It stands to reason, then, that if we can find a way to apply the magic of compounding to business growth, we\u2019ll tap into that same wonder-invoking power.<\/p>\n\n\n\n
Do you agree?<\/p>\n\n\n\n
Our aim here is to show you exactly how to do that. Rather than talk about it, though, we\u2019ll show you. All it takes is a calculator. And we happen to have one right here: Conversion Rate Impact Calculator.<\/p>\n\n\n\n
Take a quick look at the tool. Leave that page open so you can follow along, then join us back here. We\u2019ll wait.<\/p>\n\n\n\n
Three variables that can make a huge difference in your return on investment<\/h2>\n\n\n\n
We said this method is mathematical and that it can deliver results akin to those achieved by those who understand the principle of compound interest.<\/p>\n\n\n\n
Let\u2019s begin there.<\/p>\n\n\n\n
The phenomenon of compounding is likened to the seven wonders of the world because it is both beautiful and immense.<\/p>\n\n\nCompounding interest is likened to the seven wonders of the world because it is both beautiful and immense. <\/a><\/span>Share on X<\/a><\/span>\n\n\n\n Consider the mind-blowing question: Would you rather I gave you a million dollars today, or a penny today \u2013 but the penny and its offspring would double in value every day for a month?<\/p>\n\n\n\n Most people, offhand, would much prefer the million bucks. Do the math, though, and you\u2019ll find that a penny doubled daily for 30 days ends up being worth over five million dollars!<\/p>\n\n\n\n How does that happen? It\u2019s the miracle of compounding at work. It\u2019s as if you earn 100 percent interest every day.<\/p>\n\n\n\n Here\u2019s how it stacks up:<\/p>\n\n\n\n Day 1: $.01 \u201cSure,\u201d you may say, \u201cthat\u2019s fine if I could figure out how to earn 100% interest daily. Fat chance of that happening, though.\u201d<\/p>\n\n\n\n But what if your return was lower, but the time was longer? Would you end up with the same sort of progression.<\/p>\n\n\n\n Could you wait a year for that five million? How about three or five or ten years?<\/p>\n\n\n\n There\u2019s no doubt your starting situation is important, but most of what will happen in your business over the next few years is up to what you do next.<\/p>\n\n\n\n Here are the three variables we\u2019ll consider. You\u2019ll note they are the fill-in fields on the calculator.<\/p>\n\n\n\n Note on the calculator that the column on the left indicates current data, and the column on the right returns changes occurring due to increased conversion rate.<\/p>\n\n\n\n We\u2019ll briefly define our terms to make sure we\u2019re on the same page before we begin experimenting to see what happens as we make changes to those variables.<\/p>\n\n\n\n Conversion rate: There are many conversion points you can move and measure in ecommerce. Click-through-rate, for instance, is a type of conversion: the prospect sees your link, wants to know more, and clicks the link.<\/p>\n\n\n\n For our purposes here, though, we\u2019re talking about the most sought-after conversion of all: the visitor becomes a buyer. Here\u2019s the formula we use for that conversion:<\/p>\n\n\n\n Conversion Rate Percentage = Number of Sales \u00f7 Number of Unique Site Visitors X 100<\/strong><\/p>\n\n\n\n Tracking the metrics can get quite complicated quickly. That\u2019s why many businesses fear to tread here.<\/p>\n\n\n\n In general, don\u2019t worry about what happens if someone \u2018clears their browser cache\u2019 and deletes cookies. We don\u2019t need an exact number. A good approximation is fine.<\/p>\n\n\n\n One thing you definitely want to do is adjust your analytics to ignore visits from robots, spiders, crawlers<\/a>, and any other name you want to call the mechanized visitors that visit your site regularly to pull or scrape data.<\/p>\n\n\n\n Average monthly traffic: This metric is calculated by dividing the total unique visits (minus robots and other filtered traffic) for one year by 12. Of course, you could also divide three months of visits by three.<\/p>\n\n\n\n Here, again, we\u2019re not looking for an exact head count. We just need to get as close as we can. The longer period we use, and the better job we do of filtering our analytics, the closer this number will be to the money.<\/p>\n\n\n\n Average order value: Total value of all orders divided by the total number of orders gives you average order value (AOV). It\u2019s simple arithmetic, but it\u2019s a powerful figure many companies fail to monitor. Small upticks in AOV can make big changes in your total sales. We\u2019ll look at that in the next section.<\/p>\n\n\n\n There\u2019s just one thing to remember: all of these metrics should be configured for the same time period. You can dial way out to an annual or even a 10-year or more report\u2026 or you can dial down close to look at how you fared yesterday (or even how things went over the past hour).<\/p>\n\n\n\n Once you get the hang of monitoring and recording this data, you won\u2019t want to stop. And you don\u2019t have to. If there\u2019s one thing we preach at The Good, it\u2019s \u201calways be measuring and always be testing.