One problem with doing business online is that it’s easy to treat it as something other than a business. Many business owners treat it as if the ordinary rules of business don’t apply.
In reality, though, business online is the same as business offline: if it isn’t making money, it isn’t working.
You’d think the business world would have learned from the dot-com to dot-bomb crash that attracted investors simply on the basis of, “Hey, we’re a WEBSITE, and websites are bound to make a fortune.”
Yet, here, eight years later, many business owners still find themselves seduced by the aura of the Web, focusing on metrics that are nothing more than a means to an end.
Metrics like backlinks, search engine rankings, and even traffic are valid metrics. But they must be viewed in the context of what effect they are having on generating revenue.
What role do they each of them play?
Backlinks is a term that refers to links from other sites that point to your site. Their value is twofold. First, they are a potential source of visitors. Second, they represent a vote for the page to which it points.
This vote is important when it comes to search engine rankings. With thousands of websites that seem equally relevant as far as what is on their page, the search engines use incoming links, especially ones from high-regarded authority sites, to determine which sites other sites consider most valuable.
Backlinks can affect your revenues indirectly by bringing you visitors and by helping to increase your search engine rankings. In no way, though, do they measure your revenues.
Search engine rankings, similarly, affect your revenues indirectly. High rankings for highly searched terms bring you more visitors, but they do not directly increase or decrease your revenues.
Website traffic comes closest to affecting your revenue. It represents the living, breathing people who visit your site. Yet it still is not the key metric you ultimately want to track.
In the end, the metric that matters is revenue. You can track any of these other metrics to assess general elements of your website’s potential for generating revenue. But never let them distract your attention from revenues.
Even when you plan expenditures that affect these other metrics primarily, your ultimate concern should not be, “What will this do for my backlinks, or rankings, or traffic?” but “What will this do for my bottom line?”
Always make sure that any discussion of website work focuses squarely on what really matters to your business.
Filed under Internet Marketing, Internet Marketing Training, Making Money by on May 2nd, 2009. Comment. 
How do you know if your website is worth what you’re investing in it? How do you know if a promotional campaign will pay for itself? There are five calculations you can make to have these numbers at your fingertips.
The following list shows you what they are, where to find the data for them, how to calculate them, and how to use them once you have them.
Visitor Conversion Ratio
What it is
The percentage of visitors to your site who complete whatever action you want them to take (for example, buy your product, sign up for your newsletter).
What data you need
• Number of Sales (from your shopping cart or account records)
• Number of Visitors (from your Web referrer logs)
How to calculate
Number of sales ÷ Number of visitors X 100 = Visitor Conversion Ratio
How to use your Visitor Conversion Ratio
Most sites convert at a rate of below 1%, but sites that are well optimized for conversion can enjoy conversion rates of 10% or more. Track you conversion rate as you make changes to your site and work keep increasing it.
Cost/Visitor (CPV) Ratio
What it is
How much it costs you to obtain a visitor. Include all costs of running your website.
What data you need
• Web Marketing Costs (from your accounting information)
• Number of Visitors (from your Web referrer logs)
How to calculate
Web Marketing Costs ÷ Number of Visitors = Cost/Visitor
How to use your Cost/Visitor Ratio
Get an accurate picture of how much it actually costs to bring each visitor to your site. Then work to bring your Cost/Visitor down by cutting expenses that are not successful in producing sales.
Revenue/Visitor Ratio
What it is
Revenue/Visitor is the flip side of Cost/Visitor. It gives you a picture of what each visitor to your site is worth to you.
What you need
• Sales Revenue (from your accounting information about sales that are related to your website)
• Number of Visitors (from your Web referrer log)
How to calculate
Sales revenue ÷ Number of visitors = Revenue/Visitor
How to use your Revenue/Visitor Ratio
Compare your Cost/Visitor to your Revenue/Visitor to determine if you're spending too much for your visitors. If you have a healthy gap between the two, you can afford to be more aggressive in obtaining visitors. If they’re close, work on raising your Visitor Conversion Rate to make better use of the traffic coming into your site, and work to lower your Cost/Visitor by eliminating spending that is not leading to sales.
Cost/Customer (CPC) Ratio
What it is
How much it costs you to obtain each paying customer. Include all costs of running your website.
What data you need
• Web Marketing Costs (from your accounting records)
• Number of Customers (from your shopping cart or your accounting records)
How to calculate
Web Marketing Costs ÷ Number of Customers = Cost/Customer
How to use your Cost/Customer Ratio
Use it to get an accurate picture of how much it actually costs to bring each paying customer to your site. Work to bring your Cost/Customer down by cutting expenses that are not successful in producing sales.
