More traffic = more sales?
That’s not always true.
It’s easy for business owners to get caught up in vanity metrics. Observations like, “My organic traffic is up 25% this month!” feel amazing.
Did your sales also go up 25%? Maybe. Maybe not.
What’s already working?
Before you dive into SEO – or any marketing strategy – you need to analyze what you’re already doing well. Most businesses don’t have the resources to run several social media accounts, send out weekly email blasts, write blog posts and, on top of all that, provide the service or product(s) that pays the bills.
The lowest hanging fruit for any marketing strategy is to identify what you’re already doing well, then do more of it.
Even if you don’t know what you’re doing well, that’s ok. As long as you’re using Google Analytics or a similar platform, you can use the data to find hidden gems before you start spending money on marketing.
What problem am I trying to solve?
My business, OneStepRemoved.com, caters to traders, especially those in the currency markets. It has 2 main sources of income: programming and product sales.
Programming accounts for more than 75% of the revenue, but is the least desirable part of the business. If someone doesn’t have any idea, then I don’t have any programming to sell them.
The sales cycle for custom programming is largely dependent on high volatility in the market, something that only happens 10-20% of the time. Otherwise, it’s crickets.
The goal of selling products is to stabilize some of the earnings. It’s not a perfect fit, but at least customers can purchase products at any time.
OneStepRemoved.com’s industry, the forex market, is one of the most competitive on the internet. Businesses on Google AdWords pay up to $35 for a single click. A typical cost to acquire a customer in America or the United Kingdom is around $1,500 per customer.
I don’t sell products that cost anywhere near $1,500. There’s a 0% chance that paid marketing would work for my business. Businesses competing for the same eyeballs can pay way, way more than I could ever afford.
Where is it realistic for me to compete?
But… my site does get a respectable volume of organic traffic. If I get more organic traffic, could I use that to grow my business?
Let’s take a look.
What you’re looking at is how long it takes organic traffic to convert into a sale. It’s rare for someone to hit the site and immediately pull out their credit card.
A typical visitor on my site follows the same type of funnel that most businesses use.
- The user visits the site
- They stumble across a free giveaway, then exchange their email address to receive the gift
- The customer receives emails encouraging them to buy a low-cost product, which is often called a tripwire
- Approximately 10% of customers will buy the low-cost intro product
- Then, ideally, you have a big ticket item for sale
The graph shows me that the average buyer is taking 36 days to go from an initial visit to buying. This is also broadly representative of the entire site because most of my new visitor traffic comes from organic search.
The problem for my business is that not all organic search traffic is the same. Broadly speaking, I create three types of content that appears in organic search.
- A generic article about some aspect of forex trading
- An update on my own trading
- A free indicator or tool, which the user can also download in exchange for their email.
I suspected that blogging was a horrible use of my time, but it wasn’t until I crunched the numbers that I realized that I was putting resources into the wrong type of traffic for selling more products.
Free indicators and tools seemed to perform better because there’s a complete funnel embedded from start to finish. The user lands on the page, enters their email and immediately sees a relevant offer.
So, I decided to look at how well the third type of organic traffic – free indicators and tools – correlated with my revenue.
That looks really encouraging!
The image shows that the peak effect of organic traffic to free tools occurs on the very same day that they visit my site. Cool!
A typical blog post either costs me $85 to produce, or in the case of the ones that I write myself, 8 hours of my time. Those types of posts generate 94.3% of the organic traffic.
Free indicators or tools are only 5.7% of my overall organic traffic. And, just like the blog content, they require about 8 man hours of work.
Is pursuing the free tool organic traffic worth it?
Let’s consider the cost me to make more “free indicator” content. And, more importantly, how much do I expect to make off of that content?
There are a total of 9 pages that fall into the free tools category. Assuming that each page took 8 hours to produce, then I spent 72 hours making that content. Combined, the pages generated 6,129 visits over the past year.
6,129 visits / 72 hours = 85.125 visits per year for every hour spent producing free tools.
5% of the 85 visitors will convert into leads (10.6 leads).
10% of the leads will convert into sales (1.06 sales).
How much does your product cost? Among my current product line for tripwire sales, the average price is $27. The expected value added from organic marketing is 1.06 sales/hour * $27/sale = $28.62/hr.
$28.62/hr, especially for the amount of time it takes for the money to come in (a year), is not worth my time. Not even close.
The average page value of a tool per year is $28.62/hr * 8 hours = $228.96.
If I could pay someone $75 to produce each page and do the email capture (which is realistic), and then I spend 2 hours writing copy and managing those people, then that would be about $75/hr for me. That’s getting a lot closer, and might be a good project for me to work on during slow seasons.
A note on methodology
You may have noticed that the correlations in the graphs are low. Values of 0.5 are generally considered moderate. Values under 0.2 are typically considered noise. Why am I ascribing value to my correlations when the numbers aren’t high?
My sales numbers are not smooth. They are crazy volatile. To help make the graphs more intelligible, I created 30 day rolling sums of revenue and then compared that to 30 day rolling sums of organic traffic. Averaging has the effect of smoothing the curve, but also lowers the strength of correlations.
If I wanted to show strong evidence mathematically, I would bootstrap my revenue and organic traffic numbers, then apply that same rolling period technique to the random samples. Sampling my existing data would allow me to create confidence intervals for each lag time. If the correlation exceeded 99% of the smoothed, random samples for a given time lag, then it’s reasonable to assume that the analysis is valid.
I intentionally skipped creating confidence intervals because most business owners don’t care to get into the nitty gritty of statistical analysis. That and it’s my business – the findings confirm what I already suspected was true.
I’m not making any high-risk business decisions based off of this article. If I expected to make a high-risk decision (or really wanted to know), then it would make sense to show this analysis sits on a mathematically strong foundation.
Are you throwing away money on your marketing?
Organic traffic mostly goes to content, not sales pages. Content costs time and money to produce.
When I was considering expanding my organic traffic to sell more products, it was with an eye to doing the work myself in down time. After doing the analysis, it became clear that my time is better spent elsewhere.
Does it feel like your marketing isn’t working like it should? Let’s do a deep dive into your business. Call me, Shaun Overton, at (817) 714-6929 or email me at email@example.com.