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Casual Articles - Uncovering the Web Profitability Equation to Surge Your Website's Performance
Despite the increase in individual personal debt, Americans continue to spend record amounts for consumer goods. As Internet retailers continue to thrive, enterprising entrepreneurs are finding new ways to cash in on the online shopping phenomenon. Over the past several years, there has been a sea change in the way that website owners generate revenue from online retail shopping. These entrepreneurs have never carried inventory; in fact, they don't sell products at all. Instead, they have found ways to capitalize on the online shopping habits of those who visit their websites. In the dot-com boom years of the 1990s, websites could generate enormous revenue from banner advertising. Companies were willing to pay top dollar to get potential customers to click on banner advertisemen
The essence of the Web Profitability Equation is a continual process of thoroughly understanding your customer. As Paco Underhill states,
“Where shoppers go, what they see, and how they respond determine the very nature of their shopping experience. And all of these psychological and anatomical factors come into play simultaneously, forming a complex matrix of behaviors which must be understood of the retail environment is to adapt itself successfully to the animal that shops.”
By attracting your perfect customer through the right advertising and serving them your offer from the right angle on your website, you will increase your profitability. The better you understand your customer, the greater your business success. As “Why We Buy – The Science of Shopping” concludes,
The overarching lesson that we’ve learned from the science of shopping is this: Amenability and Profitability are totally and inextricably linked. Take care of the former, in all its guises, and the latter is assured. Build and operate a retail environment that fits that highly particular needs of shoppers and you’ve created a successful store.
Address both sides of the Web Profitability Equati
Surprisingly, so many business owners think that marketing is the process of simply getting your name out there. However, once your name is “out” there, what are you going to do next? Let’s examine the fabric of a basketball game for a moment. You have the face-to-face competition of two opposing teams trying to win the game they are playing. They came with “one” goal in mind and that is to win! Now, they have to do the following things better, in order to defeat their opponent:1. Strategize (A doable plan on how to defeat their competition by studying their strong and weak areas)2. Practice (Diligently working on their strategy to defeat their competition, capitalizing on their weak areas)3. Execute (Implement the plan that they’ve religiously practiced to ultimately defeat their
Today more than ever, stakeholders ranging from Wall Street, to Boards, to private investors demand higher and quicker returns on their investments. The question though is how?
The “Web Profitability Equation” provides the structure to answer “how” for your website. The Web Profitability Equation is simply calculated as:
Advertising Traffic (quality) x Website (conversion rate) = Profitability
All online marketing strategies flow through this equation. Unfortunately a majority of marketers spend their time on the lefts-side of the equation and pursue strategies to generate more and more advertising traffic to their websites.
Certainly this approach generates a level of results just as a business closing more sales generates greater revenue. However, just like a business, more sales don’t equal more profits if the operational costs consume all of the sales proceeds. Likewise, more advertising traffic to your website may generate incremental sales but if your website doesn’t “convert” the traffic, a greater number of your visitors abandon your website as an operational expense.
In his national bestseller, “Why We Buy – The Science of Shopping”, author Paco Underhill pinpoints the essence of the Web Profitability Equation while discussing his findings in a traditional retail setting. He states,
Marketing, advertising, promotion and location can bring shoppers in, but then it’s the job of merchandise, the employees and the store itself to turn them into buyers.
Your website or custom-developed “landing pages” is an essential strategic element to your website’s success. It is as important as the type of advertising you perform and deserves an equal level of attention and commitment. Your website’s ability to “turn” visitors into prospects and customers (a process called “conversion”) enables you to achieve results. As Paco Underhill continues to explain,
Conversion rate measures what you make of what you have – it shows how well (or how poorly) the entire enterprise is functioning where it counts most: in the store.
By focusing your attention on converting greater numbers of visitors, your website becomes more “operationally efficient”. And as with a traditional business, a $1 gain in sales only delivers a percentage increase to your bottom line profits while a $1 gain in operational efficiency delivers a full $1 addition to your bottom line profits.
However, as the Web Profitability Equation shows, a balance has to exist between quality advertising traffic and website conversion. Too much attention especially advertising hinders the other. Ideally, by optimizing both sides of the equation, you reach the highest levels of profitability.
Let me demonstrate this further through examples. Let’s assume that you have $5,000 to spend on advertising. In Example A. you focus on your advertising strategies and reduce your costs to $0.50 per visitor through shrewd management of your paid search campaigns. In example B. you spend the same amount on advertising but pay attention to only increasing your website’s conversion rate. It achieves solid financial results but at a greater expense than Example C. where you focus on shrewd paid search management AND increasing your website’s conversion rate.
Which one would you choose?
EXAMPLE A.
