If you’re like me, then you receive emails every day about the latest and greatest online marketing tactics.
In most cases, the topic is search engine optimization (SEO), but sometimes it’s pay per click advertising, social media marketing, media buying, email marketing, Facebook advertising, Twitter strategies, email autoresponders and broadcasts, website optimization, website usability testing, or any of the other thousands of online marketing strategies and tactics available to you.
It’s overwhelming and the natural response is to either try to consume all the information all at once or store it away in a folder that you’ll never revisit (because who ever has “free time”?).
But you can’t ignore it.
Online marketing is a must for most businesses nowadays.
And you can’t possibly try to learn everything all at once…
So the only logical solution is to prioritize based on what is going to have the biggest impact on YOUR business right NOW.
And in this article I’ll help you do just that. First, let’s break up “online marketing” into the 3 core parts:
- Lifetime value
Every strategy and tactic can fit into those 3 buckets. You’re either trying to get more traffic to your website, convert more visitors into customers/clients/patients, or you’re trying to increase the lifetime value of your customers.
The question is which area do you need to focus on right now. Let’s walk through each one and at the end you should have a clear idea for where you should be spending your time and money.
Most business owners think traffic is the #1 priority. They believe more traffic will automatically equal more customers.
However, that’s not always the case. It’s possible to invest a lot of time and money into sending more traffic to a website that does not convert visitors into paying customers. So traffic is not always the answer.
Traffic should be your focus if you’re in one of the following two situations:
- You just started your business
- You already have a website that consistently converts visitors to paying customers so you know how much a visitor is worth.
Obviously if you’re just starting out, then traffic must be your #1 priority. There’s no point in focusing on conversions if there are no visitors to convert and there’s no lifetime value if you have no customers.
My recommendation for new business owners is to invest in paid search traffic like Google AdWords, Bing, and Yahoo first. It’s a good idea to set up the foundation for search engine optimization (SEO) and social media, but don’t focus all of your energy on these strategies in the beginning.
Start with paid traffic because you’ll have more control to drive consistent, targeted prospects to your website. Mastering paid traffic will also make your life easier when you move on to optimizing for conversions.
The alternatives, SEO and social media, typically take too long to set up (i.e. in competitive markets SEO can take 6 – 12 months) and neither allow you to target prospects as precisely as paid traffic. For these reasons I usually do not recommend these strategies for startups.
Now, if you’re not a startup and you already have a website generating $X dollars per visitor then you are in an excellent position. Your focus should be to find EVERY traffic source where you can buy visitors for less than $X dollars.
Here are some options to get you started:
- Paid search – AdWords and Bing/Yahoo
- Display ads – AdWords, Bing/Yahoo, Facebook, 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
Keep testing the until you find all the traffic sources that will generate visitors for less than your value/visitor. Then once you have exhausted your options, move on to Conversions below.
If you already have traffic to your website, but no sales or very few sales, then your #1 priority is to improve your website conversion rate.
There are 2 reasons why your conversion rate is so important:
- Improving conversions will increase your revenue WITHOUT any additional investment in advertising. So improvements here have a direct impact on your profitability.
- Higher conversion rates = lower cost per sale = MORE traffic and even MORE sales. As you increase your conversion rate you’ll be able to buy more and more traffic that you may not have been able to afford before. So you’ll generate more traffic and even more sales as a result of the conversion rate improvements.
For more information about how to increase your conversion rates, read “The 5 Crucial Elements to Increase Website Conversions”
Ultimately, the lifetime value of your customers will determine the success of your online marketing.
As I said earlier, you’ll be able to buy more traffic as you increase your conversion rates. However, eventually you’ll hit a wall where you can no longer optimize to reduce your cost per sale.
At this point you need to focus on increasing the value per sale in order to expand your online marketing. This is how you can truly dominate your marketplace and leave your competitors in the dust.
For example, if the lifetime value of your customer is $500 and this is typical of every other business in your industry, then there’s no way you or your competitors would buy traffic where the cost per customer is $600. That would be ridiculous.
But if you found a way to increase your lifetime value to say $1,000, then it may make sense to buy customers for $600. This will allow you to expand your advertising where your competitors simply can’t afford to go. If they try to compete then they’ll drive themselves out of business.
But you’re probably wondering how you can increase the value of YOUR customer.
Here are some suggestions to get you started. Not every idea will be applicable to your business, but I’m sure you can implement at least one of these to improve the lifetime value:
- Increase the price of your product or service – this is the easiest way to generate more money per sale
- Offer additional products and services after the first sale. For example, if you’re in the roofing business, then you could offer siding, gutter, and/or window services after you complete the roofing job.
- Offer a subscription or continuity service. Again, if you do home repairs, then you could offer a maintenance subscription program to make it easier for homeowners to keep their homes safe and clean.
- Offer partner products or services after the first transaction is complete. If you don’t want to expand your own list of products and services, then partner with another business and receive a commission on each sale you refer.
I hope you now have a better idea for where you should be focusing your time and money with regards to online marketing.
Post your comments below.