In all web site projects I have always been involved, people ask me how to improve their websites sites. I asked them A) what the goal is (desired outcomes) and B) what the current Average Goal Value (AGV) is.
Identifying the economic value your website adds to your business when those goals are met is key even before you employed an Online Marketer or Web Analyst to mock around with your Google Analytics, Site Catalyst (Omniture), Web Trends, Core Metrics or whatever web analytics tool your website might have.
The economic value of your website must include all type of desired outcomes your website can offer to the Consumer Purchase Journey and Consumer Types (wow..just remember I have write a post about these two). not just straight online purchases.
Understanding Consumer Purchase Journey & type of Average Goal Value:
1. Awareness: Average Web visit Value = Average purchase value ($) multiplied by online buyers percentage from total web site visitors. Just a simple visit to your site can generate real and tangible value to your business bottom line. By following the formula above you will know what value each visit brings to your site. Example: Total monthly visits: 60.000; Conversion rate (Online buyers % of total visits: 2%; Average purchase Value: $600. Therefore Average Web Visit Value is: (600x0.02) = $12.
2. Involvement & Preference: Some of the goals of your website might be getting people to contact you or to meet you in order to be able to buy from you. Below is an example when you have a “Contact me" form on your site and you want to know the value of getting users to complete that desired action. Average “Contact me" Value = Average purchase value ($) multiplied by Converted sales percentage from “Contact Me/Info requests- thank you" leads. Your sales team or CRM should be able to give you the percentage number needed above.
3. Purchase: This is the ultimate and most common and popular goal in transactional websites. Over time you want to know what channels/campaigns/timeframes are driving better/worse quality average purchase goal value. In the below example, we consider the goal is to drive users to purchase and get a “thank you for shopping with us" page. Average “Thank you for Shopping with us" Campaign X/Channel Y Value = Total purchase value for Campaign X/Channel Y divided by number of transactions from the same Campaign/Channel.
4. Loyalty: You want to know if existing customers are buying more and more often from you over time. Formula as per below: Average Repeat Purchases Value = Total purchases from Existing customers ($) divided by number of transactions from just existing customers.
Another way of looking at looking at Average goal values is by Consumer types:
1. Consumers who do not know about the Category/brand: Here, you want to know what’s the value of educating prospective consumers about your category/brand over time. As an example, lets say your website offer a Free product trial. Users have to fill in a form and request it. Average “Thank you for requesting sample" value = Average transaction value ($) multiplied by converted buyers percentage who trialed sample.
3. Brand switchers: They buy from you if you give them more for the same price or if its cheaper than others. You want to know what’s the value of selling to them from your website over time by specific campaign/discount/offer/promotion. As an example, lets say you create a downloadable coupon to take to a physical cash register to be redeemed. The below formula will apply: Average “50% off on all chocolate condoms offer" coupon download value = Average transaction value ($) multiplied by converted buyers percentage from “50% off on all chocolate condoms" offer.
4. Repeat buyers: You want to know what’s the value of converting new buyers into Repeat Buyers. Lets say that your consumer insights research tells you that users might buy more often from you if the subscribe to product news by an e-newsletter. Any successful subscription to that e-newsletter is your goal and you want to know the value of this goal over time. You can use the below formula to set up in your Web Analytics tool the Average Goal Value for this action and then start tracking the variations over time. Average E-newsletter Value = Average purchase value ($) multiplied by converted sales percentage from e-newsletters subscribers.
Once you have a clear understanding of your website Average Goals Value, you will be able to understand seasonality and whether your website is getting better quality visits/quotes/purchases (increase in goal value) or worse quality (reduced goal value). So how you manage to track all the above… Well, campaign codes have to be assigned in your Web Analytics tool, tracking every campaign/channel as a Goal. In Google Analytics, you can do this using "Advance Segments" that includes specific events, so you can set url tracking parameters for each channel/campaign and monitor each as a goal and see how it creates conversions at the different Consumer Journey/Types mentioned above. Once your business use this data and see its power and value, you will be able to improve connections with your consumers and increase ROI.
- Let's Talk we can help you improve your average goal value. Call Mauricio - Digital Marketing, Social Media & SEO Consultant Sydney on +61481 367 711
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Mauricio Escobar Mármol (BBsMn & MCom) is eDigital Sydney SEO Consultant, Social and Digital Media Specialist. Mauricio posses over 10 years experience helping companies to earn new customers and prolong customer lifetime value by effective execution of structured Digital Marketing strategies and executions. Mauricio worked as Digital Marketing Manager for some of Australia's most visited websites. Mauricio expertise focuses on Website Optimisation, Social Media, SEO/Networks Acquisition Strategies (SEO, SEM, Affiliates, Display) and vendor reviews.