When asking business owners for goals many of them will automatically mention revenue … for example the website needs to generate $250,000 worth of business … $500,000 or a $1,000,000 plus.
Knowing this helps me to understand where you want to be, why you want to be there… helps me also … however let’s leave that aside and focus on the revenue side and let’s work out how to generate $100,000 from your website.
The first question we need to ask, is how much is the average customer worth to your business over their lifetime. Let’s assume a modest $5,000 shall we… and apply it to this formula…
Revenue Required Divided by the Average Revenue per Customer gives the total number of customers required.
$100,000 / $5,000 = 20 customers
That’s right, to generate $100,000 requires just 20 customers.
Now that we understand how many customers you require to meet your goal, we now need to look at leads and conversion rates. Based on experience I know that conversion rates can be maximized using conversion rate optimization, however for the purpose of our example I’m going to purposely be over optimistic and assume that our conversion rate of leads is just one percent and apply it.
Customers Required Divided by your lead conversion rate equals the number of leads required.
20 customers / 0.01 equals 2000 leads
Now we need to work out how many visitors to the website we need to generate all of those leads. Based on visitor to lead generation historic figures we can work out exactly how many website visitors are needed. Let’s give you two examples … a modest one percent and a more normal three percent… again these figures vary from website to website and can be optimized for better performance.
Leads required Divided by percent equals visitors required.
2000 leads / 0.01 = 200,000 visitors
2000 leads / 0.03 = 66,667 visitors
So, in our example we need to generate between 67,000 – 200,000 visitors to achieve our revenue goal of $100,000 dependent upon our lead conversion rate, and as I love conversion rate optimization I love to see these visitors number to sales achieved targets drastically reduced. However let’s work out how to generate visitors shall we.
There are basically two ways to bring visitors to your website, the most obvious that every business owners knows about is advertising, the second is less well known but growing in popularity is content marketing.
To successfully advertise online you have to understand who your target audience is. You then simply advertise generally with Google AdWords’ or another Pay per Click solution to attract the attention of these people. In order to save costs and to increase conversion rates you need to have highly focused long tail based keyword advertising with fully optimized landing pages, incorporating A/B Split Testing to improve conversion rates.
As you would imagine it’s an easy task for someone like me to work out how much it’s going to cost in advertising to generate $100,000 in sales, let’s do just that, shall we.
Now, pay per click works by agreeing to pay a certain amount for each click through to your website, costs for this vary greatly dependent upon your business and the popularity of the keywords you are advertising under. For the purpose of this example let’s assume you agree to pay $1 per click through and the formulae we use is similar to those detailed above.
We still need to generate our 20 customers and for this example due to our AdWords campaign being highly targeted we can work with a conversion rate of leads of 2.5% which means we need to have 800 leads. We again need to generate these leads and this all depends on how targeted your Adword campaign is … but let’s assume that just 5% (this can go much higher) subscribe to something and become leads. This means that we need to spend $16,000 to generate the required visitors (16,000 visitors) to give the required $100,000 in sales based on these conversion rates.
I’m a massive fan of Content Marketing, which for those that don’t know is the writing of blog post for inclusion on your website. Businesses should ideally post a blog article at least once per day and these need to be targeted to their audience and include search engine optimization.
From experience I know that it takes approximately three to five months on average before a return on investment is generated, however once it is, it continues to build from then on out.
Using website designs as an example website, this website attracts 27,000 visitors per month from content marketing, this figure grows each month, which is the wonderful thing about content marketing and should I stop posting blog posts for a short while these visitor figures will hardly if at all drop… which gives many ongoing opportunities.
So assuming from our first example that we need to attract 67,000 visitors to our website to generate $100,000 would take approximately six or seven months to achieve, however each quarter thereafter you would attract a further 81,000 plus visitors … so in a twelve month period it is in theory possible to generate $300,000 in sales, dependent on conversion rates actually achieved.
How much would it cost to generate this potential $300,000 dollars in sales based on someone like you, doing all of the work involved such as content marketing, social media promotion, search engine optimization and some conversion optimization? Our cost for doing this is just $2,499 per month and includes the design and develop of a new website and all associated tasks, it also includes one blog article per day and for those wanting to achieve results even faster we do have a package with two blog posts per day which costs just $3,979.
This means that for a whole year it would cost you just $2,499 times 12 months giving a total of $29,998 and delivering a potential revenue stream of $300,000, again dependent on conversion rates.
As you can see from this article, modern website design such as we undertake here is so far removed from what most people think of as website design that I tend to think of it now as a complete online marketing solution, geared to generate measurable results, tied back most often to revenue generation.
If anyone reading this is interested in one of these packages, which aren’t currently advertised to the general public, please contact me personally and please play around with conversion rates your website is currently achieving to see what is and what isn’t possible.
Note: Since writing this article in September 2014, a lot of things have changed online… now more traffic comes from social media than it ever did from Google and best of all, the conversion of these prospects can now happen on social media itself… which boasts conversions on the website as more targeted website visitors are attracted from social media.