What we have found w/rt traffic is this: It's not the amount of traffic you get, it's the amount of traffic you convert.
Let me explain.
1 million hits X zero sales still = $0 in revenue, sales and profit.
Unless your business is a non e-commerce product or service - that is, you're not really selling anything - the amount of traffic is irrelevant. What is important is the quality, targeted-ness, and sales potential of the traffic you're getting.
There are many traffic generation schemes that will deliver tons of traffic. But it won't be good traffic and won't deliver any sales. In fact, some of these traffic generation schemes can actually hurt your search engine rankings because they are considered spammy, or link farms, or some other such offensive type of site to search engines. (Google is particularly hard on spammy sites - see Matt Cutts' blog - Matt is the Director of Spam Prevention at Google and if you've never heard of him or know what his department does, you're not a real online marketer)
We have built sites that get only drops of traffic, but which generate enough sales revenue to justify the site's existence.
By the same token, we have seen sites of businesses that get ridiculous amounts of traffic, but which go out of business!
I keep harping on this point b/c understanding it makes the difference between sound Internet marketing and fluff:
It's not the traffic you get, it's the traffic you convert. Period.
Just as in personal finance, it's not the amount of income you make, but the amount you keep that is important - the same is true for Web traffic. Sheer volume of traffic is meaningless as a statistic in itself; what is more important are factors like
* Number of Pageviews per visit
* Bounce Rate
* Avg. Time on Site
* Conversion Rate
The Two All-Important Metrics
Now, we have basically reduced the value of traffic, and by extension, a website, down to 2 all-important metrics. These metrics are
* CPA
* ROAS
CPA stands for Cost Per Acquistion (sometimes referred to as Cost Per Lead, but this is not technically the same thing). This is just what it sounds like. It's the amount of money or labor you have to spend to "acquire" one (1) sale from your website. Related to CPA is CPC - Cost Per Conversion. This is the amount of dollars or labor you must spend to generate one (1) website conversion on your website.
The idea is that if you get enough conversions, you will eventually get an acquisition and then you can more or less exactly calculate how much it costs to get that acquisition. For our purposes we are defining an "acquisition" as a sale or purchase, either online or offline, but one that is directly attributable to your website. So, if someone visits your site, then calls you, and then you place an order over the phone, that conversion and acquisition should really be attributed to your website.
When an acquisition is not defined as a sale or purchase, the metric is sometimes referred to as Cost Per Lead (CPL).
A website conversion is any measurable event - generated from your website - that leads to a potential sale: e.g.., completing a contact form; calling a phone number only shown on your website; downloading a document; subscrining to news updates; subscribing to a blog; referring a friend; sending a link to a friend; completing a survey or questionnaire; uploading a profile; requesting something in the mail; requesting a fax; sending a fax; clicking a certain video, image or button; commenting on a blog post; and (obviously) purchasing something off your site. The list is almost endless.
ROAS stands for Return on Ad Spend. This is the net gain, in dollars, of your revenue generated from the leads minus what you spent in ad dollars to generate the revenue.
If you look at all your internet marketing efforts as just so many different forms of "advertising", then if you keep the ROAS and CPA metrics in mind - you will go a long way towards establishing a successful online business. This will be true, regardless of whether your site is receiving 100 or 100,000 visitors.
I would much rather have a site that gets 100 visitors, but converts 2 or 3 or 5 % of those visits to sales than have a site that gets 1,000 visitors but converts only .001% to sales. That's a no-brainer.
When our firm consults with small business owners, we always try to drill this into them. We help them locate the best marketing channel online for each of their service or product offerings. By "best" is meant: that channel which doesn't necessarily deliver the largest volume of traffic, but the highest ratio of conversions and/or acquisitions. THAT is quality traffic.
And what we've found is that no one online marketing channel accomplishes this for every type of business. For example, our multimedia firm offers music lessons, professional writing services, basic web development, Public Relations and SEO services. We generate virtually 100% of our business online and we've been in business for 3 years now and have shown a profit each year.
For our business, no one marketing channel works for each of our diverse services. For our music business, local niche directories convert the best. But for our writing services, Google Adwords converts the best. For our SEO services, we use a combination of social media and a press release site that we've built to generate leads. These convert well. For our PR services, old-fashioned word-of-mouth seems to work the best.
And we get good results. Our site has increased in PageRank over the three years of existence at least 1 PagerRank point per year. We now have a PR 4, which is actually pretty difficult to get nowadays. A PR 4 today is like a PR 5.5 a couple of years ago, as Google as tightened up it's PageRank metric. We still don't get a significant amount more traffic this year than we did in year one, but our sales and revenue still increase each year. It has been a slight increase, but an increase nonetheless. Enough so that we've gone from a one-man shop to a 4 staff business.
No comments:
Post a Comment