I expected sales from the volumes of visitors sent to my website.

Have you said this before?

Lets imagine that you had setup a paid search campaign using a second-tiered paid search engine like ePilot to drive visitors to your website. Chances are you were thinking that if you can generate thousands of new visitors to your website that you will automatically generate more sales, right? Its a fair assumption especially since like traditional sales, online sales is a numbers game.

Unfortunately, assumptions tend to oversimplify. In paid search as with other marketing channels whether online or offline, the relative quality of the visitor pools accessed by the marketing channels like paid search lead to the conversion of visitors into sales. Quality in relation to the relevancy your product or service has to the target market and user profile accessed by the marketing channel. The higher the relevancy the greater the conversion probability. Likewise, a hungrier pool of qualified visitors, the greater opportunity for you to close more sales.

Each distinct marketing channel (like contextual advertising) and the visitors attracted through them will produce varying outcomes for the same website. Therefore, even if your website produces a favorable sales conversion from natural search engine visitors, there is only a probability that another marketing channel will deliver similar or better sales conversion results. Why? Because

All traffic is NOT created equal.

So how do you know how to attract sales and not just more visitors?

By following these three steps:

1. Define your Most Important Action

All businesses have a most important action which their marketing efforts seek to acquire from their website visitors such as sales, leads, and content or membership subscriptions. You must define your most important action and use it as a measuring stick for gauging results.

2. Test, Test and Test Some More!

Search properties like Google, Yahoo, MSN and content websites like Wall Street Journal and ESPN have their own unique user demographics and psychographics that you gain access to through specific marketing channels. Unfortunately, figuring out exactly which search properties and content sites have your perfect customer profile mix is neither a simple effort nor even a practical one.

Therefore, test multiple marketing channels including second-tiered paid search engines like MIVA, Kanoodle and Enhance or contextual advertisers like MetricsDirect using a small speculative budget. The most important aspect though of testing and of spending even your speculative budget wisely is provided in step three.

3. Use Performance Metrics to Judge Next Steps

Because you have established your most important action, you are capable of determining the success or failure of your test marketing channel. Calculating your performance metrics is a straight-forward procedure. Here is what you do

a) Before you activate a new marketing channel, purchase a campaign tracking system like HyperTracker, Conversion Detective or any of the other credible ones on the market. This will enable you to effectively distinguish your test marketing channel from your other active channels and provide data points for calculating your performance metrics.

b) Setup the test marketing channel using your expert marketing abilities by developing powerful creative, writing alluring ads and selecting highly-relevant keywords. Put everything into making your test marketing channel a huge success.

c) Make sure that your campaign tracking system is recording all visits and your most important action accurately. Then run the test marketing channel until your budget is depleted.

d) Gather the data from your campaign tracking system for the test marketing channel and calculate your performance metrics to determine whether to: (1) kill the campaign, (2) run a second test to generate further data for analysis or (3) maximize the channel and add it to your marketing mix.

So what performance metrics should you use?

Marketers who believe in testing and measuring performance use a metric called, cost per action (e.g. cost per sale, cost per lead, etc.). It is calculated as follows:

Total Budget Spent / Total Number of Actions Generated

The total budget spent figure should include the cost for traffic and the cost for the outsourced third party or in-house labor. The total number of actions generated figure includes the sales conversion rate:

(Visitors x Conversion rate = Number of Actions).

A target cost per action should be a specific dollar figure below your net profit (defined as, Revenue Product Costs) and your profit margin objective.

For instance, lets assume that your product sells for $97, your product costs $20 to develop, carry or deliver and your net profit objective is $25 - your ideal cost per action should fall below $52.

By following these three steps you will be able to:

Establish measurable performance metrics to determine success or failure of a new marketing channel without wasting big budget dollars.

Test new marketing channels to expand your reach and sales opportunity without relying on heresy about a particular unknown or questionable marketing channel from third parties.

Ensures that your marketing strategies are focused on your goal and that youre heading in the right direction.

Put these steps to use and youll be assured a more effective allocation of your budget and a greater return on your efforts. Through calculating performance metrics, youll be able to judge for yourself which marketing channels connect you to pools of eagerly awaiting buyers and not just volume of visitors.