Since I’ve been talking about my conversion rates in my posts about my affiliate earnings, I thought I should explain how to calculate them correctly.
Generally speaking, a conversion rate is the corelation between the overall number of clicks on your affiliate link and the number of sales that happen. Some affiliate programs will provide you with the overall conversion rate for your account on your home page as you log into your affiliate control panel - but this one is just good for satisfying your curiosity and maybe for the affiliate program itself to estimate the overall performance of all their affiliates.
What’s wrong with this overall conversion rate for you as an affiliate promoting particular products on particular sites is that it doesn’t give you any idea of how well each of your sites performs and what and where needs to be improved.
The conversion rates that are really useful for you are:
- conversion rates for particular products you promote
- over all the time you’re working with the product
- monthly conversion rates compared
- conversion rates by site - if you have several sites promoting the same product (you need to use tracking codes in most programs to do this)
- conversion rates by banner used - to calculate these, you will need to set up separate tracking codes for each banner you use - I mean to do a tutorial on setting up tracking codes.
Calculating the conversion rates for a product over all the time you’re promoting it will let you see how much traffic you need to get at average to make a desired number of sales. Mind you, however, that the quality of traffic should be the same to achieve the same results.
Comparing the conversion rates by month will let you see how the quality of your traffic changes. If you get more traffic but less sales this month as compared to the previous month it means your traffic has become less targeted and you need to work on improving your traffic quality: review the keywords you’re using (this makes sense for both PPC and organic traffic approach), try to identify what people who actually buy the product search for and pursue the best converting keywords.
Monthly data, however, can be skewed: if you are looking at monthly stats for the current month before the end of the month and you’ve had sales in the beginning of the month your conversion rate will appear better than it actually is.
Analysing the conversion rates by site for different sites you use to promote the same product will show you if any of your sites perform worse than others and indicate that they need to be reviewed and improved.
Good affiliate programs normally test the performance of their banners that they provide for the affiliates to use - but you never know which banner will work best for you. By analysing the conversion rates by banner, you will easily see it.
The most important thing to remember about conversion rates analysis is that it’s not just some data to play with - this analysis is supposed to help you improve the conversion rates. The better your conversion rates are, the less effort you need to invest to get sales and the more sales you can get with the same effort. Once you’ve analysed your conversion rates, act upon the results and it will pay back.