jeff-bezosIf you do business, online or traditional business, I hope you took the time to read Amazon.com CEO Jeff Bezos’ 2013 shareholder letter.

In it he shares this tidbit:

“Our heavy investments in Prime, AWS, Kindle, digital media, and customer experience in general strike some as too generous, shareholder indifferent, or even at odds with being a for-profit company. ‘Amazon, as far as I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers,’ writes one outside observer.

But I don’t think so.

To me, trying to dole out improvements in a just-in-time fashion would be too clever by half. It would be risky in a world as fast-moving as the one we all live in.

More fundamentally, I think long-term thinking squares the circle. Proactively delighting customers earns trust, which earns more business from those customers, even in new business arenas. Take a long-term view, and the interests of customers and shareholders align.”

The reason many companies struggle is because of the metrics they choose to focus on. Since the early days of online marketing, people have been obsessed with traffic and H.I.T.S. (how idiots track success, as it is often called). If you’re shaking your head about this one, so am I.

Roy Williams, the “Wizard of Ads,” shared a similarly brilliant insight from one of his fastest growing retail clients in his Monday Morning Memo:

I asked, “How is traffic trending? Are we ahead of last year?”

“Roy, I don’t measure traffic.”

“You’re kidding.”

“Last week one of my salespeople made 63 sales presentations and closed only 24 of them. That tells me 39 people bought somewhere else. And right now they’re telling all their friends why they bought where they did. They’re showing off their purchases and explaining why they didn’t buy from us.”

“Good point.”

“That salesperson is no longer with us.”

“You’re really serious about this.”

“Today’s close rate is the most reliable indicator of tomorrow’s traffic. When close rate is high, traffic increases. When close rate begins to slide, traffic soon begins to slide as well.”

The same applies online!

How is your conversion rate trending?

Please allow me to make a suggestion to you. You don’t have a traffic problem, you have a conversion problem!

I have been advocating since the mid-90s, and in this column since 2001, that “conversion rate is a measure of your ability to persuade visitors to take the action you want them to take. It’s a reflection of your effectiveness and customer satisfaction. For you to achieve your goals, visitors must first achieve theirs.”

When a visitor comes to your website prepared to buy – not everyone will buy right away, of course – and isn’t converted by your sales process, she is likely to buy from one of your competitors. When she brags to her friends about what she bought and who she bought it from, it won’t be you she raves about. It’s the customer experience that matters.

Can you tell me why the consumer shouldn’t have bought it from you if she came to your website?

P.S. If you want to improve your customers’ experience and increase conversion rates, please check out how to master your conversion rate optimization, and why it must be your CEO’s responsibility to increase conversion rates.