Prioritizing your goals when you’re working on improving your website is extremely important. However, prioritizing based on an arbitrary sense of what’s most important (or what’s easiest to accomplish) doesn’t necessarily contribute to improving your revenue – the ultimate goal of any website optimization. In order to focus on goals that are more likely to generate money, it’s helpful to assign values to your goals, and prioritize based on those values. This makes it easier to focus on revenue-generating goals, and can help avoid bad optimization strategies or debates with designers, CEOs and other people involved in the process over the “next thing” to focus on.
Magnitude Context is a Good Starting Point
When you start the process of assigning dollar values to your goals, you don’t necessarily need accurate dollar values tied to each goal. Instead, assigning relative values to your goals can help you decide where to focus without getting bogged down by irrelevant data points.
Start by picking a median goal on your priority list, and assigning it an arbitrary amount. Then, estimate the value of other goals up or down from your median priority action.
For example, in the case of an e-commerce site, where the goals are product sales and lead generation, a relative value assignment might look like this:
- Product sale: $250
- Quote request: $100
- Whitepaper download: $10
- Blog comment: $2
- Social media activity: $1
When you start assigning relative values to things, you can see quite quickly which activities are more likely to earn you revenue, and which goals might be less valuable. You can then pull out this list in your next design debate, and ask: “Would we rather have a $250 product sale, or a $1 Retweet on Twitter?” It’s a quick and dirty way to see where real value lies, and also to evaluate how much you should be spending on each goal.
Estimating Real Goal-Contribution Values
Once you’ve got a starting point with your relative values and magnitude context, you can further refine your goal-contribution values to get closer to real numbers. However, there are many, many ways to do this, so you’ll have to avoid getting bogged down in a debate about which data is most useful, and track your chosen value consistently across the optimization process.
How do you decide your real goal-contribution values?
Using an e-commerce site for an example again, you might decide to use:
- Your average order value
- A split of new customer product purchases and repeat purchases
- Lifetime value of the customer
Which numbers you use depend on how granular you want to go with your data, and whether you’re optimizing for short-term performance and conversion, or whether you’re looking to boost the lifetime value of your customer acquisition process.
Optimize for Revenue-Producing Actions
Once you’ve assigned relative values or real goal-contribution values to your website optimization goals, it’s time to tackle the question of how to optimize your site. For example, once you’ve got the micro-conversion goals identified, and you can assign them a value – should you spend time optimizing for these goals?
There’s a long set of pros and cons to optimizing for micro-conversions. Many businesses choose to optimize for micro-conversions with the assumption that it will show them valid testing results faster – they’ll simply extrapolate the data once their tests have reached statistical significance to make a decision and complete the optimization process.
Unfortunately, this is a dangerous assumption. Your micro-conversion test results may very well correlate with conversion and revenue generation – but they might not. There are many examples where the first step of a funnel can dramatically change the completion of subsequent steps, which means your conversion assumptions might not be valid. To ensure you’re reaching your ultimate goal – boosting revenue – you should optimize for revenue-producing actions first; then micro-conversions, if you have the time and financial resources to extend your optimization program.