The Impact of Ad Rank on the Volume of your Web Traffic, Leads, and New Business

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How do you get more traffic from your Pay-Per-Click campaign? You’ve already figured out where to get quality traffic, and how to convert that traffic into leads on your website. You’ve even confirmed that those leads are becoming real sales opportunities at a good clip. Now you just need volume.

Increase Web Traffic Concept

This is the main question repeatedly asked by our software companies – in particular, the ones that are achieving great results with their Capterra campaign. Below I’ll cover not only how to get more traffic, but breakdown the intricacies of what you can expect at different Pay-Per-Click ad rank positions and why.

First, there is a way to do it without increasing your bid/position at all. That is to improve the quality and appearance of your listing in order to optimize your Click Through Rate. You can do that by:

  1. Improving your ad copy so that it more clearly and concisely demonstrates the specific, tangible benefits of your software. Does it enable people to do a task in minutes instead of hours (efficiency)? If so, then state it. Does it allow people to perform a task with more impactful outcomes (effectiveness)? If so, then state that too. If you have a powerful feature that everyone asks for and helps you stand out from the competition, be sure to mention it. And if you target a specific niche (small training organizations, large churches, etc.) then say so!
  2. Get more reviews. Put yourself in the shoes of a Capterra user. Would you be more likely to trust (and click on) a listing with dozens of reviews or just a few reviews? Or no reviews? It is not surprising to see listings with lots of reviews increase their Click Through Rates by 10-20% or more, and sometimes even outperform listings above them. Reviews are free, you can easily solicit them from your customers, and it takes them all of 5-10 minutes to enter a review. It really is that simple.

Once you have optimized your listing, the only way left to increase your click and lead volume is to increase your bid to achieve higher positions. The impact of higher placement on traffic volume (Click Through Rate) is enormous. Once you get into the top ten placements, the difference from one position to the next is significant.

We pulled position and click data across all of our software categories. The chart below shows how much more traffic you can expect when you simply increase from one position to the next higher one. Keep in mind that this is aggregate data and will differ for each category.

DirectoryPosition_TrafficIncrease_Tablex2

The biggest jump occurs from position #2 to position #1, but as you can see there are sizable jumps between every position near the top. And when you jump multiple spots you often will double or even triple your traffic.

So the higher you bid, the higher you are positioned and the more traffic, leads, and new customers you will generate. Is this self-serving? It admittedly is given that we are a Pay Per Click channel, and the higher you bid, the more revenue we generate. Nevertheless, it is absolutely true. The data does not lie. Placement is the single biggest driver of volume.

Does this mean we want and encourage our software companies to engage in a bidding war for the top spot? Actually, no. That is not sustainable. Instead, we encourage you to bid exactly what your company can afford based on six key metrics – your conversion rates, close rates, monthly revenue per customer, retention rate, profit margin, and growth goals. If your combined success on those six metrics allows you to win the top spot then kudos to you. If not, then so be it. It will give you that much more motivation to improve on those six metrics!

Let’s discuss each of them in order.

Conversion Rate

Your software website has several goals, but the primary one is to convert as many prospects into web leads as possible. We all surf the web anonymously so getting our hard earned web visitors to divulge their contact details is an essential step in lead generation. The three keys to a high converting software website are:

  1. Strong Call To Action (such as Free Trial or Request Demo) tied to a short form. The CTA should be very apparent (colorful button is ideal) on every page of your website. The form should be as brief as possible – name, company name, email, phone, and preferably nothing else.
  2. Concise copy that clearly articulates your main benefits and is clearly visible to your web visitors. What do your prospects care about most – simplicity, cost, integration, mobile access, something else? Whatever it is, try to include it in your copy.
  3. Trust elements. Why should the visitor trust you over the hundreds of other options they are being inundated with? Trust elements include stuff like customer testimonials, customer logos, press mentions, number of users, and third party validation such as the Capterra Reviews badge.

Good conversion rates are typically in the 5-10% range, but we have seen many software companies break through and reach 15-20%.

Close Rate

What % of your web leads turn into paying customers? Many software companies divide this into two numbers – the % of web leads that become real opportunities and the % of those opportunities that become paying customers. From our experience, 10-30% is common for both of those numbers. That translates to overall close rates in the 1-10% range.

