A simple ROI calculation for Internet Marketing.

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Twenty-Third E-Webstyle.com SEO Podcast July 17th 2009. Third page of Transcription

Chris: Yeah, you did a little analysis for her, I think, regarding her counseling costs and how much she was going to spend on that Yellow Pages.


Paul: Yes.


Chris: Can you run through that?


Paul: Well first thing, when she said ‘I’m thinking about marketing using a Yellow Pages service just to put me in some online directories’, they also have partnerships with some search engines, they’ll do her PPC and I said ‘okay, well let’s talk ROI here because it’s all about your return on investment.’ She was going to spend $450 per month, her main product costs $30 per month. Whipped out a quick calculator, comes out to 16.6 sales to recoup the cost. Well, we’ll go ahead and round that to seven. Seventeen new sales per month to pay for her advertising, that’s a break-even point. So at that point I’m like okay, ‘do you think that ATT could deliver that?’ I shouldn’t say that company name, but ‘do you think that company can deliver that?’ She didn’t really know so I tried to break it down. Let’s think about this, how much traffic do you need to bring in a … how many impressions do you need?


Chris: A new client.


Paul: Yeah. You know, how many impressions do you need to bring in a click? How many clicks do you need to bring in a sale? Let’s go over all this. It really, just the numbers didn’t work out. I said you know, ‘expecting to get 15 new sales from day one of marketing your website … it’s just not likely with your current pricing structure and with the type of services that you provide. I do think that you can market your website and make money with this service, just not the way that you’re currently doing it.’ So we had to talk a little bit about her packages, her business, and really, this was just talk about ROI. It wasn’t marketing, it wasn’t SEO.


Chris: Business structure.


Paul: Yeah, it was just, is this going make sense? If you spend this money and you’re expected to bring in you know, not as much money as you’re going to spend, let’s re-think your structure, let’s re-think how we can make this profitable for your company. Everyone should do that. You know, no matter what your product or service is, if you’re going to market, think about your ROI. I think we say that all the time.


Chris: Yeah.


Paul: It’s about ROI.


Chris: I think it’s a really simple calculation. Hopefully, most people are doing it and if you’re not, hopefully this discussion we’re having really lends you in the direction of doing it. Which is basically, if you’re going to spend some money on advertising or you have this understanding that you’re going to start a business or you’re in a business and it’s got some fixed costs, some fixed monthly costs, you need to just stop and say okay, where do I make my money and how much of that do I need to sell? If it’s a subscription service, how many subscriptions do I need to have? How many you know, books do I need to sell? How many sessions do I need to sell if you’re some sort of therapist? Understand what that number is so you have a target so that you have full faith that the plan – the marketing plan and the strategy that you have in place together with your website and search engine optimization and everything that you’re thinking of doing – is going to cover those costs. Let’s face it; we’re not in business … no one’s in business to cover their costs. Is it going to make you the profit? Is maybe, you’re going to get some residual customers from one month on to the next month and you can anticipate that some percentage is going to grow your business, that’s great, but you have to have some sort of strategy that’s going to pay for your business you know, from day one. Really you know, a lot of people talk about how businesses … you shouldn’t expect to make any money and I just don’t believe that. I think you really should get involved in a business and get involved in it in the right way so that it’s making you money from day one. You know…


Paul: Yeah, and you found … who was that guy that you found that … he found a great business where he started, he said for nine – 10 bucks?


Chris: Yes, it’s Steve Pavlino [sp] or something along those lines, I can’t pronounce his last name … sorry! It’s because I don’t remember how it’s spelled. But, we happened upon … I was you know, during lunch I always stumble upon finding new programming techniques, finding new business ideas and self-help stuff, and I happened across his website. He’s got a really good Alexa rating, and he talked about his business; his second business. Now his first business, he said he threw a lot of money at it and learned a whole lot of stuff. His second business, he said ‘I’m going to start this with nine dollars and fifty cents.’ That was his cost at the time for a domain name. He wasn’t going to invest any more money in it until it started making money. He just grew his business that way. Like I said, it’s got a really good Alexa ranking, like 10,000, which is a phenomenal number. So yeah, design your business so that it’s going to make money from day one because you can actually do that. So on this website we can … we’re give…


Paul: Yeah, and I can go over some other points. Basically, with this particular business owner, she was affiliated with a church and with her church she had started some ministry to help people doing some counseling. She got licensed to do counseling so now she’s doing counseling. One of the big major issues with her site is that her ministry affiliated with her church is all over her website and then her products, her counseling services, and her eBooks, things that she’s written, are also on her website and it really looks like a marriage of a business and a Christian ministry. That to me, this is like a classic example of mixing your business with your…


Chris: Pleasure.


Paul: With pleasure, yeah, with your personal life. I recommended, I said ‘hey, I think these are both great things that you’re doing. I would recommend that you separate the personal things away from the business and let’s focus on the business. I understand that your ministry helped you start in this business, but I think that people when they see a .org domain name, they see there’s a lot of you know, church related things on your website, they may stay away from it even though they might need your services. So a classic example of mixing business with pleasure; I would recommend you don’t do it. That was a recommendation, let’s bring the business to the forefront and let’s let people know you sell products and services which, was not there. She did not have any calls to action on her website, nothing that says…


Chris: She’s got one on the very first page. It says, “Advertise with Us”.


