Calculating the Conversion Rate
At the core of this mechanism is the conversion rate, which I will define here as a percentage of your total targets who actually purchase your product. So if, for example, 1,000 people visit your web page and 20 of them end up buying from you, your conversion rate is 2%.
This right here is the key to the kingdom, the one that unlocks the door to untold riches and unimaginable success! Conversion rate ranks right up there with compounded interest as unstoppable forces of success and wealth building. Conversion rate is also what savvy and successful online marketers live by. They have made a science out of reckoning how many visitors to a web page it takes to convert the numbers necessary to generate the target revenue.
Because conversion rate can be directed, generating target revenues becomes a highly actionable goal. You can work backward from the conversion rate to build the action path you need to take. For example, if the goal is to make $2,000 selling $100 widgets, and the conversion rate is 2%, you can calculate that you need to have at least 1,000 visitors to your site so that 20 of these will buy and you can hit your target revenue.
With a clearer picture of your goals and the outcomes you need to produce, you can focus your efforts on driving traffic to the page, allowing the conversion rate to kick in and do its job to earn you your revenue. This also gives you the opportunity to effectively optimize your web pages so that they become more efficient at converting visitors into customers and you require less effort and resources to attain your objectives.
The beauty of this whole setup is that while the numbers game is based on getting traffic into your website, it opens up opportunities for you at the back end. Now you have the baseline conversion rate you can tweak specific components on your page to realize incremental increases in efficiency that may contribute significantly to the revenue you generate. For example, you can experiment with your web page copy, landing page layout and overall user experience design. Each improvement you make in each of these areas increases your conversion rate somewhat and likewise increases your potential to draw in revenue.
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