What are the keys to improving your conversion rates? Marketing automation helps. Quickly responding to incoming leads (auto-respond emails that ask a qualifying question are ideal) and nurturing those leads via phone and email outreach is hugely important. It can easily take 5-10 outreaches (phone and email combined) before you get through to a prospect. A professional sales staff that is helpful, diligent, and unafraid of challenging potential buyers is also a key ingredient.

Monthly Revenue Per Customer

Are you able to price your product in a way that matches the value that customers are seeing? Are you serving clients that are growing their usage, and are you benefiting from that growth with price increases? Obviously, if being cheap is a major differentiator for you then this will be a tough metric to improve. But a 10% price increase can lead to even greater increases in profits.

Retention Rate

The longer a customer stays with you, the more revenue you will generate during the lifetime of that customer. How do you keep your customers? Do you provide an amazing customer experience? Is your product beautiful? Is the value to the customer clear? Has their management team bought in? All of these things help with retention rates. You may want to consider using a metric like Net Promoter scores to evaluate how you are doing on a regular basis.

Profit Margin

Running an efficient operation helps to free up funds for marketing your software. The higher your margins are, the less you are spending elsewhere, the more you can invest in your advertising efforts.

Growth Goals

The higher your growth goals, the more you need to invest in the marketing and sales side of the business. If slow growth where you continue to rely 100% on word of mouth referrals is acceptable to you, then you may not be advertising at all. On the other hand, if you are VC-funded or just naturally aggressive, then you may decide to invest your profits in more growth. It’s very important for the executive team to be as clear as possible regarding which priority is greater: profit margin or revenue growth. The greater the focus on growth, the more important bidding aggressively in PPC campaigns will be.

Decide which metrics have the most opportunity for improvement and focus your efforts there. When you think about it, these metrics are really just indicators of how successful your software company is. For example, if your product isn’t any good, you’ll have a low retention rate. If your sales team isn’t any good, you will have a low close rate. Working on your weak spots not only improves your ability to market yourself, but it improves your entire software business.

One final note on bidding – the beauty with most Pay Per Click channels is that you don’t necessarily pay what you bid. What you bid represents the most you will actually pay per click. Instead, your actual payment per click will be driven by the next highest bidders. So if you decide that your metrics allow you to pay up a maximum of $10/click you can enter that amount as your bid and not worry about what others are bidding. If they bid $5, then you’ll actually be paying something much closer to that level. If they are bidding $15, then you shouldn’t really even thinking about trying to match them – at least not until your metrics catch up.

Please add your suggestions in the comments!

Looking for software? Check out Capterra's list of the best software solutions.

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About the Author

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Michael Ortner

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Mike started Capterra in 1999 as the first website dedicated to helping people find the right software for their business. Today, Capterra lists over 30,000 software companies, displays more than 250,000 software reviews, and receives over 3,000,000 monthly visitors. He's been featured in the Wall Street Journal, Washington Post, Fox News, and Inc. Magazine, among other publications, where he's spoken on topics ranging from the business software industry to running and growing a business in the 21st century. Mike received a business degree from Georgetown University and a philosophy degree from the University of London. He lives in McLean, VA with his wife and six children.

Comments

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Great stuff!

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Thank you, Michael. This article has been very helpful for my team while setting up Voxility profile on Capterra.

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Michael,

We have terrific feedback from our customers and anyone looking to generate leads from the retail and ecommerce industries ought to like us for the depth of data we provide. That being said, we can only tell our customers to review once. I just counted and there are at least 15 review sites that prospects consult. Asking our customers to rate us everywhere makes it a project for them.

Do you have any incentives baked in to overcome the friction?

Ashwin Ramasamy
Cofounder – PipeCandy
https://pipecandy.com

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The main factor that pushes customers to make a purchase decision is product quality. Researchers said that “product quality is the most important factor that influences consumers’ buying decisions.” Then comes promotion made by companies. The study is published here
http://www.ibimapublishing.com/journals/JMRCS/2011/421059/421059.html

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Email your customers a link to your reviews page and ask them to review you. If you have already done this, then add a mention of it to your customer newsletter template so they see it regularly. You can also have your customer service team add it to their email signatures.

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Hey Michael, I am agree with your all the points but can you tell me about ‘Get more reviews’. I mean how we can get more reviews? What are the ways to get more reviews in short time?

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Nice post.

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