I talk to lots and lots of online marketers. Most of them are awesome, really smart folks. But often, they are seduced by some stinkin’ thinkin’. Namely, they look at their sales efforts strictly as a function of traffic. The formula for success is essentially Traffic x Conversion Rate = Money. And this, of course, is true. But for many, many marketers, the only variable in that equation is Traffic. Conversion seems to be a constant, fixed point in the thinking of many.

I’ve been in e-commerce for a long, long time (since the 1990’s…back when there was dial-up, no Google, and I was smarter than my phone). And technology has evolved massively since the early days. But for many e-commerce players, their thinking about presentation hasn’t changed very much. For many, products are static things that are only sold through the application of traffic. Products are presented, largely, without thought of who is looking at it. The product page is a static and dull place. Sure, there may be some dynamic product recommendations from folks like MyBuys or iGoDigital, but the product is exactly the same, no matter who is looking at it. It is time to change that thinking.

The equation Traffic x Conversion Rate has two variables. Traffic helps, but at some point, traffic generation becomes noise. You will do all kinds of stuff to drive people to your site, hoping that encapsulated within all that traffic, there is the audience you were really hoping to find. It is pretty inefficient. For the rest of this post, let’s imagine that now until forever, the amount traffic to your site will not change. What would you do? The formula is still true, but now traffic is a constant.

You focus on conversion rates. For many marketers, this jumps quickly into things like shopping cart design, or pricing strategies. These things are important, of course, but they aren’t causal. Recently, I was speaking with a large online retailer who was told me that he couldn’t afford to increase conversion rates. After picking my jaw up off the ground, I asked him why. He stated that increased conversion was tightly correlated to declining margins, so the the net result was that increased conversions lowered profits. OMFG.

So, of course, increased conversions mean lowered margins if pricing and promotions are the only weapons in your arsenal. But online marketers have incredible tools. They have purchase history(what have you bought before), they have entry data (did they come from a search? Did they come from an affiliate?), they have frequency (have you been to this page recently?). These are all the tools that we use to do retargeting…off of our site. Retargeting is a great form of activation, but why don’t we leverage the same thinking while the customer is on our site? Why don’t we create a dynamic environment that leverages the same data? If someone comes to a site looking for blue skinny pants, you should be able to give them a page that is about blue skinny pants (this is the stuff that Bloomreach does…smart folks…see why they are changing SEO for the better). If someone comes to you from an affiliate ad on a content site, why not have a widget that shows how the content publisher contextualized the product? If this product was recommended by a friend, why don’t you highlight this? Does this customer typically pay via Discover? Remind them that they can get cash back on this purchase with that card.

We live in a world of big data. And online marketers capture so much data about their customers. There are thousands of actionable data points available to marketers to make their experience unique for each customer. Marketers should be jumping into this world of micro-personalization with both feet. There are services like Monetate that are a start, but each marketer should be thinking from the ground up. Your customers and their experiences are static. With every interaction, you have the opportunity to create relevance. Grab it, leverage it, and change the equation!