Startup Marketing Part 3: The Nine Levels of Traffic Quality

By now we’ve discussed the fact that you should first plug your funnel, then improve conversion rates, then work on sending as much traffic as possible to your website.

But we haven’t talked about how big of a role traffic quality plays in determining your conversion rate.

Traffic Quality
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 an example, Bidsketch is a product launched by a Micropreneur Academy member. A few weeks ago I was writing up a detailed case study of its launch (published inside the Academy).

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.

General Rules
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:

  1. Mailing list (assuming you have a relationship)
  2. Your blog (assuming you have a relationship)
  3. A referral link from a targeted website with a positive write-up about your product
  4. 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)
  5. An organic search on your product name
  6. A referral link with no write-up or from a non-targeted website (such as TechCrunch)
  7. All other organic searches (assuming this is their first visit)
  8. Google AdWords
  9. Banner and other advertising

I can point to exceptions to the order of the items above, but in general the trending follows this list.

The Moral
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.

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14 comments ↓

#1 Rex Dixon on 01.12.10 at 4:22 pm

While true, TechCrunch traffic is usually junk traffic; depeding, it amuses me to see how excited people get to be written about on TechCrunch.

Now while the above is true, it does provide your site with a ton of traffic, even if your startup is the biggest head scratching company ever conceived. It does serve it’s purpose, as limited as that might be; oh and it’s made the owner of TC a very nice income.

What are your thoughts about testing such a list of 9 items you listed above? Do you think a site like http://www.performable.com could help?

#2 Rob on 01.12.10 at 4:45 pm

>It does serve it’s purpose, as limited as that might be

I disagree. The purpose of traffic is to convert into customers or provide SEO benefit. TC provides some SEO benefit, but it’s not the golden ticket many people make it out to be in terms of bringing people who convert to customers.

#3 Dan on 01.12.10 at 5:32 pm

To optimise conversions you should employ a web analytics provider such as clicktale to show you how your customers enagage eith your site. From the results fo the aggregate behaviours, real time videos and heatmaps you can mend any deficiencies and make it easier for visitors to your site to become buyers.

#4 0% is a conversion rate too « the goose on 01.12.10 at 9:32 pm

[…] is a conversion rate too If we can just get 1% of our visitors to convert  […]

#5 Ruben on 01.13.10 at 11:20 am

Great post Rob!

So it seems as though after #5, you’re dealing with people that haven’t heard of your site/app before. That completely makes sense to me. I found Google AdWords traffic at #8 interesting. Is it so low because it’s advertising? Targeted advertising, but advertising nonetheless I suppose.

#6 Rex Dixon on 01.13.10 at 12:21 pm

@#2 Rob –
>I disagree. The purpose of traffic is to convert into >customers or provide SEO benefit.

While that is true, sometimes with startups you want the traffic. In fact with most startups, without the traffic, people don’t even know you exist. So by getting the attention via TC, they accomplish that.

Now the sad thing is that the startups usually don’t figure out that they need to convert those people until it’s too late. In fact I can probably point out quite a few startups that didn’t take advantage of that TC surge. I know of some personally where I helped to get that TC surge and the company went flat because they didn’t know the gift I gave them.

#7 Rob on 01.13.10 at 3:08 pm

>I found Google AdWords traffic at #8 interesting. Is it so low because it’s advertising?

Yes. AdWords are a difficult one to place on this list. For some of my websites it falls as #5, for some it falls at #8. In either case, it’s low because it’s not a trusted source for most people – no one is speaking on your behalf like they tend to be with a link from a referring website.

When people realize it’s advertising (some people know AdWords are advertising, others don’t), you don’t have as much credibility as when someone is vouching for your product or service.

#8 Rob on 01.13.10 at 6:22 pm

>While that is true, sometimes with startups you want the traffic. In fact with most startups, without the traffic, people don’t even know you exist. So by getting the attention via TC, they accomplish that.

You’re falling into the “any traffic is good” trap. Startups aren’t here to build a brand – they’re not Proctor and Gamble or Versace…as a startup you’re here to acquire customers, and non-targeted traffic is almost worthless.

If you sell hammers from your website and 10,000 people from TechCrunch visit your site but none of them needs a hammer then this traffic is virtually worthless. Having 10,000 people hear about your startup and then forget about it 3 seconds later (which is what happens) is as good as them never hearing about it.

>I can probably point out quite a few startups that didn’t take advantage of that TC surge

This is because it’s almost impossible to take advantage of TC traffic – this traffic doesn’t convert well and doesn’t click on ads. No amount of optimization is going to make this traffic turn into gold unless your target market is people who are interested in tech startups.

Higher quality, niche traffic is typically 2-10x more profitable than the drive-by traffic you see from TC.

#9 Ash on 02.09.10 at 1:45 pm

Very interesting post, no. 9 gives way to other PPC SE’s like Bing and Yahoo? Also no mention of video? One good video on youtube can drive huge traffic. Also by having a facebook group with active users about the subject matter/problem/solution etc it can fall into category 3.5 maybe?

NO mention of JV’s either although it could be said that is point 3.

#10 Rob on 02.09.10 at 2:28 pm

>Very interesting post, no. 9 gives way to other PPC >SE’s like Bing and Yahoo?

Having done little advertising on the other PPC networks I would assume they would fall in with #8. But it’s just a guess.

>Also no mention of video? One good video on youtube >can drive huge traffic.

Good point. It actually depends how they find the video. If they find it using the YouTube (or other video website) search mechanism, or through a Google search then traffic would likely fall into 5 or 7, though video has a bit more potential to engage its audience than a standard web page.

But since a lot of YouTube-related traffic winds up being direct, type-in traffic I’m not sure where it performs.

>Also by having a facebook group with active users >about the subject matter/problem/solution etc it can >fall into category 3.5 maybe?

It depends. In my experience most Micropreneur niches do not benefit from having a Facebook group. But if you put one together I would guess it would fall between 2 and 3.

>NO mention of JV’s either although it could be said >that is point 3.

Correct. JV’s are almost always a recommendation from someone who has an audience that trusts them to some degree.

#11 Why Free Plans Don’t Work | Software by Rob on 08.18.10 at 6:32 am

[…] The numbers looked but great, but I suspected they weren’t sustainable because I had launched to my mailing list. A well-maintained mailing list tends to convert much better than traffic from other sources. […]

#12 Neil on 08.23.10 at 5:35 am

For me making traffic is hard period, as a web designer I’m no stranger to SEO and I know it’s a whole different ball game, the amount of articles I’ve read on how to gain traffic via social networking etc is ridiculous.

My conversion rate for my current traffic isn’t bad at all (around 1 in 40 sign up), I haven’t made a serious effort as my product is only in it’s initial sign up stage, so I’m hoping when I finally launch I’ll reach a decent amount of traffic that I can then work on the quality of conversion.

Great book by the way, just finished the freebie and I’m going to purchase the full version soon!

#13 Why You Should Start Marketing the Day You Start Coding | Software by Rob on 10.16.10 at 12:29 am

[…] marketing. The first 6 (not required before you read this one) are available here: part 1, part 2, part 3, part 4, part 5, part […]

#14 Top Startup Blogs, All Traffic Does Not Convert the Same, Time Tracking Without Timers, and more… | Software by Rob on 11.08.10 at 6:56 am

[…] Traffic Does Not Convert the Same – Along the lines of my post Nine Levels of Traffic Quality (though he ranks traffic sources in a different order), this is an in-depth look at one […]