Your Site's Bounce Rate, Why Important?

Summary: Improving your site's conversion rate largely starts at lowering your bounce rate. Why? Because every customer that bounces from your website is a lost opportunity to explain your value proposition and give your sales pitch.

What should you do if you have a high bounce rate? Avinash Kaushik, of Google's Conversion University, provides a great video explaining why a successful website must have a low bounce rate. While you watch the video, try to pick out reasons a high bounce rate is so detrimental.

Avinash brings out that a bounce rate between 40 - 60% is considered good. You'll never get everyone to stay on your website; nevertheless, if your bounce rate is higher than 60% you should begin by asking, Is there a problem with your website or is there a problem with your traffic sources?

A high bounce rate can occur because your traffic sources are low quality. If so, try to look for better sources of traffic. For example, if you're spending money for highly bouncing traffic through banner ads or pay-per-click advertising, cut back on this spending. You might try marketing strategies such as article writing and direct-mail instead.

If the problem is your website, then you need to look at your top landing pages and see if you can understand what the visitor is looking for by seeing how he got to that landing page. Did he arrive at the landing page through a Google search? If so, look at the keywords being used to hit that landing page and make sure the landing page addresses the needs of someone searching with those keywords. Is the visitor hitting your website from a business directory such as Yahoo.com? Make sure the landing page from that directory category gives the information you would expect such a visitor to want.

Improving your bounce rate will take time and it may take many design iterations before you finally find a solution that gives you an acceptable bounce rate. However, improving your bounce rate is worth the effort. A high bounce rate is a sure fire way to low website sales. A low bounce rate drives greater sales and means your website is making a more favorable impression with visitors.

What is the value of a single website visitor?

Google Analytics statistics for TechCrunch.com. Posted on CrunchNotes.com

Summary: By looking at the revenue per customer of Amazon.com and TechCrunch.com we can estimate how much the average business should be spending on its website. Website owners know that if the amount they're spending on their website exceeds the site's revenue generating potential they will quickly find themselves in bad shape financially. However, many site owners don't know what a mature site's ultimate revenue earning potential will be. This post attempts to help you calculate this on a per visitor basis.

We all seek to increase the number of visitors to our website. However, the amount that many companies spend to acquire a single visitor is often far beyond the value of that visitor. It is intelligent to analyze your website’s revenue potential to ensure you never spend more to acquire a visitor than the amount of revenue that user will generate.

Unfortunately, most of us face a catch 22. Because most of us have never had tens of thousands of visitors hit our website every month, we don’t know how much money we can generate from each visitor.

We optimistically imagine that if we can get traffic at what feels like a reasonable cost, then we will be able to recoup the investment to obtain that traffic.

But as a reality check, let’s look at someone else’s data to see what type of revenue generating potential is reasonable to expect from our website.

First let’s look at a successful content website. Yesterday I was watching this Yahoo! Tech Ticker about TechCrunch.com a successful technology blogging website. In the video, Michael Arrington, the founder of TechCrunch.com, reveals that TechCrunch.com has an annual revenue run-rate of $3 million. Then today on Michael Arrington’s blog, he posted the above graph from their Google analytics data. This graph shows that in January TechCrunch.com had 2,647,027 visitors.

So how much revenue is TechCrunch.com generating per visitor to their website? At the current reate, TechCrunch.com would get about 31.8 million visitors per year. At $3 million in revenue per year that is about 9.5 cents per visitor.

So, one of the most successful content websites, TechCrunch.com, generates only 9.5 cents per visitor. Are you operating a content website? Are you spending more than 9.5 cents per visitor to acquire readers? Remember you must include all costs in this figure, including any costs to author and host content.

What if you sell a product? Let’s look at another example. As of this writing, Amazon.com gets about 600 million visitors per year and generates $14 billion in revenue for these 600 million visitors. Thus, Amazon is making about $23 per user.

If you operate an e-commerce website, do you think your revenue per customer is similar? Can you build out this website, grow it, and advertise it for less than $23 per customer?

What should we, as website owners, do with this information?

Steve Pavlina, who is currently generating significant income from his website, has this to say: “Your business should put cash into your pocket, so before you ‘invest’ money into it, be clear on how you’re going to pull that cash back out again.” ("10 Stupid Mistakes...", March 2008)

What’s the point? Please make sure, before you invest any money into your website, that you are being realistic about your revenue generating potential. Don’t pour money into your website only to find that you quickly run out of budget and only have a small revenue increase to show for all of your money, time, and effort.

Do you operate a content website? Then ask yourself, realistically, should I be spending any money on advertising? Perhaps you should be focusing on generating quality content and nothing else.

