Classy Llama Studios just recently built a very powerful and (hopefully) effective social game engine that we call “a very powerful and effective social game engine,” or “The Classy Llama Studios Social Game Engine,” but only because we haven’t come up with a better name yet.

We first built the campaign to create buzz and attendance to The Llama Manifesto, a launch event for Kurt Theobald’s double-book release, and it produced very positive results, with a 16% e-mail capture rate (for every 100 unique visitors, 16 of them submitted their e-mail address) and a 50% viral rate (For every two people that came to the site through non-game generated sources, one person came virally via game referral links), which is a decent viral rate; considering it was the first generation implementation, we are very pleased with it.

We are now implementing the social game engine for Manhattan-based OMG Jeans’ pre-grand opening for their online store, and we are excited to see the results we are able to produce.  By offering huge discounts, scalable rewards, and awesome grand prizes, the game’s intention is to drive multi-generational viral activity by giving points based on referrals four generations deep (so you get points for your referral’s referral’s referrals, and everything in between).

OMG Jeans' Implementation of Classy Llama's Social Game Engine (click to go to game)

View the OMG Jeans’ Social Game.

We will post results for better or worse on the blog when we have them.  We expect the game to run through late April.  Stay tuned…

No matter what you sell online, there are three core constituents to revenue:  Traffic, Conversion Rate, and Average Order Size.  In fact, it’s a cubic equation: Revenue = Traffic (#) x Conversion (%) x Average Order Size ($).  So if you generate 21,000 visits in a month with a conversion rate of 3.00% and an average order size of $156.23, your revenue is $98,424.90 (21,000 x 3.00% x $156.23).

If you can analyze each of these variables effectively, the e-commerce world is your banana.  I hope that by the end of this article series, you’ll understand the “sub-variables” that affect each of these core revenue variables, equipping you with the tools to optimize your e-commerce revenue.  (btw, many of these principles apply to business in general, not just e-commerce)

This first article will relate to generating Traffic and the variables that affect it.

Keys to Traffic

Traffic is calculated according to the following equation:  Unique Visitors x Average Visit Frequency

Keys to unique visitor traffic are Medium (where they found your site) and Presentation (what they experienced through the medium/media that made them visit).  The key to repeat traffic is the Visit Experience (their evaluation of their visit retrospectively).  Every single person that visits your site has a corresponding medium and presentation history, and if they visit the site more than once, they have an experience history as well.

Medium

The primary factors of a medium are relevance and accessibility.

The key relevance question:  Is the medium used connecting with the kind of people that will see value in what you offer and need it now or at some point in the future, preferably in the near future?

The key accessibility question:  Is it easy for the recipient of the message to take action in response to the message?

Presentation

Every presentation has a persuasive effect that depends on two variables:  To WHOM it’s presented to and WHAT is presented.  WHAT you communicate is worthless without the right audience (they need what you’re offering and they need it now or soon), and likewise, it doesn’t matter how targeted and ripe your audience is for what you’re presenting if WHAT you communicate is poorly constructed.  In fact, it can do more harm than good to make a poor presentation to the right audience by appearing unprofessional and incapable to deliver quality.

The presentation variables depend heavily on the medium in question.  If it is word-of-mouth, the presentation is what is being communicated by the referrer to the referee.  What are they saying about your site and what you offer?  If it’s search marketing, is what you’re communicating in your ad relevant and does it point to a highly relevant landing page?  Are you using highly targeted keywords with ad copy that is tailored to those keywords?  There are quality questions to ask for each medium, and they vary significantly.  But all media should be based on the same quality questions:  Are we communicating to the right audience?  Are we communicating the right message to that audience to effect the desired behavior (click a link, request a quote, submit an e-mail address, buy a product, etc.).

Visit Experience

Experience is the single factor that determines whether a unique visitor becomes a repeat visitor.  In short, visit experience, how a visitor evaluates their visit retrospectively, is defined by if the visitor:

1.  Felt that the content was relevant to them

2.  Felt that they could navigate and access what they wanted easily and intuitively

3.  Has a compelling, memorable reason to return.

If these three criteria are met, the experience will likely develop into a repeat visit.

E-commerce traffic means nothing if you can’t convert that traffic into sales.  In my next post, I’ll discuss the key to optimizing the conversion rate.