A reader asks:
How do I test the conversion rate with a new product using Google AdWords?
It depends on what the definition of "the" is. As in, what conversion rate are you talking about? In which market?
Here’s the deal: there’s no such thing as "a" conversion rate – just different people saying yes or no to your offer. When you test your offer in front of enough of those people, you get an average conversion rate: 2 out of 100 buy, or 5 out of 100, or 0.7 out of a 100, etc. What you really care about is, "To which groups of people can I profitably market?"
If you’re selling hot dog cookers, you’re not really interested in the conversion rate among vegetarians. If you sell cars, you’re not aiming for the tween market. Don’t place a Hummer ad in the Sierra Club magazine. Etc.
In mass media, you have to look at big markets: readers of the New York Times arts and leisure section;
In nich media, you can target tightly focused groups: bowlers, fly fishers, artists using Adobe Illustrator, etc.
In direct mail, you can dig deeper with lists and selects: bald sudoku enthusiasts with an annual income greater than $110,000 who live within ten miles of La Jolla and drive a convertible.
With AdWords, you can dig into the mind of your prospect by targeting specific keywords. You’ll learn, for example, that people who search for "steel girders" will buy your "Bridge Engineering For Dummies" at three times the rate of people searching for "steel cables." Each keyword represents a slice of the market with slightly (or significantly) different concerns, desires, fears, and triggers than other slices.
With AdWords, and a willingness to customize your sales process for different market segments, you can test multiple segments and stick with only the profitable ones. If any.
The process itself is simple:
- Choose keywords (or websites in the content network)
- Write ads that match those keywords or websites
- Send the traffic to landing pages that continue the conversation begun with the keywords/websites and ads
- Take your best shot at a sales funnel and count the sales
If you are close to breakeven, then you can almost certain become profitable quickly by testing and improving the whole process. If you get no interest (either in your ad or your offer), you can either completely retool the campaign, or cut your losses and find something else to promote.
One warning: don’t try this until you have conversion tracking set up (see Chapter 14 of AdWords For Dummies for a really clear description of how to set up and interpret and act on the conversion data).
One clarification: you’re not actually testing a new product, but a new sales process/product combination. Thinking about any element in isolation will lead to narrow thinking and mistakes.