Small Business Solutions on website design and SEO - SmartROI Consulting

Entries in Return on Investment (3)

Monday

Sep142009

Small Business Owners - Your website is talking, are you listening?

Monday, September 14, 2009 at 2:40PM

In our last blog (August 19^th - Power to the Small and Mid Size Business Owner), we covered the basics of why it is important to take control of your website with a Content Management System (CMS) website. Once you have designed a site that you really like, the importance of analytical data that measures the behavior of visitors to your site becomes paramount. As a business owner, or someone who has been put in charge of measuring the success of your company’s website, here are a couple of questions to ask yourself:

Are the analytical results telling me that I am targeting the right geographic area?

If your product or service is sold online locally, regionally, nationally, or even worldwide, you will want to make sure that all of your time, effort, and resources go into bringing in customers who you can actually reach and serve.

How many of my visitors are “unique”, and how many visitors are returning to my site?

It is important to measure “unique visitors” (different IP, or computer addresses) to get a sense of traffic and trends, especially if you are heavily relying on completely new visitors for your business model. For other types of business models, measuring customer loyalty or an interest in new content from previous visitors is more important.

What are they doing when they get to my site, and how long are they staying?

“Bounce Rate” refers to the ratio of the amount of people who leave after viewing just one page vs. the total amount of visitors. This number is relative, but it is a good indicator that visitors are finding your home page interesting enough to browse the content. If you have an e-commerce site, a poor Bounce Rate can be a big red flag, because visitors might be looking at your storefront but not shopping.

What are traffic sources of my visitors? How are they finding me?

If you are doing any type of paid search marketing (PPC), search engine optimization (SEO), e-mail marketing, or social media marketing, you will want to measure the value of the campaign so that you can get an accurate value for your return on investment (ROI). There has never been an advertising medium in history that allows business owners to so precisely measure their ROI.

What have I defined as “success”, and how many of my visitors are doing what I want them to do?

First, you need to define a “conversion”. Is it a sale? A donation? An expression of interest? A lead for a sales team? Once a conversion is defined, you need to measure how many conversions are coming in from your efforts. A “Conversion Rate” is the ratio of the number of conversions vs. your total unique visitors. This number is relative to your business model and industry, but it is valuable to benchmark and compare to your competitors and your own previously collected data. Businesses create goals based on Conversion Rates and watch mid to long term trends to get a true idea of a website’s success.

There are several ways that business owners can find the analytical data that they need. There are some professional consulting companies that work exclusively with medium to large sized organizations and specialize in analytics and web strategy. For most small to medium sized businesses, however, free applications like Google Analytics can provide a wealth of information. Many times this wealth of information can be like having a map when you are lost at sea, so it is best to get advice and opinions from colleagues in your industry before making decisions based on short term trends or questionable data. Some marketing companies that serve the small to medium sized business market, like SmartROI Consulting, can also help implement free analytics packages and help interpret the results.

Without some sort of measurement, you would have no idea how your website is working towards your goals. It is speaking to you loud and clear.

Are you listening?

SmartROI Consulting |

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Wednesday

Aug192009

Power to the Small and Midsize Business Owner

Wednesday, August 19, 2009 at 12:05PM

You have a new partner at the firm. You are offering a new service or special. You have moved and need to change your address. These are all common scenarios which require immediate updates to the information on your website. If this information is not accurate, it could result in a significant loss of business and revenue. As a small business or non-profit, these changes are most likely made by putting in a call to the webmaster (or “web designer guy”), even for a simple change.

The days of calling your webmaster and having them charge you $100/hour to be at their mercy are coming to an end. Websites are still extremely complex in their structure and take a seasoned developer to create, but making regular updates is as easy as changing a word document.

An unscientific poll that we ran asked if how many small and medium sized companies still have a traditional coded website vs. content managed websites, and the responses were overwhelming in the favor of a traditional website. Many respondents commented that they had heard that content management systems were very expensive and time consuming.

Converting to a Content Managed website will actually save most small to medium sized businesses both time and money. The turnaround time in which a webmaster returns your call, listens to your problem, and actually implements the change can often take several weeks. Most web designers are more interested in taking on profitable new projects rather than spending their time updating your text. Billing often starts at an hourly threshold, so many organizations find themselves “saving up” their web changes until they can justify paying the designer to make bulk changes.

Companies such as www.squarespace.com (of which SmartROI Consulting is an exclusive user), make things extremely easy for companies to manage their own site without CSS or HTML knowledge. WYSIWYG (What-You-See-Is-What-You-Get) Editors allow graphics based text, font, and image changes, all with a few familiar buttons and the ability to see your updates as they happen. Major advancements with content managed websites are also including simple plug-ins such as ecommerce, social media, “contact us” forms, blogs, flash elements, photo galleries, and so on. This means is that when your company is ready to add new features and technological advances to your site, a total redesign is not necessary.

So next time you pick up the phone to call your webmaster when you need that simple change on your website, remember that you could be making these changes yourself in a matter of minutes with a content managed site.

SmartROI Consulting |

Pay Per Click, Budgets, and Return on Investment

Tuesday, August 4, 2009 at 4:25PM

We have been having this discussion a lot lately with current and potential clients. How much should you invest into a Pay Per Click (PPC) campaign to get the Return on Investment (ROI) that you desire? SmartROI Consulting, LLC. advises people to go larger at first to see what the full impact can be then scale down or up accordingly once we have built significant data. Below is a simple formula to follow when calculating your ROI.

Start with the “Average Lifetime Value” of a customer. How much is a customer is worth over the period of time that you work with them? Do they make a one-time purchase, or will they be a loyal customer that may spend money with you every month of every year? For this example let’s take an average lifetime amount of someone who places an order with you every month, of which you earn $200 in revenue. If the average customer is with you for 5 years before they move or change needs, then this customer is worth $12,000 to your bottom line!

$200 x 12 months x 5 years = $12,000

If we want a 50% Return on our Investment, then we want to spend $10 to earn $15, or $100 to earn $150. In the previous example, if we spent $8000 to earn this customer, then we make $12,000 from them, which is a 50% return on investment.

How much would you like your website to earn?

The “Conversion Rate” of the site is a very important thing to measure. In order to find this, you need to use tracking and analytical data to source how many visitors are coming to your site, and how many of those are turning into paying customers. If you have 100 visitors to your site and 5 of them ‘convert’ into customers, then that is a 5% “conversion rate”.

If your goal is to bring in 10 new customers per month and your conversion rate is 5%, then you would need to attract 200 visitors to your site in order to turn 10 into paying customers.

How much do you need to spend on pay-per-click in order to bring in these 10 customers in? If we continue with the example above and each customer brings in $200 of revenue per month but is a customer for an average of 5 years, 10 customers are worth $120,000!

If a modest pay-per-click budget of $2,000 is spent per month to bring in $120,000, the Return on Investment is 6,000%!!!

There is no magic number or ratio to get your desired ROI, but search marketing including SEO and PPC has the lowest cost per lead than other popular forms of advertising. A study by Piper Jaffray shows Search marketing had a rate of $0.45 per lead followed by email at $0.55, Yellowpages at $1.18, banner ads at $2.00 and Direct Mail an astounding $9.94 per lead.

SmartROI Consulting |