On Wall Street, financial investors speak of CEOs improving their companies' "top line" by increasing sales volume, or upping their "bottom line" by reducing their expenses to expand the margins from their current sales volume.

For Internet companies, business owners determining where to direct their improvement efforts should take a similar "top line, bottom line" approach.

Defining Top-Line and Bottom-Line Growth

An Internet business improves its top line by increasing the number of unique visitors to its Web site, or its bottom line by increasing its visitor-to-sale or visitor-to-lead conversion rates.

Let me illustrate.

After an online business establishes its performance metrics, it is able to predict with confidence the expected results from visitor traffic. For example, a business's performance metrics may show that for every 1,000 visitors received, 15 sales are completed—a sales conversion rate of 1.5%.

With this understanding, the business can increase its top-line growth by driving more visitors to its Web site. For example, if the business invests money in traffic generation efforts to increase visitor traffic from 1,000 to 10,000, 150 sales will be achieved from the 1.5% sales conversion rate—a 10-fold growth rate.

Top-Line Improvements

What are "traffic generation efforts"?

In brief, traffic generation efforts are ways a business attracts visitors to its Web site. They may include online efforts such as search engine optimization, pay-per-click search engines, affiliate marketing, email campaigns, broad reach media, etc. Or they may include offline efforts like direct mail, television, radio, public relations and so on.

On the other hand, the business may decide to spend its money on improving its bottom line by concentrating efforts on conversion-enhancement strategies.

For example, if the above business invests money in conversion enhancement strategies to increase the sales conversion rate from 1.5% to 2%, then for the same 1,000 visitors sales will increase from 15 to 20—a 25% increase.

Bottom-Line Improvements

So what are conversion enhancement strategies?

Conversion enhancement strategies are Web site design changes that most accurately address your visitors' wants and persuade them to take an action to achieve your goals as well as theirs. There are endless strategies available for businesses to use to improve their conversion rates, although some have greater significance than others.

Depending on your type of online business, different strategies may achieve greater results for your Web site and offer greater relevancy for your visitors. If you manage a consumer or business product Web site, then conversion enhancement strategies that focus on reducing shopping cart abandonment may provide the greatest conversion improvement.

Conversion-Enhancement Strategies

There are also conversion enhancement strategies that improve conversion rates for all online businesses, regardless of type. These strategies may include improvements to…

  • A Web site's sales copy, including writing headlines and subheads with stronger visitor appeal, defining stronger calls to action, using more visitor-relevant and benefit-oriented words and positioning popular visitor keywords in prominent areas connect with visitors and persuade action

  • Graphics and layout design to generate visual relevancy and message consistency for your visitors

  • Guarantees, returns, shipping, privacy, customer support and security policies that you present to gain confidence and trust from your visitors

  • Navigational structures to make it easier and more convenient for your visitors to locate the products and services they desire to purchase

  • Buying or contact options to increase the ways in which a visitor can purchase or receive contact from you, including alternatives to a shopping cart or online form—such as phone, mail, fax, online chat and email

Deciding Between Top-Line and Bottom-Line Improvements

Your decision to pursue top-line or bottom-line improvements should be evaluated by the following:

  1. The objectives you plan to achieve

  2. The amount of money you have to spend

  3. The timeline established to meet your goals

  4. The amount of visitor traffic your site currently receives

  5. The conversion rate your web site currently achieves for your calls-to-action

Establishing a plan before you make any decisions is critical. As the old joke goes, "I'm making progress climbing the ladder of success—I just don't know if it's leaning against the right wall." The plan should include measurable goals based on your current performance metrics.

Knowing Your Budget

Knowing your budget is essential in the selection process. Certain conversion-enhancement strategies, for example, can be implemented for a small investment of your time and effort. Traffic-generation efforts, meanwhile, may require greater investments of time or effort, or both.

Figuring your budget enables you to also forecast the potential return you may receive from improving your top line versus your bottom line. Obviously, the areas that provide the biggest bang for your buck are the ones to start first.

Understanding your timeline is also essential, since many conversion enhancement strategies will offer quick improvement to your conversion rates, while traffic generation efforts like search engine optimization have long lag times before delivering ample visitor traffic.

Identifying your current visitor traffic volume and conversion rates, especially for new Internet businesses, is also very important when determining top-line or bottom-line improvement. If you have low visitor traffic, then you will have difficulty in determining if a conversion enhancement strategy had a real effect on improving your conversion rates.

For example, if your Web site receives 100 visitors a month, it will take you at least a month or two before any real measurable changes occur to your conversion rates. In this case, you would be better off focusing on top-line (traffic generation) efforts first and then returning to bottom-line improvements for increasing your conversion rates.

Likewise, if your Web site has strong visitor traffic, like 15,000 visitors per month, yet your current conversion rate produces only 5 sales—then, obviously, you need to improve your bottom line and focus on conversion enhancement strategies.

Take time to review your top-line versus bottom-line opportunities to decide which one offers you the best return. If you concentrate on improving one of the two areas over the next month, you can be confident that measurable sales growth is achievable for your Internet business.

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Kevin Gold is cofounder of Enhanced Concepts, Inc. (www.enhancedconcepts.com).