"Identifying What 'Conversion Rates' Really Means When Evaluating Potential Solo Ad Joint Ventures"

By Karl Augustine
Posted Monday, December 13, 2004

Of the major pieces that make up a successful online business, high conversion rates can be one of the most coveted. A solid product, strong sales copy, targeted traffic, effective advertising, and other factors all contribute to the highly important business metric, the "conversion rate".

The term "conversion rate" is simply the ratio of people that visit your site versus the number of people that visit your site and buy something from your site. If you have 100 people visit your site daily and 4 people buy from you, essentially your daily conversion rate is 4%.

That's obviously an unqualified number because you don't have all the information about those visitors for that day.

There is no real standard definition that everyone adheres to and agrees upon and there is no governing body that says online marketers must define "conversion rate" the same way.

The "conversion rate" metric can take into consideration any of or more of the following:

* A 1st time visitor to the site versus 1st time visitor who buys your main product on the 1st visit.

* A visitor who reviews your site but doesn't buy on the first visit but does buy on a subsequent visit.

* A visitor who doesn't buy but joins your list and buys later.

* A visitor who doesn't buy your main product but joins your list and buys another product of yours.

* A visitor who buys a product from you not associated with the main site which is where they were originally referred.

* A visitor who buys your main product in a bundle that includes other products the visitor is interested in.

*And so on...

Take the above scenarios and add in the fact that most of the time the source of the traffic isn't given, and you can easily get an 'ambiguous at best' definition of what "conversion rate" means.

Many successful online marketers with lists are bombarded with joint venture proposals that include some sort of conversion rate metric designed to build intrigue and desire to the list owner to make them seriously consider going ahead with the solo add joint venture proposal.

While the conversion rate metric is a necessary piece of the potential joint venture package, it can be misleading if not properly qualified.

So, what questions do you ask to properly qualify what 'conversion rate' means and how do you verify it?

Short of looking at the other marketer's web log, you really can't verify the metric. The best thing to do is to review the product yourself if possible and take a look at the sales copy of the product. Take a look at the Alexa ranking to see what type of traffic the site is getting, at least from a volume standpoint.

Remember, Alexa rankings measure volume of traffic not the quality of traffic. Go to Google or some other search engine and see what types of sites link to the site of the product.

If there are professional well traveled sites that link to the site that fit well within the niche that the product caters to, and the sales copy, price point, and delivery are professional and fitting to the product offering, maybe the conversion rate is comparable to what you're being told it is.

But, just because the conversion rates maybe close to truthful, it doesn't mean that sending a solo ad to your list will work well.

You have to decide for yourself if the product could pull in the type of conversion rates that are being 'sold' to you by the proposer of the JV.

Remember that the source of traffic is one of the main factors that will determine what type of conversion rate any JV will obtain. Ask yourself if your list will respond well to a solo ad JV. Only you as the list owner will know whether the product will be useful to your list and purchased by your list.

Be humble, work smart, keep it simple.

Karl Augustine
"The Regular Guy" (c) Karl Augustine Starting an online business

About the Author
*Author, "9 Deadly Mistakes To Avoid When Starting An Online Business"
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