Point. Click. Profit. (As published in The Business Journal)

Calculating Web-based Revenue Goals

Web Revenue

If you’ve ever tried losing weight, you know that the first step is to create a baseline–measure your current pounds in order to measure your progress at two weeks and then four weeks. The same principle applies to growing sales on the Web.

Assuming you’d like more leads and sales from your website visitors, the most effective approach is to systematize your online marketing efforts and measure the results, in terms of visitors and conversions.

If you’re not measuring this yet, start by exploring Google’s free Analytics service at http://www.google.com/analytics. Just login with your Google account, create a profile for your website, and Google will give you a small block of code and instructions on where to add it to your webpages.

Once that’s in place, you’ll be able to see not only the numbers for the volume of visitors but their interests and demographics: which pages are most popular; how long are they spending on the site; where are they visiting from, geographically; what search terms did they query in order to find your site; which social network did they click over to your site from?

Traffic is just the starting point. The most important metric is the number of visitors who become customers. This is known as your conversion rate. If 10,000 people visit the site and 100 of them complete your contact form, your visitor-to-lead conversion rate is 1%.

Of course, completing a contact form doesn’t have to be the goal. You can measure conversion rates for clicking a product order button or a download link to a case study. Whatever the case, try to get some contact info in return, so you can nurture the lead into a customer.

Once you’re measuring, then it’s time to plan your growth. You’ll need some numbers to get started:

  • How many visitors are coming to your website each month?
  • How many are contacting you through the website?
  • How many of those leads become customers?
  • What is each potential client worth to your business, on average?
  • How much revenue, in terms of new leads, would you ideally like to see coming from the website?

The goal with using these numbers is coming up with the amount of time and energy needed in order to reach your revenue target from your online channel. The three main variables are the number of incoming visitors, the percentage of those visitors who express interest in becoming customers and the percentage of those leads who end up buying from you.

To figure out your goals, start with your revenue goal. Let’s say you’d like to get to $50,000 per month in new revenue from Web leads. Each new customer is worth $5,000 in average revenue. Currently, you’re seeing a 1% visitor-to-lead conversion rate and a 2% lead-to-customer rate. With a 2% lead-to-customer conversion rate, you’d need 500 leads each month to reach your target. Back up one step further, and you’d need 50,000 visitors per month.

But these are variables, remember. We can influence them, and that’s the place to start. If we aim to double our lead-to-customer rate to 4%, say, that reduces our monthly leads needed to 250. If we can push our visitor-to-lead rate higher–say, to 5%–that slashes our monthly visitors needed down to a more achievable 5,000.

Obviously, these numbers vary by industry and business, but the principles are clear:

  • Set goals for how much revenue you want to bring in from the Web
  • Based on the value per new customer, work your way back to figure out your traffic needs
  • Your traffic needs will vary based on your success in converting leads to customers
  • Once you know your traffic target, you can craft interactive campaigns that engage your audience toward putting new leads in your pipeline

Just don’t get so sucked into your content marketing that you forget to hit the gym. You can show off that figure in your next Web video.

 

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