Do you operate an e-commerce website? Then ask yourself, realistically, should I be more concerned with increasing my traffic or increasing my revenue per customer? Perhaps you should be increasing your revenue per customer and forget about increasing your traffic at this time.

If you are to be successful, the answer to these questions must be impacted by a realistic assessment of the value of a single website visitor for your company.

Make sure you carefully compare your income per customer to your investment costs per customer before you invest a penny in your website.

[Video] Site Review: Online Bargain Hunting Website

Summary: A good homepage is one that gets straight to the point. In today's review of DealJuggler.com, we see a website that does this well. This is probably why DealJuggler.com is a consistent money maker. However, as with any website, DealJuggler.com can make improvements. Most importantly, the quality of some images on this website is poor. Poor quality images immediately make your website look amateurish. By improving this aspect of DealJuggler.com the website would look that much more professional. However, changes like this won't drastically change DealJuggler.com's earnings. This is a good website, without too many bad points. The best way for this website to grow sales is to keep finding shopping bargains. Watch the video to see the entire review.

[Video] Site Review: Skating, Surfing, and Active Wear Website

Summary: Today I review a skating, surfing, and active wear website to look at what they do well and what they can improve on. As always, the goal of this review is to look for lessons business owners and executives can use as they think about how to improve their website. This website does a very good job of using a black background to target the young skater demographic. Also, a large prominent picture on the home page draws in the shopper. Watch the video to learn more.

What is a Good Website Conversion Rate?

Chart based on marketing research data from MarketingCharts.com.

Summary: The best retail websites have a double digit conversion rate. If you are a retail website you do well to set a conversion rate target of greater than 5%. However, some websites, especially those that also mail customers a print catalog, can obtain a conversion rate greater than 10%.

Just what is a good website conversion rate? For reference, Amazon.com had a 17.6% conversion rate in December 2007. This number can help us set a baseline goal for our websites.

Your website conversion rate should be one of your most tracked website statistics. Why? Because it doesn't matter how many visitors you have; if your conversion rate is zero that means your website has generated zero business. Thus, improving your conversion rate is the smartest way to increase your sales.

Your conversion rate is calculated by dividing the number of website visitors who spent money with your company by the total number of visitors to your website. For example, if your website had 10 purchases last month and you had 100 total visitors, then your conversion rate would be 10% (e.g. 10% of customers spent money on your website).

A well designed website is generally going to have a higher conversion rate. You do well to ask yourself:

1. What is my conversion rate today?
2. Am I happy with my current conversion rate?
3. Is my current conversion rate good for my industry?
4. What can I do to improve my conversion rate?

Unfortunately, conversion rate statistics for each industry are difficult to find. I did, however, come across data from MarketingCharts.com that lists the top 10 websites on the internet by their conversion rate!

What can we learn from this list? I can identify at least two lessons:

1. That conversion rates in excess of 10% are possible for a retail site. Compare this to your site.
2. That sites that send out a physical catalog to customers dominate the conversion rate list. Perhaps you can include direct mail marketing in your budget.

This list leaves us with some questions. For example, what makes The Popcorn Factory such a successful website?

If we can learn lessons from successful websites that have proven their ability to convert website visitors into paying customers, then we can generate more income from our websites.

To accomplish this, I will soon be analyzing some of the companies from this list and sharing that analysis on my website. Please check back for the analysis.

In the meantime, why don't you examine these top ten websites and see if you can determine why they are so successful at converting website visitors into paying customers. Then apply these lessons to your website.

[Video] Site Review: What contributes to a successful e-commerce website?

Summary: A good e-commerce website should have large, quality pictures, clear pricing, and a professional clutter-free design. In this video we analyze the website of a hardware tools e-commerce site and see how it rates on each of these factors. As you watch this video, think about what you are doing well and what you can improve on your website.

[Video] A relevant homepage keeps the customer browsing your website.

Your website's homepage must tell the visitor exactly what product or service you provide. Otherwise he will leave. The visitor will not investigate. This video looks at a packaging container company's homepage to see how they do this well, and what they do poorly.

Is the first page your customer sees the correct one?

It’s easy to always point your customer to your home page. However, is that what your customer wants to see? If you point your customer to the wrong page on your website he may leave before he finds what he is looking for. Thus, you won’t get the sale.

This is especially a problem if your customer is visiting your website after viewing one of your advertisements. For example, if your Google ad says that you have a 50% off sale, clicking the ad should take the customer directly to your sale and not to your homepage.

Problems like this can make the difference between getting a sale and not getting a sale. Make sure your ads point the customer to the correct page.

This article, on NetMechanic.com, explains what makes a landing page profitable.