Revenue/Customer Ratio
What it is
Revenue/Customer is the flip side of Cost/Customer. It gives you a picture of what each paying customer on your site is worth to you.
Where to find it
• Web Sales Revenue (from your accounting records)
• Number of Customers (from your shopping cart or your accounting records)
How to calculate
Web Sales Revenue ÷ Number of Customers = Revenue/Customer
How to use your Revenue/Customer Ratio
Compare your Cost/Customer to your Revenue/Customer to determine if you're spending too much for your paying customers. If you have a gap between them, you can afford to be more aggressive in obtaining visitors. If they’re close, work on raising your Visitor Conversion Rate to make better use of the traffic coming into your site, and work on lowering your Cost/Visitor by eliminating spending that is not leading to sales.
Ecommerce Facts
A list of online marketing statistics includes eye-opening facts about the growth of the mobile Web, as well as consumers’ growing reliance on the Web to research purchases. (www.virtualmarketingblog.com/index.php/20080224/7-statistics-relevant-to-internet-marketing/)
As consumer spending tightens, consumers are turning to the Internet increasingly because of the ability it gives to quickly compare prices and get the best deals. (www.emarketer.com/Article.aspx?id=1006285&src=article_head_sitesearch)
Although often ignored by marketers, a new survey showed that consumers who are 62 and over are far more active online than previously thought – and show no less willingness to buy online than younger, more “tech-savvy” Internet users. (www.clickz.com/showPage.html?page=3629395)
Filed under Ideas and Tips, Internet Marketing, Making Money by on Apr 25th, 2009. Comment.
If your car runs sluggishly, what do you do? You take it to a mechanic to pinpoint the problem. For most people, a car is too complicated to diagnose by themselves.
For most people, a sluggish website comes across in the same way – too complicated to fix the problem yourself. If your web business gets visitors, though, only to misfire on converting them to sales, there’s a six-second test you can do on your site that will help you diagnose a number of potential problems.
Open your page and glance at it. Let your eyes scan across the very top of your screen. Then scan down the center to the bottom of the screen. Don't scroll down. You want to see only what your visitor sees the instant your site appears. Then ask yourself the following three questions, based solely on that six-second scan.
• Does your title grab them emotionally?
• Do they quickly grasp what you can do for them?
• Do they clearly understand what to do next?
Does your title grab them emotionally?
Does it clearly identify the problem that brought them to you? Or is it a generic label that vaguely describes your business?
You want your title to show them that you know exactly who they are and exactly what they need. Ask yourself what they’re looking for. Really put yourself in their mindset.
Think of it from their perspective (as a problem that they’re trying to solve) instead of from yours (as a product or service that you’re trying to sell). What words or phrases would they use to describe their problem? Use those words to introduce them to your solution.
For example, this article is titled “How a Six-Second Scan Can Boost Your Sales.” Would it have caught your attention as much if it had read, “Improving Your Website?”
The phrase “Boost Your Sales” caught your attention because it addressed a key problem for you. Combining that phrase with an unfamiliar concept like a “Six-Second Scan” piqued your curiosity. And the phrase “Six Second Scan” suggests a solution that is fast and easy.
Forget any misplaced ideas of what is "supposed" to be professional looking. You get no points for cool, detached formality. The only way you get people's attention by connecting with them.
Do they quickly grasp what you can do for them?
The second thing to check is whether your page is easily to skim. Does your eye jump naturally to key points on the page? Do headings, bolded text, and graphics give you an instant "feel" for what you'll find on that page even before you read it?
People don't want to "work" at reading online. Big blocks of text lead them to hit their Back button and find something more friendly to their eyes. Give them an instant overview of the content and they'll pick out and read the details they need.
Do they quickly understand what to do next?
The third thing you want to check is whether they'll grasp THE key point of the page: the action they need to take next.
Many sites waste prime space, front and center, on a rambling introduction. Meanwhile, all the visitor wants to know is, "Can I find what I'm looking for here?"
Make sure your visitors can see, quickly and clearly, what they need to do next to solve the problem that brought them to you. Don’t count on them scrolling down to find this vital information. Put it right in front of them the instant they see your page.
Final thoughts
Granted, it takes longer than six seconds to read these guidelines. The scan itself, though, should be nearly instantaneous. If these elements are not instantly evident on your page, you need to fix them so that they are.
Your visitors will unconsciously make this exact same scan the instant they arrive. Make sure they see clearly and easily how you solve the problem that brought them there.
Filed under Blog Promotion, Ideas and Tips, Internet Marketing, Making Money by on Apr 21st, 2009. Comment.
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