyzing clickstream data patterns and ultimate purchase rates, you should be able to determine the value of a visit that includes one or more product detail page views. Once this value is established, it will be clearer which improvements that drive traffic to detail pages (such as internal ads, better search results, etc) are worth the effort.
Take advantage of monetization to create powerful reports that get noticed and acted upon. Then get ready to calculate the financial benefits of vastly shorter prioritization meetings and fewer internal debates.