You don’t actually want more website traffic

Today I spoke with someone who is planning to launch a web-based business in a few months and challenged me to come up with a plan to get them 400,000 website visitors within a month of launching their website.

As with many “stealth startups”, they asked that I present a plan before telling me anything about their business. My response: it’s impossible. It’s not impossible for a website to get that much traffic in its first month–it’s impossible to present a web marketing plan without first understanding the business.

Of course, getting more website traffic is undoubtedly a good thing, but it’s not really the visitors that you want, it’s the business results that those website visitors would hopefully bring. Concerning yourself with the number of visitors your website gets can be misleading. It can make you do things that don’t get real results or it can make you feel successful when you, in fact, haven’t been. The number of visitors your website gets tells you nothing of the success of the website. We need to talk about key performance indicators (KPIs).

People often talk about website visitor statistics because it’s an easy metric to measure and remember. All sites have a traffic stat, regardless of the industry, market, or type of website, so it’s a kind of lowest common denominator. Services like Compete and Alexa try to help us estimate the traffic that other sites get, so we have a basis of comparison to gauge our performance against our competition when we don’t have access to other information about their business.

Every website exists for a purpose, but it’s not to get more traffic. The more specific you can be about the purpose of your website, the better. A website with a narrow focus makes it easier for visitors to understand what they can or should do on the site, and makes it easier for the owner of the site to judge it’s success, i.e. to measure the KPIs.

The KPI for your website depends on your market and your niche. It might be the number of leads generated, the number of newsletter sign-ups or the number of sales made. These metrics may likely correlate with the number of visitors, but the number of visitors your website gets is not a key metric.

Web traffic might be a key metric if you are running a news site, but even then I would bet that the real key metric is number of subscribers, number of shares/visit, number of ad clicks, or something similar. If your key metric is more than one mathematical step away from your profit, you haven’t found your key metric yet.

For example, suppose there are two websites: websiteA.com and websiteB.com. Their traffic stats look like this:

WebsiteA.com WebsiteB.com
Visitors/Month 5,000 500,000

Looking at the website visitor stats alone, you’d be right to want to be the owner of WebsiteB.com over WebsiteA.com given the choice.

WebsiteA.com WebsiteB.com
Visitors/Month 5,000 500,000
Conversion Rate 2.0% 0.5%
Conversions 100 2,500

Even considering the conversion rate, WebsiteB.com still looks like the winner. A conversion is when a visitor ‘converts’ to a lead, a sale, a sign-up, a share, or whatever your key metric is. WebsiteA.com has a much better conversion rate than WebsiteB.com, but due to the fact that WebsiteB.com gets 100 times more web traffic, it has 2,500 conversions where WebsiteA.com only has 100.

WebsiteA.com WebsiteB.com
Visitors/Month 5,000 500,000
Conversion Rate 2.0% 0.5%
Conversions 100 2,500
Profit per Conversion $125.00 $0.50
Profit $12,500.00 $1,250.00

But once you look at the real bottom-line results of the two websites, the actual profit generated, you can see that WebsiteA.com is the winner. The owner of WebsiteA.com is making a nice tidy living, while the owner of WebsiteB.com still has a day job elsewhere.

It’s also worth noting that getting more web traffic might not be the easiest way to improve the performance of a website. It might be easier for WebsiteB.com to increase its conversion rate to 0.6% rather than increasing traffic to 600,000 visitors per month, and get the same increase in profit. Or maybe there’s a way for WebsiteB.com to make $1.50 per conversion instead of $0.50, which would triple its profit without increasing web traffic at all.

Don’t get hung up on the number of visitors your website gets. There are tons of scammers who will sell you junk traffic when what you need are customers. What good would 400,000 website visitors be if your conversion rate was 0%?

Like I said, if the metric you are setting as a goal is more than one step away from profit, you haven’t found your key metric yet. And you can’t create an online marketing plan before you understand your key metric. But there’s more.

Once you can clearly state your key metric, we need to understand who your audience is. Who is the website designed to convert? This stuff will be abundantly clear if you’ve planned your business properly.

A good business plan starts with a real problem that is suffered by real people who will pay to solve that problem with real money. But too often discussions of SEO and social media revolve around getting more traffic to your website when the real issue at hand is generating more business. Do you tweet? Do you use Facebook pages? Have you used LinkedIn ads before? Well… yes, but what are we trying to achieve? We can’t decide what the right tools are for the job before we know who the target market is, where they are, how they are best engaged, and why they should care about you.

Then we can figure out how to get 400,000 visitors a month, but whether or not that’s possible depends on the size of the market and how amazing your solution is… but that’s another story.

How long does it take to build a business?

Thinking of quitting your day job to start your own business?

Jacques Mattheij wrote an interesting article, It Takes Three Years To Build A Business, where he describes what you should consider when thinking of quitting your job to start your own business. In his article, he states that it takes about three years to establish a profitable business because it takes this long to build your reputation, build a network, and have enough trust and customer references behind you to be able to attract enough new customers.

However, he is referring mostly to starting a consultancy or service-based business. In online businesses things are different. It might still take three years or so, but it can be done much faster. Some people spend years writing and refining their business plan. But this kind of research can be endless, and in the long run more detrimental to your progress than just jumping in and getting started. Here’s why:

Online businesses can be started for (almost) free

In a traditional bricks and mortar store you need a location, furniture, inventory, insurance, and much more. Starting an online business can be as easy as launching a website–and launching a website is getting easier to do every day.

You can build your own business website very quickly

There are some really amazing tools available that let anyone build an online business without any technical knowledge required. It always helps to speak a few extra languages, like CSS or HTML, but increasingly we are seeing more great tools available that let people focus on their product, and on marketing and customer service, and have the technical stuff all taken care of.  Shopfiy and Volusion are two great examples of e-commerce website builders. If you are thinking of starting an online business or web store, you should have a look at these.

Test, refine, repeat

The online world is inherently measurable. You can run small, inexpensive experiments to see what works before going too far in the wrong direction. Website analytics can be used to track nearly every important metric in your business. A/B testing lets you see which messaging, design, copy, logo, layout, price, etc. works best.

Start with your best guess, gather the data, then refine. It’s very satisfyingly scientific when done right, and can quicken your path to success.

Domains age like wine

Don’t wait another minute before staring your website! Two important factors that the search engines take into consideration are your domain’s age and its in-coming link profile.

If you’ve got a good idea of the kind of business you want to start, and have done your keyword research, then you should be ready to register some domain names. All things being equal, domains that have been registered longer have an advantage over domain names that just popped up yesterday. So start aging yours now.

Then, get your website up, even if you only put up a placeholder page that has nothing more than a few sentences describing what you’re planning to do, and an email sign-up form or some other way for people to be notified when your business kicks off. That way you can be collecting leads and building links even before you’ve launched your business.

Do it now!

Ferris Bueller: life moves pretty fast; if you don't stop to look around once in a while, you could miss it.To paraphrase Ferris Bueller: things move pretty fast; if you don’t start now you could miss it. Your really good business idea from 2008 is now a whole ecosystem of businesses. That’s how fast things change online.

The early bird gets the worm, and it’s never been easier than it is today to actually do something about your business idea.

Even if it will take three years to get your business going, will that be three years from someday, or three years from today?

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