Focus on Advertising EXAMPLE B.
Focus on Conversion EXAMPLE C.
Focus on Both Sides
Advertising Cost $5,000.00 $5,000.00 $5,000.00
Cost per Visitor $0.50 $1.00 $0.50
Number of Visitors 10,000 5,000 10,000
Website Conversion 0.5% 3.0% 3.0%
Number of Sales 50 150 300
Average Sale Price $50 $50 $50
Revenue $2,500.00 $7,500.00 $15,000
Profit - $2,500.00 $2,500.00 $10,000.00
Cost per Sale $100.00 $33.34 $16.67
The combination of quality traffic and website conversion equals higher profits. This is a basic concept yet has powerful strategic value. For example, paid search using Yahoo! Search Marketing or Google Adwords provides superior advantages to marketers. However, most marketers focus on increasing their click-through rates and expanding their keyword lists versus re-designing their websites (or using landing pages) to convert greater numbers of paid search visitors.
By balancing your efforts you can also compete in a competitive search market and afford more expensive media placements. The Web Profitability Equation shows that by increasing the quality of your advertising traffic and increasing the conversion rate of your website’s offer - you will generate more sales at a lower cost. Why? Because you are wringing out the waste from your online sales process - visitors not relevant to your offer.
The essence of the Web Profitability Equation is a continual process of thoroughly understanding your customer. As Paco Underhill states,
“Where shoppers go, what they see, and how they respond determine the very nature of their shopping experience. And all of these psychological and anatomical factors come into play simultaneously, forming a complex matrix of behaviors which must be understood of the retail environment is to adapt itself successfully to the animal that shops.”
By attracting your perfect customer through the right advertising and serving them your offer from the right angle on your website, you will increase your profitability. The better you understand your customer, the greater your business success. As “Why We Buy – The Science of Shopping” concludes,
The overarching lesson that we’ve learned from the science of shopping is this: Amenability and Profitability are totally and inextricably linked. Take care of the former, in all its guises, and the latter is assured. Build and operate a retail environment that fits that highly particular needs of shoppers and you’ve created a successful store.
Address both sides of the Web Profitability Equatio
There is a way to generate a steady stream of income. What is it you ask? Google AdSense. Google AdSense is a marketing campaign that pays you for every time somebody clicks on a advertisement, on your website or blog. If you have your own website with traffic already, this will generate extra cash immediately.Know if you don't have your own website, don't worry. All you have to do is set up a blog. This is extremely easy to do. there are many free site to set up your blogger account. It is usually a point and click system. (no html knowledge needed) There are many benefits to having a blog verse a website. The low cost or no cost. The easy to use controls. You can set up your AdSense account right threw blog design template area.Now, just by having these ads on your website (blog site)
In his national bestseller, “Why We Buy – The Science of Shopping”, author Paco Underhill pinpoints the essence of the Web Profitability Equation while discussing his findings in a traditional retail setting. He states,
Marketing, advertising, promotion and location can bring shoppers in, but then it’s the job of merchandise, the employees and the store itself to turn them into buyers.
Your website or custom-developed “landing pages” is an essential strategic element to your website’s success. It is as important as the type of advertising you perform and deserves an equal level of attention and commitment. Your website’s ability to “turn” visitors into prospects and customers (a process called “conversion”) enables you to achieve results. As Paco Underhill continues to explain,
Conversion rate measures what you make of what you have – it shows how well (or how poorly) the entire enterprise is functioning where it counts most: in the store.
By focusing your attention on converting greater numbers of visitors, your website becomes more “operationally efficient”. And as with a traditional business, a $1 gain in sales only delivers a percentage increase to your bottom line profits while a $1 gain in operational efficiency delivers a full $1 addition to your bottom line profits.
However, as the Web Profitability Equation shows, a balance has to exist between quality advertising traffic and website conversion. Too much attention especially advertising hinders the other. Ideally, by optimizing both sides of the equation, you reach the highest levels of profitability.
Let me demonstrate this further through examples. Let’s assume that you have $5,000 to spend on advertising. In Example A. you focus on your advertising strategies and reduce your costs to $0.50 per visitor through shrewd management of your paid search campaigns. In example B. you spend the same amount on advertising but pay attention to only increasing your website’s conversion rate. It achieves solid financial results but at a greater expense than Example C. where you focus on shrewd paid search management AND increasing your website’s conversion rate.
Which one would you choose?
EXAMPLE A.
Focus on Advertising EXAMPLE B.
Focus on Conversion EXAMPLE C.
