How to determine the monetary value of non-ecommerce conversions

When conversion is a product order, it is easy to determine its value. Whatever is the price of the product, is the value of the conversion.

For example if price of the product is £500 then value of your conversion is £500. But

how you will calculate the value of conversions which are not orders but something like leads, downloads, newsletters signups, phone calls etc?

There are many websites on the web which don’t have any macro conversion (like placing an order) but only lot of micro conversions (like downloading a brochure, watching a video, request for follow up etc).

These are often the websites which either sell very high priced items like properties, cars, yacht etc or sell consulting services.

Since people generally don’t buy such items online, you won’t find shopping cart set up on such websites.

If you are doing marketing of a non-ecommerce website then how you will report the value you have added to the business bottomline through SEO, PPC, Social media etc?

This is what many marketers do when it comes to reporting for non-ecommerce websites:

Marketer: we have increased the website traffic by 200%, We have built 100k backlinks, We have improved site engagement and video viewership, We……

Boss: You don’t fool me. You do lot of talking. ……I haven”t seen anything coming from you. You are fired.

Suddenly all the metrics we were so proud of, start collapsing like a house of cards in Lord Sugar’s boardroom.

What went wrong here?

Well, the marketer failed to convince, how his marketing efforts are impacting the business bottomline in monetary terms.

What is the impact of increasing the traffic by X in monetary terms?

What is the impact of improving the site engagement in monetary terms?

What is the impact of increasing the video viewership by X in monetary terms?

What is the impact of increasing the Facebook fan base by X in monetary terms?

Businesses want to hear this. Business Tycoons like ‘Lord Sugar’ want to hear this. This is what that really matters to them. That is why they are big businesses and that is why they are run by business tycoons.

Businesses measure success in monetary terms.

If you don’t tie a monetary value to your conversions then you may have hard time convincing senior management, why they should not hire someone else.

Businesses understand the language of £££…$$$$… more than anything else. So speak in their language.

Senior management may not have the time to go through your ranking reports, link building reports or other reports. But they are definitely interested in one thing and that is how your marketing activities are impacting the bottomline and whether they should continue with you.

Case Study – Meridien Modena

Let us understand the calculations involved in determining monetary value of non-ecommerce goals through a case study.

Meridien Modena sells pre owned cars in UK.  I picked up this company because one of their showrooms which sell Ferraris is close to my house and I am simply fascinated by the cars they sell.

Since people don’t buy a car without a test drive, without looking and physically touching it, you won’t find any ‘order now’ button on this website or such type of websites.

This website has no macro conversion as such but has got lot of micro conversions like:

  1. Viewing a vehicle detail
  2. Printing out the specifications/details of a car
  3. Filling out a contact form
  4. Making a call

Now how you will tie monetary value to these micro conversions?

Let us determine the monetary value of ‘printing out the details of a car’:

Step-1: Track the number of people who print out the details of a car each month.
You can track such people through event tracking in Google Analytics.  Let us suppose 500 people took print outs in the last one month.

Step-2:  Track the number of people who showed up at one of the car showroom with the printouts.
Let us call the people who showed up with a print out as ‘Clients X’. You can track ‘client X’ by calling and asking the car dealer of each showroom. Let us suppose 100 people (of client X type) showed up at various car showrooms in a month.

Step-3: Track all the ‘clients X’ who made a purchase and also track the revenue generated as a result of such purchases.  Again you can get these numbers through car dealers.  Let us suppose 25 people made a purchase and the net sale was of £1.5 million.

Step-4: Ask your car dealers how many people on an average who showed up at their showroom eventually make a purchase and what the average value of a purchase is.

Here you are determining the conversion rate of your car dealers and the average order value.  You can’t get such type of insight through any web analytics tool.

