Most businesses fail online for various of reasons, lack of budget, not enough customers, not enough time to do the work, inability to adapt to the demands of the marketplace, or failure to test the business performance to get the job done.
Now, the last one, testing the business performance and see what actually works is a major business killer that’s within one’s control. The tools are out there, but the inability to utilize those tools is the thing that prevents you from succeeding.
What This Has To Do With Time Management?
If you do not know the performance of your business, and just have a rough idea of how things are performing (by emotionally estimating the value of your business – rather than seeing tangible metrics), then you are going to waste a lot of time doing the work, without getting any results.
What You’ll Learn?
In this article, you are about to learn how to prevent your business from dying, by testing different aspects of it. This is known as conversion testing and studying the online behavior of your visitors in order to improve it.
Identifying Your Goals
Having a business without clearly defined outcome is a major waste of resources (time, money and energy). We have to know WHY do we have our website running. Most of us do this, of course, to make money. But this is not a very specific outcome. We have to know the exact and specific results we want out of our business in order to have certain insight about the direction we want to take and reaching the destination we want.
With just “making money” isn’t going to get you anywhere, since it is too vague, and abstract things lose our attention and persistence very quickly. And often times we struggle with keeping the pace, just because there’s no specific and identifiable outcome in the first place.
So what’s your outcome? Here’s a video below to help you answering this question!
How To Do It?
Well, there are few steps or important points to consider, when it comes to measuring the performance of your web sites…
1) Front & Back End – simply, the “front end” is the place where your first interactions or first impressions prospects get from you, and the “back end” is follow-up process with those prospects. You want to know how your site is doing in terms of getting more people into your site, and how they interact with it. And those people who “converted” into your back end (which is joining your newsletter, membership site, etc.) they already raised their hand to hear more from you. That’s the back end.
You can measure the “front” and the “back” end with Google Analytics and Google Website Optimizer. I recommend getting your hands on the essential training Lynda provides for you. I think it is about $25 per month to access all Lynda’s training and tutorials, which is pretty cool. You can get the trainings here.
2) Cancels/Refunds/Returns – if you are selling any products online, you are going to get call backs. That’s inevitable. So you want to measure those as well. You can do this with the help of your shopping cart service that’s installed on your site. You can process those requests manually or automatically, depending on your needs.
3) Net Profit – now, this is not the ROI (or known as “return on investment”). The ROI can be easily manipulated, since it does not depend on the number of visitors you get on the site. That’s why you want to measure the net profit. And this is done by the following formula: (Revenue – Cost) = Net Profit.
4) Lifetime Value – let’s say you use pay per click with Google Adwords, and you spend $400 on traffic to a landing page. Let’s say after 6 months you make $900, because of those people who converted on that landing page, and the lifetime value is $900. But if you get traffic from another place, let’s say Yahoo’s pay per click service, and this time you pay $100 on traffic to a landing page, but after 6 months you get $1400 lifetime value in return. Both scenarios are working, but the second is quite better. If you do not track the lifetime value of your customers, you’ll miss that detail. You always want to see which system performs better, and neglect the ones that perform poorly over longer periods of time.
The Bottom Line Is…
If you do not measure the performance of your business with at least Google’s FREE, but powerful tools, Website Optimizer and Google Analytics, you do not know what you are doing, and sooner or later, you are going to find yourself in the waters where no land is appearing on the horizon.
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