These days, most business owners and entrepreneurs are aware that they need to incorporate the internet and its associated strategies to remain competitive and indeed, simply to remain in business at all. However, after years at the cutting edge of internet marketing and assisting clients from small business to multi-national corporate organisations, I am still surprised just how many of them consider their internet strategies to be separate from their business’ marketing strategy and, indeed their overall business plan.
Internet marketing does not exist separately to your other business lead generation and customer service models. It should co-exist and complement every other marketing exercise you do. Similarly, there is little point having a fantastic and highly effective lead generation strategy to your website, if you fail to pick up the phone when all your new clients call to buy from you. Believe it or not, I have seen this happen.
When it comes to devising your business plan and incorporating internet marketing as part of it, it pays to go back and revisit the basics in business, as these indeed are important. Revisiting the basic business formula will help you determine which online strategies to use.
The most basic aim of business – any business – is to make a profit. If yours doesn’t aim to make a profit, then it’s not a business, it’s a hobby or a charity. Simple as that. Notice I said aim to make a profit. Obviously not all businesses do make a profit.
I like to consider that business consists of five main elements:
- Conversion rate
- Number of transactions
- Average dollar sale
As long as you concentrate on these five elements to your business, you should expect a profit at the end of the month. When we put them together, what we come up with is in effect the formula for running a successful business.
If we take the number of leads we get each month and multiply that by the conversion rate, we get we get the number of customers we have. Then, by multiplying this number by the average number of transactions they each do and multiply that number by the average number of dollars they spend, we arrive at our total average turnover. Then, by multiplying that number by the margin, we get our profit.
This is what that formula looks like:
Leads x Conversion Rate = Customers x No. of Transactions x Average Dollar Sale = Turnover x Margin = Profit.
By concentrating on and improving each of the elements to this basic formula, you will dramatically improve your eventual profit. How you go about doing that depends largely upon your own personal desires as well as the industry you are operating in. For instance, you may not enjoy door knocking, so don’t use this strategy to gain more leads. Similarly, you wouldn’t use TV advertising if you wanted to reach dog owners in your suburb. Nor would you consider using Google AdWords if you wanted to reach pensioners who played Bingo in your neighbourhood.
This is the formula you need to always keep in mind when planning, carrying out and monitoring your internet marketing strategy, that forms part of your business plan. Ask yourself how your internet marketing is affecting the number of clients placING enquiries, whether they buy from you and the amount they spend each time.
This is exactly what I did when I first become involved in the world of internet marketing to grow my own business. My first experience with pay-per-click (PPC) marketing was during my efforts to ramp up bookings for my corporate magic business. At the time, I was using the traditional methods to market my business and reach my target market, such as the local print directory for Brisbane, Melbourne and Sydney, visits to agents, sending out flyers as well as anything else I could conjure up to generate bookings so I could feed my family and pay the bills. My marketing efforts were having a small impact on my bottom line, so much so that I wasn’t able to survive. Then I came across the Yahoo Search Marketing Platform and everything changed. Within a month of putting ads up on the search engines my business was profitable! Almost immediately I began generating a steady flow of enquiries and bookings and best of all I didn’t need to knock on doors or lick stamps. All I needed to do was wait!
The thing that excited me about my new-found lead generation tool was this: I could also track every ad view, every visit to my site and every enquiry I received down to the last cent! It truly transformed the way I did my marketing overnight. When I look back, knowing what I know now, until the advent of search marketing I really had no real idea of which media was working and which wasn’t, and I had no real way of improving or changing the ads easily even if I did know what was working. This was because my original ads were of the old-fashioned ink variety and were contracted to long terms; basically I was guessing with no way to fix my uneducated guesswork if I got something wrong. The sad fact is I didn’t know any better advertising, but online advertising changed all that.
We now have the ability to determine which pages viewers of our website most often look at, how long they spend on each page, and exactly which page they are on when they leave. We also know what Google AdWords ad receives clicks, how many and when. By analysing this data, we know which strategies to spend money on and what to change.
The online marketing industry has now expanded and evolved and now includes things like social media, blogging, YouTube, display advertising, SEO, article marketing, PPC advertising, affiliate marketing and email marketing to name but a few. Each of these is now a discipline in its own right. They all have their own unique strategies for building and gaining more online business, which makes it even harder for businesses nowadays to decide which approach is best for them. We’ve come a long way from the days when a business just needs to know how to build and submit a Website to Google so that it can be found, generate leads and produce sales. In today’s modern world of Internet marketing, the average business person finds they need much more in the way of research, advice, education and strategy development to truly succeed by choosing which of these online media their business should focus on.
A well-written business plan should aim to incorporate the online marketing strategies most relevant and effective to their industry and customer base. And, most importantly, there should be time and budget allocated to measuring and analysing each strategy and method. The tools are most certainly available, now it’s up to you!
–Ben Bradshaw is one of Australia’s online marketing and Google Adwords pioneers.