But we haven’t talked about how big of a role traffic quality plays in determining your conversion rate.
By “quality” I mean the following: how close each visitor is to your ideal customer, and how much of a relationship you have with that visitor.
High quality traffic means each visitor is very close to your ideal customer and they know and trust you.
By the way, this is why TechCrunch traffic is not profitable for startups. It’s completely un-targeted (unless your niche market is other startups) and you have no relationship with that audience. Using our definition above, this traffic is of very low quality.
This becomes apparent the first time you send an email to a list that you’ve been communicating with for some length of time. Your conversion rate for these leads will be astronomically higher than your standard website traffic, as much as 10x higher and in the worst case 2-3x higher. This is because the quality is so much better.
I regularly see a 200% differences in Academy sign-up conversions based on the source (and thereby the quality) of the traffic.
The reason this is important is because you have to understand where to focus your energy when driving traffic. If people from your email list will convert at 5-10x the rate of someone finding your site through Google, you can spend 5-10x the effort getting people on your mailing list and still have a break-even ROI.
Likewise, if you see the massive amount of traffic coming from SEO you have to know how many of those people are buying your product. Without that knowledge you are flying blind and cannot properly allocate your efforts.
Luckily, Google Analytics can spell this out for you using goals. For more info on setting up goals check out this link. You will not regret doing this. You will instantly be able to see that some sources of traffic do not convert at all. And you can stop pursuing that traffic and focus your efforts on methods that convert.
As I was looking at traffic stats I noticed a huge increase in mid-November due to a number of write-ups on startup and web-2.0 blogs. But the number of conversions stayed about the same as it had been the week before, meaning the conversion rate (the number of sales per visitor) plummeted.
Is this bad?
No, as long as you know why this is happening. And the reason, of course, is traffic quality.
Removing the Junk
In fact, my next step was to look at all visitors that stayed longer than 5 seconds, and that removed 67% of the traffic. In other words, two-thirds of the traffic from the startup and web-2.0 blogs stayed less than five seconds on the site. It was obvious they were there for a quick peek. Including them in any kind of conversion rate calculation would be a mistake. And thinking you had a major win by being listed on these blogs would also be a mistake.
Sure, it’s nice to have several thousand people see your website, but if they don’t convert they may as well have not shown up at all. And don’t think you’re building a brand – you’re not Coca-Cola. The minute those users leave your site you are out of their mind forever.
It’s impossible to say unequivocally which traffic is better for every website, but having launched or revamped over 20 revenue-generating websites I’ve noticed a definite pattern in traffic quality based on the source.
Here is my list, in order of quality:
- Mailing list (assuming you have a relationship)
- Your blog (assuming you have a relationship)
- A referral link from a targeted website with a positive write-up about your product
- Direct traffic (this typically means someone heard about your product on a podcast, read about it in print or in an online article with no link, or the person is a repeat visitor that remembers your URL)
- An organic search on your product name
- A referral link with no write-up or from a non-targeted website (such as TechCrunch)
- All other organic searches (assuming this is their first visit)
- Google AdWords
- Banner and other advertising
I can point to exceptions to the order of the items above, but in general the trending follows this list.
Blog to build your RSS and email subscriber base for the highest quality traffic. Participate in blog and podcast interviews for the #3 and #4 spots. You should always perform on-page SEO since it’s a simple step to take, but only move down the list above if you have exhausted the first several traffic levels (and you will not do this until you’ve achieved a decent level of success).
Focus your time on high quality traffic and your high quality traffic will focus its time on you.