With so much online marketing advice out there and a new whiz bang tactic or website introduced almost every day, it can be easy to forget there are really only 3 ways to generate more online revenue.
That’s right…just 3.
So as you plan your 2012 marketing strategy and schedule, make sure you’re focused on the one that’ll have the biggest impact on YOUR business right NOW.
As your business grows your priorities will naturally shift between one of of these three core areas:
- Lifetime Value
Rather than try to improve everything all at once, it’s best to pick just one and make that your priority in the next several months. You’ll see much faster and bigger improvements by isolating just one area rather than spreading yourself out too thin.
Then once you hit some key milestones, shift gears and improve one of the other two areas… Rinse… Repeat…
This will also help you stay more focused and you won’t be overwhelmed by all of your options. If you know your priority right now is Traffic, then you can tune out all the advice, tactics, and websites geared toward improving conversions and lifetime value. File all that info away for when you switch your focus.
Now let’s look at how you can determine which of the 3 should be your focus right now and some ideas for how you can improve each area.
Traffic is by far the #1 priority for most business owners. It’s easy to trick yourself into believing all you need is more traffic and you’ll generate more sales.
However, that’s not always the case. For many businesses, improving conversions is more important, but we’ll get to that in a moment.
For now let’s see how to know if Traffic should be your #1 priority:
- If you’re just launching your business and website, then Traffic is absolutely your priority. No matter how hard you try, you’ll never improve conversions with zero traffic and there’s no lifetime value without sales. So your only choice when you’re starting out is to focus on Traffic.
- If you have a sales path built that consistently generates $X dollars per visit, then you should focus on where you can buy Traffic for less than $X.
So if your business is in one of the situations described above you’re in the right place. If you’re not, then move on to the Conversions section below.
My advice to anyone just starting out and who is serious about growing the business is to invest in paid traffic. You’ll have more control and you’ll be able to drive consistent, targeted prospects to your sales pages, which is critical when you move on to optimizing for conversions.
All other traffic strategies take too long to set up (i.e. SEO can take 6 months) and are unreliable (i.e. affiliate traffic can come and go) so they are not great choices for startups.
If you already have your sales path humming and you just need some ideas for how to crank up the Traffic spigot, then here are a few choices:
- Paid search – AdWords and Bing/Yahoo
- Display ads – AdWords, Bing/Yahoo, AOL AdSonar, Adbrite, BuySellAds, AdBlade, Adknoweldge, etc.
- Search Engine Optimization
- Article marketing
- Video marketing
- Guest blogging, webinars, and speaking
- Email list rental
- Affiliates/JV Partnerships and/or Affiliate Networks
- Social media groups
- Direct mail
As I said earlier, improving Conversions is typically where businesses should focus if they already have a decent stream of traffic.
There are two simple reasons why:
- If you can double your website conversion rate, then you’ll double your sales without any more traffic to your site. Or in other words, you can double your sales without spending any more money on your online advertising.
- A low conversion rate = high cost per sale. If your cost per sale is too high, then your options for Traffic are limited and you can’t grow your business until you improve your conversion rates.
So if you’re getting traffic, but either no sales or very few sales then you need to focus on improving your website Conversion rate.
Here are two articles that will get you well on your way to converting more visitors to customers:
- How to Increase Your Landing Page Conversion Rates in 3 Simple Steps
- 8 Elements of Landing Pages That Sell
Plus, I recommend adding live chat or an exit survey in order to collect visitor feedback and questions. This info will be invaluable as you try to make improvements to your sales pages.
The lifetime value of your customers is the metric that can eventually determine success or failure in your marketplace.
At a certain point, you’re going to run up against the limits of Traffic and Conversions. Traffic is not infinite and you can only buy the traffic that gives you a return on your investment (ROI).
So that means the lifetime value of your customer sets the upper limits for how much Traffic you can buy. If your customer is worth $100, then you can spend up to $100 for the sale and still make a profit. There may be ad opportunities for you to buy customers for $120 but you can’t take advantage of it because you’ll lose money on every one of those sales.
But your competitors have different customer lifetime values. If a competitor has a $150 lifetime value, then she can advertise in the ad opportunity example above and grow her business faster than you.
Now you can see why customer lifetime value is so important to your success and it should be your #1 priority if you’re struggling to get more traffic and you have hit a plateau with your sales conversion rates.
Here are a few ideas for how you can increase your lifetime value:
- Increase the price of your product or service
- Offer complimentary products and services after the first transaction is complete
- Offer a subscription or continuity service
- Offer joint venture or affiliate products or services after the first transaction is complete
Now you should have a clear idea for where you need to focus your marketing resources in 2012. If you need help creating a plan to take your business to the next level, then post a comment below or click here to contact us.
Have a Happy holiday and a fantastic New Year!