\u201d<\/p>\n\n\n\n We\u2019re going to switch back over to the calculator now and run some numbers to observe what happens as the variables begin to move. Once again, the left column is where you enter your current data. In the right column, there\u2019s only one variable \u2013 conversion rate improvement. Plugging your goal in there will automatically adjust the other figures.<\/p>\n\n\n\n By the way, you might wonder HOW you can move your conversion rate up the scale. We won\u2019t discuss that in this article, but we will provide links to resources at the end of this guide. To get started, though, there\u2019s no better way we know of than to get your free Stuck Score\u2122 results. That\u2019s where the \u201cScore Your Site\u201d link at the top right of the calculator page will take you. It\u2019s a real eye-opener for many people. You\u2019ll get benchmarked results from five key conversion areas\u2026 and you can\u2019t beat the (free) price.<\/p>\n\n\n\n There\u2019s one more thing you\u2019ll want to note. At the bottom of the calculator, you\u2019ll see \u201cROI from Conversion Rate Optimization Services.\u201d Let\u2019s put it this way: if I promised to give you $100 for every $10 you gave me, how many ten-dollar bills would you let go of? You\u2019d be a fool not to go to the bank and take out a loan\u2026 right? That\u2019s the principle here, and you\u2019ll be amazed at the numbers you\u2019re about ready to see appear there.<\/p>\n\n\n\n Here we go.<\/p>\n\n\n\n First, let\u2019s establish the beginning numbers. This will be our snapshot of the business as it stands, before we begin making changes to affect the three golden variables above.<\/p>\n\n\n\n Let\u2019s say you and I own an ecommerce website. We stumble across this guide and figure, \u201cHey, we want to be zillionaires and retire early. Why don\u2019t we give this Einstein plan a try?\u201d (By the way, we could be selling bowling balls or baby carriages \u2013 it really doesn\u2019t matter to the math. These numbers are like gravity; they affect every business exactly the same.)<\/p>\n\n\n\n We tally up the data and arrive at the following for our online business:<\/p>\n\n\n\n After we plug those numbers in, the calculator tells us we\u2019re converting 1,440 visitors into buyers every month. Our current monthly revenue from our website is $136,800. Not bad, right? Wouldn\u2019t it be nice to earn over 100 grand every month?<\/p>\n\n\n\n You know the problem, of course: that\u2019s gross profit. Depending on overhead and cost of goods sold, we may be living on beans and potatoes at home.<\/p>\n\n\n\n We decide to score our site to discover stuck points\u2122. Afterwards, we talk with the conversion rate specialists at The Good, and we discover something intriguing. It turns out that conversion rate is one of the simplest ways to boost the bottom line. Typically, it\u2019s simpler and easier to double your conversion rate than to double your AOV or amount of traffic.<\/p>\n\n\n\n So, we\u2019ll begin by seeing what will happen if we work with The Good to move that 3% conversion rate (CR) up to 6%. We want to leave the \u2018average zone\u2019 and move towards excellence. This may seem extreme, but doubling your conversion rate is entirely possible. In our work with Snow Peak, we were able to help push that company\u2019s conversion rate up by 108 percent.<\/p>\n\n\n\n Here\u2019s how the numbers stack out now:<\/p>\n\n\n\n By moving the conversion rate up just three more percent, we doubled our gross profit! Not bad for a few months work. (Yes, those three ticks in CR amounted to doubling that metric. It\u2019s still remarkable, though, that one small move brought about a pretty sizable jump in revenue).<\/p>\n\n\n\n Here\u2019s a screenshot of the calculator with our beginning numbers and first adjustment project reflected:<\/p>\n\n\n\n We needed only to focus on one of the three variables to double our sales volume. That felt really good, but was it cost-effective?<\/p>\n\n\n\n If you\u2019ll plug those numbers into the calculator, then look below the calculator fields to \u201cROI from Conversion Rate Optimization Services,\u201d you\u2019ll see that even if the fee required to make that jump happen was a cool $60K, we\u2019re still going to realize a 26:1 return on our money after the first year and a whopping 81:1 return over three years.<\/p>\n\n\n\n Not bad. Not bad at all.<\/p>\n\n\n\n Let\u2019s keep going.<\/p>\n\n\n\n We like what we\u2019ve seen thus far, so we ask The Good if anything can be done about traffic. Would it be possible to double that too?<\/p>\n\n\n\n It turns out that our particular situation \u2013 current volume of traffic, current lack of a concerted list-building effort, current website optimization problems that are killing us on the SERP (search engine results page) for organic traffic, our poor performance driving traffic from social media \u2013 all of that can be tweaked favourably.<\/p>\n\n\n\n We turn to the site scoring results The Good ran for us at the beginning and begin to work on stuck points. After six months of work, we sit over our morning coffee checking out last month\u2019s stats, and we discover our traffic broke 100,000 for the first time ever!