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How do you assess the value of a click?

I am occasionally asked why clicks are important to the search engines and if they can be evaluated, as part of a Internet marketing strategy. They can, in my opinion but the way we value a click needs to be explained. Although the answer may sound a bit confusing at first, I will try to help you understand how each click through to your site represents a part of a potential sale.

Ranking highly with the search engines increases your chances of getting those coveted clicks and each time a searcher (or prospective customer) lands on your website, you have a valuable opportunity to generate a sale from that visitor.

How to calculate the value of a click? 

One of the issues I see in businesses is how to measure the results of marketing activity. This is particularly relevant when we come to the subject of Social Media.

I often hear the question “Social Media can’t be measured can it?”

Well, in my eyes it can and this is done by evaluating the ‘click through’ that we get from links from our blog posts or other published content. These clicks are invaluable, because they each provide us with an opportunity to grow our business.

The main issue I see after we help clients generate literally hundreds of clicks, is that they are not able to harness this valuable web traffic.

Also, depending on where you publish your content, each click can help you gain a better understanding of who your web visitors are and in what they are interested. You can calculate how much traffic you will need to generate to reach your predetermined target of new business. While the exact value of each click differs based on the actions the “clicker” takes upon arriving at your site, it is sometimes possible to calculate the average value of each click by doing a bit of analytical maths after you’ve received more than a few thousand visitors.

Below I’ll show you a calculation you can use to determine the approximate value of your clicks, based on the unique results of your own campaign:

    • Calculate Conversion Rate

What percentage of the people who click through to your site are actually performing a desired action (i.e. – buying a product, clicking an ad, opting into a newsletter, etc.)?

Let’s say one of your landing pages gets 1000 visitors, and out of that group, 50 are converted into customers. That would mean you are working at a 5% conversion rate.

    • Calculate the Revenue Earned from Converted Visitors

Now that you have a rough estimate of a conversion rate, you’ll need to calculate the combined cash value of all converted visitors. This is easier if you’re only selling one product or service at a fixed price.

Let’s say for example that the 50 visitors who were converted ended up paying your company £20 each, that would mean that the total value of all your converted visitors would be £1000 (50 converted visitors multiplied by £20 each = £1000).

    • Divide Number of Visitors by the Combined Value of the Converted Visitors

Finally, now that you know exactly how much revenue your converted visitors generated, you can then divide that number into the total number of visitors it took to earn that amount. This enables you to arrive at your estimated value per click.

So, in the example above, out of 1000 clicks 50 of the visitors spent £20 each, giving you a total revenue of £1000 out of 1000 clicks, which would give you an average value of £1 per click. Of course, this is an overly simplified scenario for example’s sake, but it should help you understand the basic maths involved.

If you’re selling more than one type of product, or a service that ranges greatly in price, the above calculation will not be nearly as useful. In such situations, I can honestly say it is nearly impossible to judge the value of a click, as one click might bring you a new long-term client, while another might generate nothing more than a nominal purchase.

As such, the value of a click largely depends on the unique actions of the person doing the ‘clicking.’

In the end, I suggest you focus more on conditioning and converting visitors to your site than in spending time evaluating each click. The key is to get them to your site with clicks from the first page of Google and from there you have the opportunity to convert them.

This is why I feel that clicks are invaluable. Each click represents a potential buyer and that is something that is worth its weight in gold.

David Lomas

Call me now on 08450 519374 for a free consultation on improving your website performance, social media measurement or your prospect conversion rate.

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