Focus on Both Sides
Advertising Cost $5,000.00 $5,000.00 $5,000.00
Cost per Visitor $0.50 $1.00 $0.50
Number of Visitors 10,000 5,000 10,000
Website Conversion 0.5% 3.0% 3.0%
Number of Sales 50 150 300
Average Sale Price $50 $50 $50
Revenue $2,500.00 $7,500.00 $15,000
Profit - $2,500.00 $2,500.00 $10,000.00
Cost per Sale $100.00 $33.34 $16.67
The combination of quality traffic and website conversion equals higher profits. This is a basic concept yet has powerful strategic value. For example, paid search using Yahoo! Search Marketing or Google Adwords provides superior advantages to marketers. However, most marketers focus on increasing their click-through rates and expanding their keyword lists versus re-designing their websites (or using landing pages) to convert greater numbers of paid search visitors.
By balancing your efforts you can also compete in a competitive search market and afford more expensive media placements. The Web Profitability Equation shows that by increasing the quality of your advertising traffic and increasing the conversion rate of your website’s offer - you will generate more sales at a lower cost. Why? Because you are wringing out the waste from your online sales process - visitors not relevant to your offer.
The essence of the Web Profitability Equation is a continual process of thoroughly understanding your customer. As Paco Underhill states,
“Where shoppers go, what they see, and how they respond determine the very nature of their shopping experience. And all of these psychological and anatomical factors come into play simultaneously, forming a complex matrix of behaviors which must be understood of the retail environment is to adapt itself successfully to the animal that shops.”
By attracting your perfect customer through the right advertising and serving them your offer from the right angle on your website, you will increase your profitability. The better you understand your customer, the greater your business success. As “Why We Buy – The Science of Shopping” concludes,
The overarching lesson that we’ve learned from the science of shopping is this: Amenability and Profitability are totally and inextricably linked. Take care of the former, in all its guises, and the latter is assured. Build and operate a retail environment that fits that highly particular needs of shoppers and you’ve created a successful store.
Address both sides of the Web Profitability Equati
A lot of seminars have been given about good leadership qualities and how to manage franchisees. But with all these information and different ideas about what a good franchiser leader should have, I have narrowed it down to six key elements that I think is what a good franchiser leader should have as the success of a franchise network depends on the franchiser leader and his relationship with his franchisees.A good franchiser leader should have a clear vision. Although this has been said a thousand times, this is true. He must have an accurate vision of what his franchise network should be.A good franchiser leader must have integrity. This is especially true if you want your franchisees to trust and respect you as these two are needed for the success of any franchise network.A
However, as the Web Profitability Equation shows, a balance has to exist between quality advertising traffic and website conversion. Too much attention especially advertising hinders the other. Ideally, by optimizing both sides of the equation, you reach the highest levels of profitability.
Let me demonstrate this further through examples. Let’s assume that you have $5,000 to spend on advertising. In Example A. you focus on your advertising strategies and reduce your costs to $0.50 per visitor through shrewd management of your paid search campaigns. In example B. you spend the same amount on advertising but pay attention to only increasing your website’s conversion rate. It achieves solid financial results but at a greater expense than Example C. where you focus on shrewd paid search management AND increasing your website’s conversion rate.
Which one would you choose?
EXAMPLE A.
Focus on Advertising EXAMPLE B.
Focus on Conversion EXAMPLE C.
Focus on Both Sides
Advertising Cost $5,000.00 $5,000.00 $5,000.00
Cost per Visitor $0.50 $1.00 $0.50
Number of Visitors 10,000 5,000 10,000
Website Conversion 0.5% 3.0% 3.0%
Number of Sales 50 150 300
Average Sale Price $50 $50 $50
Revenue $2,500.00 $7,500.00 $15,000
Profit - $2,500.00 $2,500.00 $10,000.00
Cost per Sale $100.00 $33.34 $16.67
The combination of quality traffic and website conversion equals higher profits. This is a basic concept yet has powerful strategic value. For example, paid search using Yahoo! Search Marketing or Google Adwords provides superior advantages to marketers. However, most marketers focus on increasing their click-through rates and expanding their keyword lists versus re-designing their websites (or using landing pages) to convert greater numbers of paid search visitors.
By balancing your efforts you can also compete in a competitive search market and afford more expensive media placements. The Web Profitability Equation shows that by increasing the quality of your advertising traffic and increasing the conversion rate of your website’s offer - you will generate more sales at a lower cost. Why? Because you are wringing out the waste from your online sales process - visitors not relevant to your offer.
The essence of the Web Profitability Equation is a continual process of thoroughly understanding your customer. As Paco Underhill states,
“Where shoppers go, what they see, and how they respond determine the very nature of their shopping experience. And all of these psychological and anatomical factors come into play simultaneously, forming a complex matrix of behaviors which must be understood of the retail environment is to adapt itself successfully to the animal that shops.”
