There's More to Tracking than Conversion

One of my coach­ing stu­dents recently asked me whether it’s bet­ter to offer a free trial or a $1 lim­ited time trial as an incen­tive to sign up for a paid newslet­ter subscription.

The answer involves the vital role of track­ing and test­ing through­out your entire sales funnel.

Gen­er­ally speak­ing, a free trial is likely to con­vert more vis­i­tors ini­tially, but the $1 trial may be the bet­ter choice over the long term. Such gen­er­al­iza­tions have lit­tle place in busi­ness. The only way to deter­mine the right answer for your busi­ness is to track and test the process from begin­ning to end.

It’s impor­tant to remem­ber that con­ver­sion rates are only half the equa­tion. What it comes down to is vis­i­tor value, not sim­ply what is bet­ter for short term sign-​​ups.

Before apply­ing the infor­ma­tion to the free trial vs. $1 trial ques­tion, let’s take at a hypo­thet­i­cal pay-​​per-​​click (PPC) cam­paign to illus­trate the con­cept of vis­i­tor value with sim­ple terms and calculations.

Say you spend $1,000 on a PPC cam­paign and gen­er­ate 10,000 vis­i­tors. Also, say your saleslet­ter con­verts at 1% and each sale is worth $50 to you. This means you generate:

• 100 sales (1% of 10,000 visitors).
• 100 x $50 each = $5,000 gross profits.
• $5,000 divided by 10,000 vis­i­tors means each vis­i­tor is worth $0.50.

In a sec­ond cam­paign you choose to spend more for bet­ter key­words. You dou­ble your cam­paign costs to $2,000.

This time, the bet­ter key­words gen­er­ate more tar­geted vis­i­tors, but you end up with less traf­fic and only gen­er­ate 4,000 visitors.

On the sur­face, it looks like the smaller cam­paign brought in a bet­ter return, but it goes fur­ther than that.

Because the traf­fic from the sec­ond cam­paign is more qual­i­fied, the con­ver­sion rate on your sales let­ter will increase — per­haps dou­ble or even triple. Let’s say 3% in this exam­ple. Now, let’s do the math again. You generate:

• 120 sales (3% of 4,000 vis­i­tors) at the same value of $50 per sale.
• 120 x $50 each = $6,000 gross profits.
• So, $6,000 divided by 4,000 vis­i­tors means each vis­i­tor is worth $1.50.

Once you’ve looked at the whole pic­ture rather than the con­ver­sion rate alone, the pic­ture changes. While you dou­bled your expenses in the sec­ond cam­paign, you tripled your vis­i­tor value and your over­all profits.

Since the vis­i­tors were more tar­geted and qual­i­fied it’s likely that these cus­tomers will stay longer, buy more and present less has­sles in terms of refunds, returns and complaints.

So the LIFETIME vis­i­tor value will increase sub­stan­tially, too.

Trans­lat­ing vis­i­tor value to the ques­tion of the free trial sub­scribers and $1 trial sub­scribers is a sim­i­lar process.

Take your track­ing beyond con­ver­sion rates and look at your entire fun­nel to deter­mine the more prof­itable sce­nario for your busi­ness. Are the free sub­scribers or $1 sub­scribers more likely to con­vert into full membership?

Another ele­ment of test­ing and track­ing through the whole process rather than focus­ing solely on con­ver­sion rates is that it will give you more infor­ma­tion to work with so you can improve stick­ing points through­out the sales cycle.

A more com­pre­hen­sive look at the process will show you exactly what is con­vert­ing, where you can improve, and where your bot­tle­necks are.

For exam­ple, if you have a typ­i­cal sales process with an opt-​​in page, fol­lowed by the saleslet­ter, and then the order page, as well as an autore­spon­der series for those who opt-​​in but don’t buy, you will learn:

• Which page is con­vert­ing (or not);
• Where peo­ple “stum­ble” or leave;
• What to improve and test vari­a­tions of.

You will learn all that by tracking:

• How many unique vis­i­tors opt-​​in.
• How many buy from the salesletter.
• How many buy from the order form.
• And how many buy from your autore­spon­der follow-​​ups.

Know­ing this can tell you where you ARE con­vert­ing, and iden­tify your biggest bottleneck.

For exam­ple, if you have 40% who opt-​​in, and 5% of those who opt-​​in click to the order form to buy, but only 1% buy, this tells you that your bot­tle­neck is your order form!

A per­son who doesn’t track may jump to the con­clu­sion that the less than 1% con­ver­sion indi­cates a saleslet­ter issue, where proper track­ing would reveal that the issue is with the order form.

With track­ing, you can clearly see that your opt-​​in and saleslet­ter copy are indeed work­ing, but for some rea­son, peo­ple are leav­ing once they hit the order form.

This is why it’s impor­tant to look beyond con­ver­sions and develop a prac­tice of track­ing the entire sales process.

Whether your ques­tion is whether a free trial or $1 trial is a bet­ter choice or you are won­der­ing whether a par­tic­u­lar bonus is a good fit for your tar­get mar­ket, you will find the answers through track­ing and test­ing the entire sales fun­nel — and not just sales.

When you focus on the big­ger pic­ture, you can eas­ily cal­cu­late over­all cus­tomer value and iden­tify weak links in your sales process.

About the Author

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