Paul: She has about four sections blocked off for someone else to advertise and something I told her son, not her; I didn’t get the chance to tell her this…


Chris: Get those off of there!


Paul: Yes. If you want to advertise, if you want to sell spots on your website, hey, go ahead if it brings in extra money and it doesn’t take business away from you and you do it properly, that’s your business.


Chris: So how is it that she’s going to send people somewhere else and it’s not going to take business away from her? Can you explain that?


Paul: Probably not. That won’t happen. Probably won’t happen.


Chris: You are being very diplomatic in your explanation.


Paul: Yeah, it just, and I’m like, she needs to take that off of there. Don’t put “Advertise With Us” on there.


Chris: When you don’t have that to begin with, like even if you don’t have ads, you might have one of them, you don’t have it the way … and really this looks like a bit of a template and so…


Paul: It has to be.


Chris: …whoever put the template together just left, ‘hey look, these are places that people could advertise with you.’ You know, that sounds really good. You’re like, ‘oh, I can make money’. The reality is you need to have some substantial traffic to make money and if you’ve got products of your own, services of your own, then you really shouldn’t be sending people to other places other than like, highly-credible, fact-finding places.


Paul: Yeah, and I’m… True and I’d say you know, if you got the traffic where HP wants to buy an ad? You know, you’re probably…


Chris: Yup, you’re doing well.


Paul: Exactly! You’re doing very, very well. So you know, a big company … if Yahoo wants to buy ad space, and I’m not talking like, Ad Words space or you know. A large company ‘hey, I want to purchase a spot on your…’ Dell wants to buy advertising space on your website then hey, you’re doing something right if they’re coming to you. You have serious traffic. But the little “Advertise with Us” logos, I said ‘hey, let’s drop those right now. It’s a brand new website; let’s focus on the business, not on trying to make money from other ways outside of the business. So let’s focus on that. Let’s bring your products and services to the forefront.’ There’s nothing on her website that lets me know she sells these particular products and services. There is one link that says “eBooks” and then on that particular page, each book, there’s no way to pay for the book.


Chris: No way to purchase it, yeah.


Paul: There’s no way to purchase it. She’s going to work with PayPal and I said ‘hey, that’s fine but…’


Chris: It’s interesting also, sorry to interrupt…


Paul: It’s alright.


Chris: …it’s interesting also because there’s not even a phone number.


Paul: Yes.


Chris: Right? So why even have this section up? There’s no phone number to call. Like if somebody wanted to order this book or buy this book…


Paul: Well, it’s not on the site at all.


Chris: Oh, there’s no phone number at all?


Paul: No! That was another thing; you’ve got to have your contact information. She didn’t have a phone number; she did have an email address. But see, it’s some basic things we talk about on this podcast often. Calls to action; let’s make them take action right now … didn’t have a call to action. Contact information, not on every page. No way to call, no way to write a letter to. No contact form where someone could submit a question to, some basic things that I said ‘hey, let’s start with the basics.’ I’m trying to think what else. She had put her content on the site.


Chris: She does have Meta tags. I’m looking at her source code, she’s got some Meta tags.


Paul: She’s got some.


Chris: Her keywords are not useful. I think, you know, as with a lot of people, they start a website, they start the web thing kind of thinking ‘okay, the description and the keywords are about me’ or whatever. The reality is how many people are going to search for her, at least in the early stages? Assuming her name should be … well you don’t even have to bother putting her name because as long as her name is in the text then you know, it’s probably the only place it’s in the text and so she’ll show up in the search engines. It really needs you know, your keywords in her situation need to be about the message, the mission. You know, those things again, that are going to drive people, through searches, to her website. There’s a lot of great things we can do with this particular website. Once we get it cleaned up we’ll…


Paul: We’re going to take off. You know, after sitting and explaining with her, you’re going to need to make some changes, she was hesitant. Her son, whose kind of work as her internet consultant, was hesitant. But now they both understand, ‘these changes will help me convert the traffic in to sales.’ They’re going to have to spend some more money, and now they’re agreeing to it, somewhat, but it’s going to be worth it. So don’t be afraid of that. Don’t be afraid to have to spend more money to make your website convertible, saleable, whate-, give me … you pick the…


Chris: Yeah, to convert traffic…


Paul: To convert traffic in to sales.


Chris: …in to your desired result, which in most cases, is sales.


Alright, well that’s our podcast for today, thank you guys for listening. We want to remind you that we do upload a podcast every week. Usually it’s on Friday; I think next week it’s going to be on Thursday because I’m going to be leaving out of town.


Paul: Okay.


Chris: We upload a podcast every week, so come back and check us out. Look for that new podcast. We’ve got a lot of great podcasts in the past, so go ahead and check those out.


Paul: Keep sending questions.


Chris: Yup! Keep sending questions!


Paul: Questions, answers, requests…


Chris: Those questions you can send to podcast@E-Webstyle.com and thank you guys for listening. Until next time, I’m Chris Burres.


Paul: And this is Paul Hanson.


Chris: Bye-bye for now.

Author: eweb-admin