By attracting your perfect customer through the right advertising and serving them your offer from the right angle on your website, you will increase your profitability. The better you understand your customer, the greater your business success. As “Why We Buy – The Science of Shopping” concludes,
The overarching lesson that we’ve learned from the science of shopping is this: Amenability and Profitability are totally and inextricably linked. Take care of the former, in all its guises, and the latter is assured. Build and operate a retail environment that fits that highly particular needs of shoppers and you’ve created a successful store.
Address both sides of the Web Profitability Equati
Now in the world we live in these days I am going to tell you one thing! Thanks to the internet, improved transportation etc. now business ventures and networking can be done overseas easily and not only that business building can never be easier as well!! But why stop there? Sure chances are you are satisfied with the business and the number of clients you have attracted over the time but why not reach out internationally and worldwide?But in order to do that you need to learn new langauges such as Spanish and Japanese for instance. Well English is still the lingua franca of the world but still wouldn't you make a better impression in the networking world if you spoke with future clients or partners in their native language? It saying to them "Hi, I am an outgoing friendly social guy that
Cost per Visitor $0.50 $1.00 $0.50
Number of Visitors 10,000 5,000 10,000
Website Conversion 0.5% 3.0% 3.0%
Number of Sales 50 150 300
Average Sale Price $50 $50 $50
Revenue $2,500.00 $7,500.00 $15,000
Profit - $2,500.00 $2,500.00 $10,000.00
Cost per Sale $100.00 $33.34 $16.67
The combination of quality traffic and website conversion equals higher profits. This is a basic concept yet has powerful strategic value. For example, paid search using Yahoo! Search Marketing or Google Adwords provides superior advantages to marketers. However, most marketers focus on increasing their click-through rates and expanding their keyword lists versus re-designing their websites (or using landing pages) to convert greater numbers of paid search visitors.
By balancing your efforts you can also compete in a competitive search market and afford more expensive media placements. The Web Profitability Equation shows that by increasing the quality of your advertising traffic and increasing the conversion rate of your website’s offer - you will generate more sales at a lower cost. Why? Because you are wringing out the waste from your online sales process - visitors not relevant to your offer.
The essence of the Web Profitability Equation is a continual process of thoroughly understanding your customer. As Paco Underhill states,
“Where shoppers go, what they see, and how they respond determine the very nature of their shopping experience. And all of these psychological and anatomical factors come into play simultaneously, forming a complex matrix of behaviors which must be understood of the retail environment is to adapt itself successfully to the animal that shops.”
By attracting your perfect customer through the right advertising and serving them your offer from the right angle on your website, you will increase your profitability. The better you understand your customer, the greater your business success. As “Why We Buy – The Science of Shopping” concludes,
The overarching lesson that we’ve learned from the science of shopping is this: Amenability and Profitability are totally and inextricably linked. Take care of the former, in all its guises, and the latter is assured. Build and operate a retail environment that fits that highly particular needs of shoppers and you’ve created a successful store.
Address both sides of the Web Profitability Equati
You may have just completed your sales letter on your web site and preloaded your autoresponder with your messages. However you may not have thought about which internet payment system to use with your web site. If you are selling an ebook or downloadable software there are many options that you may want to consider depending on the product that you are selling. The most important thing being that you want to make it easy for your customers to order within three clicks and also want to protect your software if you are selling shareware products from being pirated.My favourite credit card processing system to use is Paypal. The reason for this is that many people will only buy online using this method. They already have their credit card details stored in Paypal and are too lazy to t
The essence of the Web Profitability Equation is a continual process of thoroughly understanding your customer. As Paco Underhill states,
“Where shoppers go, what they see, and how they respond determine the very nature of their shopping experience. And all of these psychological and anatomical factors come into play simultaneously, forming a complex matrix of behaviors which must be understood of the retail environment is to adapt itself successfully to the animal that shops.”
By attracting your perfect customer through the right advertising and serving them your offer from the right angle on your website, you will increase your profitability. The better you understand your customer, the greater your business success. As “Why We Buy – The Science of Shopping” concludes,
The overarching lesson that we’ve learned from the science of shopping is this: Amenability and Profitability are totally and inextricably linked. Take care of the former, in all its guises, and the latter is assured. Build and operate a retail environment that fits that highly particular needs of shoppers and you’ve created a successful store.
Address both sides of the Web Profitability Equation to serve the demands of your customers. By doing so, you are guaranteed a surge in profits and the sustainability of your web business.
Paco Underhill, Why We Buy: The Science of Shopping, (Simon & Schuster, 1999): 36, 44.
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