Let us suppose that one person out of 10 who showed up at a showroom make a purchase on an average.  Let us suppose that the average value of a purchase is £20000

Step-5: Calculate the monetary value added by a person who showed up at a car showroom:

If 1 person out of 10 who showed up a car showroom makes a purchase on an average and the average purchase value is £20000 then:

Monetary value added by a person who showed up at a car showroom = £20000 * (1/10) = £2000

100 people showed up at various car showrooms with a printout in a month. Out of these 100 people 25 people made a purchase and generated a net sale of £1.5 million. The other 75 people didn’t make a purchase but they still showed up at showroom.  So they are still adding value to the business bottomline. The monetary value added to the business bottomline by these 75 people is:

75 * £2000 = £150000

So the total monetary value added to the business by 100 people

= £150000 + £1.5 million = £1.65 million

Step-6: Calculate the average value of ‘printing out the details of a car’

Average value of ‘printing out the details of a car’ = Revenue generated by ‘Clients X’ /number of print outs

= £1.65 million /500 = £3300

So the monetary value of ‘printing out the details of a car’ from the website = £3300

Who would have ever though that a print out can be worth that much?

You can add this value as Goal value in your Google Analytics profile and show it to your client along with the conversion volumes.

Similarly you need to find and report the monetary value of:

  1. Viewing a vehicle detail
  2. Filling out a contact form
  3. Making a call

Needless to say, it is not very easy to calculate the monetary value of non-ecommerce conversions.

But that’s the way it is for you esp. if you are into real estate or other very high priced items market where macro conversions don’t happen on the website but in the offline world.

Pro Tip

Never assign monetary value to ecommerce goals like ‘orders’.  If you do that then you will inflate the revenue metrics. 

Always tie a monetary value to whatever you report otherwise don’t report esp if you are reporting to senior management in a very big company.

Reporting visits, number of new rankings acquired, site engagement, facebook followers, twitter followers etc are all meaningless unless they don’t show the impact on the business bottomline in monetary terms.

 

 

Do you know the difference between Digital Analytics and Google Analytics?


99.99% of course creators themselves don’t know the difference between Digital analytics, Google Analytics (GA) and Google Tag Manager (GTM).

So they are teaching GA and GTM in the name of teaching Digital analytics.

They just copy each other. Monkey see, monkey do.

But Digital analytics is not about GA, GTM.

It is about analyzing and interpreting data, setting up goals, strategies and KPIs.

It’s about creating strategic roadmap for your business.


Digital Analytics is the core skill. Google Analytics is just a tool used to implement ‘Digital Analytics’.

You can also implement ‘Digital analytics’ via other tools like ‘adobe analytics’, ‘kissmetrics’ etc.

Using Google Analytics without the good understanding of ‘Digital analytics’ is like driving around in a car, in a big city without understanding the traffic rules and road signs.

You are either likely to end up somewhere other than your destination or you get involved in an accident.


You learn data analysis and interpretation from Digital analytics and not from Google Analytics.

The direction in which your analysis will move, will determine the direction in which your marketing campaigns and eventually your company will move to get the highest possible return on investment.

You get that direction from ‘Digital analytics’ and not from ‘Google Analytics’.


You learn to set up KPIs, strategies and measurement framework for your business from ‘Digital analytics’ and not from ‘Google Analytics’.

So if you are taking a course only on 'Google Analytics’, you are learning to use one of the tools of ‘Digital analytics’. You are not learning the ‘Digital analytics’ itself.

Since any person can learn to use Google Analytics in couple of weeks, you do no get any competitive advantage in the marketplace just by knowing GA.

You need to know lot more than GA in order to work in digital analytics and marketing field.


So what I have done, if you are interested, is I have put together a completely free training that will teach you exactly how I have been able to leverage digital analytics to generate floods of news sales and customers and how you can literally copy what I have done to get similar results.

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My best selling books on Digital Analytics and Conversion Optimization

Maths and Stats for Web Analytics and Conversion Optimization
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Master the Essentials of Email Marketing Analytics
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Himanshu Sharma

Digital Marketing Consultant and Founder of Optimizesmart.com

Himanshu helps business owners and marketing professionals in generating more sales and ROI by fixing their website tracking issues, helping them understand their true customers purchase journey and helping them determine the most effective marketing channels for investment.

He has over 12 years experience in digital analytics and digital marketing.

He was nominated for the Digital Analytics Association's Awards for Excellence.

The Digital Analytics Association is a world renowned not-for-profit association which helps organisations overcome the challenges of data acquisition and application.

He is the author of four best-selling books on analytics and conversion optimization:

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