Setting the Stage

Conversion rates for online advertising seem dismal. The chance that any person who receives an advertising message will click through to your site is a fraction of a percentage, and the percentage of those who click though who convert is a fraction of a percentage.

The common practice is to flood the market with advertising, maximizing reach, so that the fraction of a fraction adds up to significant sales. A more cost-effective practice would be to improve those percentages.

The author "sells" statistics for a bit - indicating that because of the unique nature of the Web (everything is traceable) and the large numbers involved, monitoring your Web site traffic patterns can have highly relevant results, and he lauds analyzing this data, the behavior of your actual audience, on your actual site, performing actual tasks, as being far more relevant than surveys, focus groups, or laboratory experiments.

The Three Keys to Online Marketing

The author does the usual "funnel" diagram - worth noting because his terms are a little different than I've seen in other sources:


This activity focuses on getting traffic to your Web site, to create an awareness of your company and products, preferably among a pregnant market demographic.

Methods for online acquisition are:

Traditional (offline) acquisition methods are not to be abandoned. Brand awareness offline increases the chance that an individual will recall your company and seek you out of their own accord.

EN: Traditional media also improves the esteem of your company in the eyes of potential customers. Companies that market offline are seen as more reliable and trustworthy than pure online players,


Conversion is the main topic of this book: it is taking a person who has expressed an interest (by visiting your Web site) and getting them to perform an action that is beneficial to your organization. The action is traditional a purchase, but it can be other things as well - providing information, downloading additional information, or just exploring your site.

The core statistic is the conversion rate - the percentage of visitors who actually perform this desired action. Conversion rates vary differently among industries and competitors, such that a "standard" rate is not a reliable benchmark. Instead, you will have to depend on before-and-after metrics within your own site.

Conversion does not occur in a vacuum - there are a number of factors that may have nothing to do with your site:

Offline conversion rates cannot be applied to the online medium - it's not an apples-to-apples comparison.


Retention is the conversion of a one-time buyer into a regular customer, and this is critical to the long-term success of an organization. Retention programs (should) start immediately upon completion of the action, and involve communication in order to encourage future interaction.

It's worth noting that the company lacks power in the customer relationship: the decision to interact again is solely the customer's, and there are increasing constraints on the company's ability even to solicit them in the future. You must obtain permission to contact them in the future, though it is found that as a relationship progresses, that permission will be easier to come by.

Some of the methods for customer communication are:

Of importance: every interaction with a customer contributes to your success in maintaining an ongoing relationship with the customer - but it can also be damaging to your relationship.

The Myth of Perfect Conversion

The goal of a 100% conversion rate is a myth. This is largely because with Web site visitors, there are a significant proportion who are not prepared to take an action, regardless of what you do to incent them.

Fundamentally, divide the audience into three segments:

The third group is the focus of your efforts, however, the first two define a floor and ceiling for your conversion rate: You will always get the "yes" customers (unless you do something painfully wrong) and you will never get the "no" customers.

It's also worth noting the "conversion" may not happen immediately - it may be delayed for hours, months, or years.

Conversion as the Weak Link

In the marketing world, a lot of time and resources are spent on reaching potential customers, and customer retention has come into vogue over the past couple of decades, but little attention has been paid to conversion - so there is a distinct lack of tools or theory that are available presently.

However, the author sees conversion as the "new battlefield" for the coming years, and the companies that do it ell will reap the reward of their efforts.