Ratio Analysis for Bloggers 1: Subscriber Conversion Ratio

I have a degree in Internal Economics, but the course aimed to be very broad, so we ended up having lessons on finance and business administration as well. I was not a fan of the finance classes, but I remember that one topic interested me a lot: financial ratios.

Financial ratios are basically a quick system to examine the financial conditions of a business or project. They express the relation of one factor to some other. I am sure you are familiar with the ROI (Return on Investment) ratio, which basically illustrates the relation of the money you will gain on a project, relative to the amount you had previously invested.

Sometimes the ratio per se has no meaning, but it becomes immensely useful when you are able to compare different ratios of the same company over time, or when you need to compare two different companies or projects.

At this point you might be asking yourself: are you changing the topic of this blog to Finance 101 or what?

Not at all. In the past I had already mentioned that blogs can be seen as business entities. They have managers (authors), inputs (ideas and information), outputs (posts and articles), clients (readers), competitors (bloggers or other websites on the same niche), partners (blog networks, friends), performance indicators (traffic, RSS subscribers, incoming links) and so on.

The idea that came to my mind, therefore, was to apply ratio analysis to blogs. The objective is to create a set of tools that bloggers can use to examine the performance of their own blogs, or to compare different blogs. Below you will find the first ratio of the series.

Subscriber Conversion Ratio (SCR)

Gaining RSS and email subscribers is a priority for any blogger. Those readers are the most loyal ones, and they represent a guaranteed audience and source of traffic for your blog.

Now most blogs will gain subscribers from their articles and posts. That is: someone comes to your site from a search engine or from an organic link, reads one or more of your posts, like it, and decide to subscribe to stay updated with future content. Sure some blogs will have competitions and prizes for boosting those numbers, but that is the exception and not the rule.

If that is the case, one analysis that we can make is how well your articles and design are working towards the goal of gaining new RSS or email subscribers.

Notice that I said “how well your articles and design” because both of those factors will contribute to the conversion rate. You need to have both quality and engaging content, and a design that supports your goals. A blog that has outstanding content but where the RSS icon is hidden at the footer will have a low conversion rate. Similarly, a blog with several big RSS icons all over the place might not convert at all if the quality of the content is poor.

Back to the central question, you can examine how well you are converting visitors into subscribers with the Subscriber Conversion Ratio (SCR), which is simply the total number of subscribers that you have (as reported by Feedburner, for example) divided by the total number of posts on your blog.

Applying the numbers

Let’s apply the ratio to some real cases now.

DailyBlogTips.com has 13855 subscribers as of today, and 822 posts. The SCR therefore is 13855 divided by 822, which is equal to 16,9. On average, therefore, every post that I wrote here brought in 16,9 new subscribers.

DailyWritingTips.com has 10976 subscribers and 460 posts. The SCR there is 23,9. As you can see on Daily Writing Tips every new post brought in more subscribers than on Daily Blog Tips.

DailyBits.com has 1122 subscribers and 196 posts. The SCR is very low at 5,7.

There are 5 main factors that will affect the SCR:

1. Quality of the content: the higher the quality of the content, the higher the SCR should be. Several parameters will affect the quality though, including the writing skills of the author, the originality of its ideas, the value of the information for the readers and so on.
2. Design: the design of the blog will also affect the SCR. The overall look will help to get first time visitors interested. The right positioning of RSS icons and email subscription forms will then affect the conversion rate of visitors into subscribers.
3. Niche. The niche of the blog will strongly affect its SCR as well. Blogs on tech-savvy niches will tend to have a higher SCR than blogs on other niches.
4. Growth phase. Blogs that are new or starting to grow might present a lower SCR than established ones. That is because most successful blogs or websites present an exponential growth pattern. There is a tipping point where the traffic and subscriber levels suddenly jump out of the normal line.
5. Content format: blogs that publish small and frequent posts will obviously have a lower SCR when compared to blogs that publish longer, how-to like articles.

Considering that all my three sites have the same design, therefore, I would attribute the low SCR of DailyBits.com to the quality of the content and to the content format. Its audience is as tech-savvy as on the other bloggers, so that should not be influencing either. Sure we have good content over there, but it is not as focused and as consistent as on the other two sites, and the posts tend to be shorter and news based.

Conclusion

While there are different factors that will affect the SCR, I think you could still use it to examine your blog’s performance. Compare the SCR of your blog with those on the same niche. If the number you get is significantly lower, perhaps you should work on the design, on the content format or try to improve the overall quality of your articles.

Suppose you have 4 different blogs, and you want to focus on one. The SCR could be a factor used to decide which one you should focus on.

Over to the readers

It is difficult to estimate what is a good SCR and what is a bad. We would need to have more data points, so if you want to help this out please share your SCR and niche on the comments below.

Do you think this could be effective to comparing blogs on the same niche?