Everything has a value. The items you sell on your site, the time you work on projects and the time you spend optimizing your site. We’re all used to thinking in terms of ROI (return on investment), taking pains to track revenue against the work done to justify the initial work.
These are great, if typical, ideas.
In Las Vegas, there’s a term the casinos use to describe the value a visitor represents to them. The goal the casinos have is to project how much revenue they will make from a player based on past play behavior. So all those free drinks you hear about, all that free parking, or those free show tickets? All based on how much money you’re willing to gamble with them.
Life To Date Theoretical (LTD) is the phrase which describes this. In loose terms, the number generated can be thought of as having value similar to real money. If your LTD is high, you’ll qualify for show tickets, complimentary room stays, meals in the restaurants and more. If your LTD is low, you may only qualify for discounts on parking, if that.
Part of your job is to establish a LTD figure for your visitors and your site. While it’s not easy to establish this on an individual level for every visitor, for some sites it’s still possible. By focusing on a subset of visitors (like those with an established purchase history), you can construct a number to assign to a broader group of visitors, helping you understand the value of people in various areas of the site.
This approach is the core driver behind loyalty programs. And the information you can gather from the data collected can showcase new ways to provide value to visitors and insights into truly underserved products or services.
Another view of value
A few weeks ago Bing Webmaster presented at the Disney Summit, and internal corporate event Disney holds each year. One presentation that caught our attention was that of Matt Bailey. Great stuff that centered on the idea of assigning a dollar value to things, and using those values to sort your products, services or pages.
Every page on your site or every interaction point can be targets for this approach. Key to this, overall, is understanding the revenue generated by each transaction.
The bottom line with this approach is you will see your site in a new light. You’ll actually be able to restack every page and understand how it produces revenue, helping you know exactly which areas to focus on.
You may learn that pages getting low volumes of traffic from search, or low page view numbers might be some of the highest converting pages on your site. Suddenly those dark corners of your site that you didn’t think were worth investing time in take on new meaning.
Taking this approach can help you find value in areas you may have traditionally overlooked. This approach can also shed light in new ways on how visitors interact with your site and content. And while having traffic and visitors is nice, in reality, its conversions a site usually seeks.
This will take some work on your part, but it’s worth tracking this for yourself.
High converting items which lack exposure could be hidden goldmines of revenue, but identifying those items can often be difficult. By tracking from the keyword, through the click and to the conversion, then sorting the results by revenue generated by each transaction, you’ll start seeing your web presence in a new light. Don’t sell yourself short by tracking only to the Conversion Rate (CR) level. Take it one step further by identifying actual revenue at an item level.
This doesn’t replace the usual metrics, nor should it. It is, however, a fresh way to view data from your site. Doing so will uncover new areas to focus on and help you really assign the actual ROI you seek.