by Paul Needham

What is the efficiency of your website? How do you know when things are improving or getting worse? How can you decide where to concentrate your marketing efforts?

In the early days of Internet commerce, many entrepreneurs seeking online success thought that it was sufficient to build a nice looking website. All you needed to do was to learn a little HTML, put up a few pages, and wait for the sales orders to come streaming in.

Well, that is a bit like saying that to go to the moon, all you have to do is build a rocket, buy some Tang, pack your lunch in a toothpaste tube, and take off. It just ain't that simple.

There are many different models, or frameworks, that you can use to understand the Internet economy, and to develop an appropriate business strategy. One of the models which I use is the five stage conversion process. I find it helpful to analyze our "website efficiency", and to know where to invest more on our marketing efforts.

When you ask most people about their objectives for their website, they typically tell you one thing: to maximize sales. It seems that many people still have the "build it and they will come" attitude. The goal of marketing, for these people, is simply to convert a potential buyer into an actual buyer.

However, "conversion" is more complex than that. Research shows that it is not a single step process. In fact, for online businesses, it is helpful to think of five separate questions.

More formally, we can describe the conversion process in terms of five stages, and the associated objective at each stage.

Stage..............................Conversion Objective
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Awareness.......................surfers --> aware surfers
Attraction.........................aware surfers --> hits
Contact............................hits --> visitors
Closure............................visitors --> purchasers
Retention.........................purchasers --> repurchasers

At each stage, it is possible to measure your efficiency at achieving the conversion objective. Below is a description of each stage, and an explanation of how to calculate the relevant type of conversion efficiency.

The first objective is obviously to build awareness of your website; to make your website known to potential visitors. At this stage, you want to effectively target your market, advertising in places where you expect to reach the most appropriate audience.

Awareness efficiency (AWe) refers to your effectiveness at making your target audience aware of your website. Awareness efficiency can be calculated quite easily: it is equal to the number of aware surfers divided by total number in your target audience.

Once you have built awareness of the existence of your website, the next objective is to attract them through the front door. It is important to distinguish between awareness and attraction. For instance, I am aware that The Gap has a website, but I have never visited it. Similarly, a certain segment of your target audience may be aware that your website exists, but have not yet visited it. Before they can visit, they need be aware of its existence.

Attraction efficiency (ATTe) refers to your effectiveness at converting an aware person into a "hit" at your website. The attraction efficiency of your website is the ratio of number of hits to the number of aware surfers.

Even once you have attracted a person to your website, your job is still not done. Many first time visitors will only stay a few seconds before hitting the "back" button on their browser. There are a number of reasons why it may be difficult to keep the surfer's attention:

• if your web pages load too slowly, or
• if it is unattractive, or
• if they discover that the website is not what they expected, or
• if they were busy doing something else, so they don't have time to make a thorough visit.

For this reason, a "hit" is not the same as a "visit".

Contact efficiency (CONe) refers to the ability of your website to turn a fleeting "hit" into a meaningful visit. A "meaningful visit" might be interpreted to mean "visit for more than 10 minutes", or "visit more than 5 pages", or "read the contents of a particular page". The point is that you want people to become active visitors, interested and engaged with your website. How *you* define "meaningful visit" is a question that depends on the objectives of your business.

However you decide to define "meaningful visit", the contact efficiency (CONe) of your website can be measured by taking the ratio of visitors to hits.

Ultimately, you want the visitor to take some desired action. In many cases, that means making a purchase, however, it may be subscribing to your newsletter, entering a contest, or downloading your software. For simplicity, I will refer to this desired action as a "purchase".

Closure efficiency (CLOe) refers to your website's ability to convert a visitor into a purchaser. It can be calculated by dividing the number of purchasers by the total number of visitors.

Perhaps even more important than closure is retention, which is your ability to convert a purchaser into a repeat purchaser. Depending on the nature of your products or service, repurchases may actually represent the lion's share of your revenue.

Retention efficiency (RETe) is calculated as the ratio of purchasers to repeat purchasers.

The overall efficiency of your website is a function of each type of conversion efficiency described above. Ideally, you would like to maximize all of the five: awareness, attraction, contact, conversion, and retention efficiency.

Although each is important, you will probably find that it is rational to focus on one or two in particular.

The first step is to begin measuring each of the conversion efficiency indicators for your website. This will help you to know which areas need improvement, and where your marketing efforts will be most effective.

In upcoming articles, I will discuss each of the five stages in more detail, and provide some tips to maximize efficiency at each stage.

Paul Needham -- paul@linkmedia.com -- Co-Publisher of Active Internet Marketing. http://www.inetexchange.com/inet-mailer.htm -- "Business Intelligence for Successful On-line Marketers" -- Subscribe today to the free A.I.M Ezine. subscribe-Inet-Mailer@send.memail.com

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