Case Study: Critique Of The Existing Industry Formula For Measuring The Value Of Each Website Visitor

Stop chasing after traffic

I recently became the student of an internet marketer who possesses one of the most brilliant minds in the industry, at least in my opinion. His approach and interpretation are quite refreshing and hopeful to me - a jaded consumer of many internet marketing products.

I recently completed one of my mentor's training products about Traffic, that precious commodity that all bloggers and website owners long to see. In my mind, the word traffic represents a person, a hopeful consumer of our product (s) and sometimes even a skeptic like myself who has been burnt too many times. 

My mentor wrote these arresting words

"Stop chasing after traffic. Instead, start monitoring Average Visitor Value, and focus most of your attention on it."

All savvy site owners treasure their visitors. They are the 

Site Evangelists

Fan Of  Site Content 

and  sometimes 

The Owner's Next Meal. 

The existing industry formula for measuring the value of each visitor to a website

As I continued to read the book, my mentor spoke about the formula for analyzing the value of each website visitor. I shot off this response to my coach, (who I find to be quite personable, by the way)

Dear Coach

I am reading (title hidden) and I got to the caption titled. I've seen this formula multiple times  - that each website visitor is valued at $1.00 (see attachment). However, I looked at it with new eyes after seeing the table:

This is my insight regarding this formula if it is to be taken at face value: 

1. The marketer could potentially make  $100, 000.00 With 1000 unique visits to the site.

1. He lost $99,000.00 in that particular scenario. This is too much for me to bear.

1. Furthermore, how many people converted? 10 or fewer - one person could have bought multiple products, meaning that there are lost souls still left to be converted to the products.

1. With only $1,000 in profit, the marketer should really be screaming and howling because only 10 sales were made.

To be more realistic, I believe that the conversion rate should be considered

1. We agree that it is unrealistic to expect every website visitor to convert - some of them would be skeptics and others too broke to manage the purchase. 

1. What is the standard conversion rate in the internet marketing world? If it is, say, 3%, then the marketer should expect that 30 unique visitors should convert to give a profit of $3, 000.

1. Now, does the conversion rate vary by niche?

1. Does this particular website enjoy a higher conversion rate than the standard, and why?

It seems that the marketer has lost revenue in each scenario. What do you think? I am going to write a blog post to provoke the community. LOL.

Results of a marketing campaign

I also sent my coach a comment about the results of  the following marketing campaign

Dear Coach

Now I am mulling over the average visitor value and saw:

1. conversion rate on July 5th is 10% - this is high.
2. click rate is 34% - what is the standard?
3. total sales $330 - unit costs should be included. We do not know if we made a profit.
4. I am having some difficulty applying the formula of the visitor value - 1.20 which does not ring true. In my mind, each visitor should be valued at the cost of  each product on the site. Are we saying that we are expecting only 111,00 in sales? That is 93 x 1.20.

Thanks 

Mercedes

Conclusion

I hope for discussion and feedback on my thoughts. Please comment. Cheers.