In our previous release we made sure that we don?t do any of
5 serious conversion mistakes in Adult business. Now we can start the primary optimization. And initially we have to define how to track down the efficiency and how to evaluate current conditions of your activities.
Ratio is not the major parameter in optimization. It is very important to understand that such a fashionable movement as conversion optimization is only particular case of a very old discipline ? business optimization. And from now on we will be looking at it from this angle only. In order to illustrate this difference, let?s assume a website with subscription price of $50 and conversion of 1:1000. Hence by buying 1000 visitors for this website we receive $50. So what if you decided to improve the conversion for this website and used the most effective method out of all ? price decrease, assuming to 0. So after that the conversion has raised to 1:5. From one side the mission is accomplished, however the business has lost a lot from such optimization. Likewise we cannot track down the success of the website exclusively according to its conversion.
Income? You can try. Let?s slightly lower down the price in order to increase the rate and not to lose income. Now our subscription price is only $25. And let?s assume that conversion and price are in direct and equal dependency (usually it is not like that). Now ratio is not so impressive, but we have gained our $50. Is the optimization successful? We have improved the conversion and saved the income. However our operational expenses have increased, because now we have to deliver service not to one client, but two. Second member consumes additional amount of traffic, additional account in CRM causes more work for support services etc. Likewise your optimization has failed.
Net profit? Most probably. Let?s use the same method as with price. We cannot make it too low, because the website content will stop being profitable. However too high price will scare away the users and will lower down the conversion. Our task is to find the price with maximum profitability, when the minimum amount of users will be bringing maximum income. Let?s try to do it with the example of our website. Earlier we were taking direct and equal dependency of conversion and price as our baseline, but in real world it is not equal. I.e. by decreasing the price two times you can increase the conversion four times.
Psst...We carry out primary optimization of paysites in order to get reviews for first three clients applied.
In this case the price of $25 will result in conversion of 1 to 250 and profitability of $100. It results in 100% growth and it is already an awesome result. So what if you decrease the price 5 times, which will cause the conversion to become 1:100. Income will remain the same, but profit will lower down. Likewise the idea price for this website is somewhere between $10 and $25. Besides that the decrease in price is not the only case. If you increase the subscription price for our website ? the rate will fall down. By how much? Probably everything is not as critical as you might think. In case if the double increase of price causes the rate to lower down by 50%, then the game is worth the candle. We receive $50 for 100 users, excluding the cost savings.
Lots of owners set the price ?same as everyone else?s? or according to analysts. But it may be of use to check how much the members are ready to pay for their favorite product.
Don?t forget about rebills. Squeeze everything out of the website in order to increase the short-term profit ? is not the best idea. You have to consider as well such cases, when increase of price or other activities cause the profit increase, but decrease the average time of user?s life. If the price of $100 decreases the life 3 times, then earnings growth will be negative and such optimization is harmful. Hereby it is of high importance to track down not simply the profit level, but the level of quarterly earnings. It may sound as a phrase from last century or as manifest, but this is the very essence of CRO.
Hence, before initiating any optimization it is required to check the readings of traffic, conversion, income and profit. All these readings are required for dynamics, because static data may turn out to be insufficient. For example, new competitor causes your rate to start decreasing. And if in previous month you had 1:675, then the conversion increase up to 1:650 does not seem so meaningful already. But let?s look at the same situation in dynamics ? April 1:300, May 1:300, June 1:300, July 1:450, August 1:675. We started the optimization in August and received 1:650 by September, while results projection tells us that conversion falls down by 50% every month. This rate is1:1000 by September. But our activities have stopped the decrease and reversed its movement. It caused the conversion increase by 30%, while in case of static view it is 3.7% only. The same principle works for reverse direction as well ? if a website gains conversion and profit, for example because of higher quality content, then you have to consider these results as well.
Previously there was one more variable that we put outside the brackets ?
optimization cost. The same hypothetical website can bring $10k per month. Let?s assume that optimization conversion has increased the annual gain by 50%, i.e. the website started earning $15k, which is $60k per year. The optimization cost is $10k. Investment profitability is 500% and it is for the first year only. But if the profit has increased by 10% only, then in this case we earn only $2k per year. And you can hardly consider it as a meaningful statistical result. It is very risk to take long time periods, because this kind of current situation can cause your activities to become meaningless. In case if after one year and half there appears a niche tube with your content, then rivalry with it can cause not only loss of conversion, but also bankruptcy. So we recommend to carry out primary optimization in the beginning and then invest the borrowed funds as they appear. It can lower the risk and decrease the amount of mistakes.
Now you can start the optimization or simply
contact us...