Conversion models

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As part of situation analysis and objective setting, experienced online marketers build conversion or waterfall models of the efficiency of their web marketing. Using this approach, the total online demand for a service in a particular market can be estimated and then the success of the company in achieving a share of this market determined. Conversion

.m.arkeílng marketing tactics can then be create as many potential site visitors into actual visitors and co mm unseat! on s to then convert these into leads, customers and repeat visitors. A widely quoted conceptual measurement framework based on the industrial marketing concepts of purchasing decision processes and hierarchy of effects models, which can be applied for conversion marketing, was proposed by Berthon et al. (1998). The model assesses efficiency of offline and online communications in drawing the prospect through different stages of the buying decision. The main measures defined in the model are the following ratios:

• Awareness efficiency: target web-users/all web-users.

• Locatability or attractability efficiency: number of individual visits/number of seekers.

• Contact efficiency: number of active visitors/number of visits.

• Conversion efficiency: number of purchases/number of active visits.

• Retention efficiency: number of repurchases/number of purchases.

Conversion maximise conversion of potential customers to actual customers.

Clickstream

The sequence of clicks made by a visitor to the site to make a purchase.

This model is instructive for improving Internet marketing within an organisation since these different types of conversion efficiency are key to understanding how effective online and offline marketing communications are in achieving marketing outcomes. Figure 2.13 is an adaptation of the original model of Berthon et al. (1998) from Chaffey (2001), which highlights the key conversion metrics of attraction efficiency and conversion efficiency. It shows key traffic or audience measures (Q0 to Q4) and key conversion efficiency ratios. The model has been revised to reflect current nomenclature. Also, the original work was focused on conversion to purchase - the model is more widely applicable since it applies to any marketing outcome achieved on site, whether this be a new lead from a potential customer, an e-mail registration from a competition entrant or a sale. Additionally, it has been modified to distinguish between first-time visitors (Q2) and repeat visitors (Q2R). E-marketers need to know how conversion effectiveness differs between first-time users and repeat users. An additional important aspect of online buyer behaviour not shown in the figure is the site path or clickstream for different audience types or segments.

Audience measures

Internet universe Qo

Target audience Q1

Repeat visitors Q2R

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