<\/p>\n\n\n\n What a thrill!<\/p>\n\n\n\n We rush to check how that has affected the rest of the trifecta of metrics we\u2019re tracking. Conversion rate is steady at 6 percent. Our AOV remains unchanged at $95. But our monthly revenue is now $570,000 dollars! That\u2019s about 317 percent better than our starting point.<\/p>\n\n\n\n Wow.<\/p>\n\n\n\n Not only that, but our ROI over three years shows a 170:1 advantage. For every dollar we invested in conversion optimization, we\u2019re getting handed back $170. Now, that\u2019s a deal we\u2019ll take every hour of every day\u2026 no problem.<\/p>\n\n\n\n Here\u2019s a screenshot (below) of the new results:<\/p>\n\n\n\n What do you think\u2026 would we stop there?<\/p>\n\n\n\n Heck no. We now turn our attention to average order value. Is there anything we can do about that? Our team at The Good points to the results of the lifestyle brand, Fayettechill.<\/p>\n\n\n\n Management of that company came to The Good seeking an outside perspective. They were already doing well, but wanted to do better.<\/p>\n\n\n\n Consequently, The Good\u2019s Conversion Growth Program<\/a>\u2122 helped Fayettechill grow AOV by 17 percent. And that\u2019s for a company that already had a strong presence and many loyal followers.<\/p>\n\n\n\n We know we have plenty of room to grow \u2013 the site score pointed that out \u2013 so we dive in again to see what happens with the numbers.<\/p>\n\n\n\n When the smoke clears, our average order value is up by a solid 30 percent. The AOV is now $123.50, and our monthly sales are pushing three-quarters of a million dollars.<\/p>\n\n\n\n Are we happy campers, or what?<\/p>\n\n\n\n Checking the three-year projection, we see a net revenue increase of over $13 million and a 221:1 return our investment in conversion optimization.<\/p>\n\n\n\n The new figures are shown below:<\/p>\n\n\n\n With a little help from The Good, we\u2019ve grown our business from $136,800 to $741,000 in monthly online revenue. Our annual sales are now hitting almost $8.9 million.<\/p>\n\n\n\n What\u2019s next?<\/p>\n\n\n\n We love the work we do with clients. There\u2019s no feeling quite like knowing you\u2019ve helped a business go from stuck in a rut to out there competing with the best. We get to see furrowed brows turn to big smiles\u2026 and we get to see that on a regular basis.<\/p>\n\n\n\n But here\u2019s the really cool part of conversion rate optimization: It\u2019s never ending. If you can push your conversion rate up by three percentage points, what\u2019s to stop you from going for one more? We see it happen all the time.<\/p>\n\n\n\n If you can double the number of unique visitors to your website, why not double your traffic again? And why not dig in and find ways to make sure those visitors are pre-qualified prospects?<\/p>\n\n\n\n The sky is definitely the limit when it comes to what you can do to keep moving the ball and pushing for more and more success.<\/p>\n\n\n\n It feels great.<\/p>\n\n\n\n How can that happen for you?<\/p>\n\n\n\n It can begin by getting your complimentary site score<\/a>.<\/p>\n\n\n\n Where will you be this time next year if you don\u2019t? Compare that to where you could be this time next year if you do.<\/p>\n\n\n\n Done right, conversion optimization isn\u2019t trading dollars for dollars. It\u2019s trading dollars for hundreds of dollars.<\/p>\n\n\n\n That\u2019s a tough transaction to beat.<\/p>\n\n\n\n Recommended Resources<\/p>\n\n\n\n Let’s say your executives have tasked you with growing your sales online. What do you do next? What is your game plan? What if I showed you an almost certain path to increasing your online sales but the only catch is that you\u2019d have be patient? The truth is we don\u2019t have any get-rich-quick schemes for you here. But we do have a get rich steadily suggestion \u2013 one we\u2019ve seen work over and over again. Care to find out how to multiply the profits from your online business without selling your soul to financiers or working yourself to an…<\/p>\n","category_list_v2":"","author_info_v2":{"name":"David Hoos","url":"https:\/\/thegood.com\/author\/davidhoos\/"},"comments_num_v2":"0 comments","yoast_head":"\n
Day 2: $.02
Day 3: $.04
Day 4: $.08
Day 5: $.16
Day 6: $.32
Day 7: $.64
Day 8: $1.28
Day 9: $2.56
Day 10: $5.12
Day 11: $10.24
Day 12: $20.48
Day 13: $40.96
Day 14: $81.92
Day 15: $163.84
Day 16: $327.68
Day 17: $655.36
Day 18: $1,310.72
Day 19: $2,621.44
Day 20: $5,242.88
Day 21: $10,485.76
Day 22: $20,971.52
Day 23: $41,943.04
Day 24: $83,886.08
Day 25: $167,772.16
Day 26: $335,544.32
Day 27: $671,088.64
Day 28: $1,342,177.28
Day 29: $2,684,354.56
Day 30: $5,368,709.12<\/p>\n\n\n\nDefinitions of the three critical variables<\/h2>\n\n\n\n
Let the magic show begin<\/h2>\n\n\n\n
![\"\"](\"https:\/\/thegood.com\/wp-content\/uploads\/ecommerce-sales-2.png\")
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<\/figure><\/div>\n\n\n\nThe moral of the story \u2013 if you can do it once, you can do it again<\/h2>\n\n\n\n