Visitor Value is defined as the amount of money you make on
average per visitor to your website.
It is an important measure of your website's effectiveness
as a business tool for two reasons.
- If you don't measure how much money you are making per
visitor and manage that figure upwards then you are not
exploiting your website to the full. Given the importance
of your website in the online world this is a bit like
running a shop and not measuring your sales and footfall
numbers. You want to get as much from your visitors as you
can and to manage a figure you need to measure it.
- The other reason why you need to know your visitor
value is just as important. It relates to your ability to
buy web traffic using Google AdWords or other Pay Per Click
Suppose you've got a visitor value of £2.50. Would you be
interested in buying extra web traffic costing £0.80 per new
Clearly your answer is going to be "Yes". You would
reasonably expect to make £2.50 - £0.80, or £1.70 per extra
visitor. So you are unlikely to turn this offer down.
You can of course very easily buy this sort of website traffic
using Google AdWords, Yahoo and Microsoft.
But how do you know how much you can afford to pay if you
are not measuring your visitor value?
What if your competitor has a higher visitor value
Now suppose you can buy traffic but that it costs £2.60 a
visitor instead. At that price you wouldn't be interested in
buying it because on average for each visitor you got, you
would lose 10p. So you shouldn't do it.
But suppose your competitor had a visitor value of
They'd be able to buy in traffic for £2.60 and make a
profit. This means that on the big search engines, they'd
hoover up potential new business whereas you wouldn't be able
to afford to.
This gives your competitor another edge too:
When you buy in traffic from search engines using Pay Per
Click advertising, in simple terms, the more you are prepared
to pay for it, the more you'll get. This is because the more
you bid for traffic, the higher up the page your ads will
appear and in general higher ranking ads attract more clicks.
(The AdWords ranking algorithm doesn't operate quite as simply
as this but nonetheless this is a reasonable approximation of
how things work with Google.)
So a site with a big visitor value can afford to bid
aggressively for traffic. This means that its ads will be high
up on the page and so they'll get more traffic. The website
will convert this traffic into profits effectively because it
has a high visitor value.
Conversely, a site that has a low visitor value will not be
able to bid aggressively for traffic, will get fewer and fewer
clicks and so make less and less money.
Without knowing your visitor value you can't make an informed
judgement about how much you can afford to pay for clicks.
So what can we do to boost visitor value?
There are three standard techniques.
- Sell to more people when they land on your site by
increasing your overall conversion
- Sell more things to customers using upsell
- Sell additional products to them later on, a process
known as back end selling.
Lifetime value of new customers
Many businesses recognise and understand that the lifetime
value of a customer is what really matters. This is the amount
of money they expect to get from a new customer over the
lifetime of a business relationship.
Provided they have done enough analysis and are confident in
their forecasting, many businesses are prepared to spend very
aggressively to get new customers to the extent that they make
a significant loss on the first business contact because they
know that in time, they will recover all their marketing
costs and much more still by continuous back end
You've doubtless seen examples of this where magazines offer
you a free subscription for a period in order to get you to
subscribe on a paid-for basis later on. They invest marketing
money up front to provide you with free editions in the
expectation that you will continue to buy from them in the
If you can generate backend sales to your existing and
future customers you will significantly increase your visitor
value. This can put you in a very strong position when it comes
to buying in web traffic with Google AdWords because you can
bid more aggressively, rise up the ad ranks and get a lot more
profitable web traffic.