Mmm Traffic! Understanding Traffic In Your Small Business Marketing

When I was in high school, I got a job at a shoe store in the mall. While I was there the mall had a promotion where they brought in two male soap opera stars to sign autographs in the center of the mall. Cars were lined up for miles with throngs of (literally) screaming teenage girls packing the place.

What a dream come true for the mall right? Not exactly. We had zero paying customers that day. And none of the other stores did business either. The prospect of parking a mile away from the mall and wading through a crowd of screaming young girls scared away anyone who would have come to shop. The mall makes a portion of each stores revenues - so the expense of the promotion and loss of sales was probably quite large.

Today that mall is floundering. They have failed to properly promote and support their retail stores. They continue to promote to senior citizens and teenagers who have very little disposable income. They have lost at least one major anchor store and many of the smaller stores. The place is empty most of the time.

The Marketing Comet Principle - Not all traffic is equal.

This is the same for foot traffic as well as web traffic (web site visitors). If you are a small business, getting too much web traffic may not be a problem for you. For a large business - too much traffic can crash their systems.

Let's look at traffic another way. Many companies spend a lot of money to build traffic. You can go broke taking out pay per click ads on Google. But how many visitors are you turning into customers? Let's run some numbers:

I create a pay per click advertising campaign for my web site selling a product with a 37 dollar profit margin. I spend 75 cents per click to get relatively targeted traffic to come to my site. I need to convert 1 out of every 49 clicks into paying customers to keep a minuscule profit margin. This is a 2% conversion rate - which is pretty big on the web.

Now let's say I own a boutique that sells $400 purses ($200 profit). I look at saving some money on advertising by taking out an ad for a 10% off sale in a local circular that targets college students - that ad costs $600. From the ad 25 college women show up to the store and only 2 of them can afford a purse at 10% off ($400 profit minus 10% = $360). I spent $600 to generate $360 in profit and build brand equity with people who can't afford what I sell.

Small business marketing must be as tightly focused as possible. You can't waste your resources pitching to people who don't want or can't afford you. Sure it's great to be famous, and get tons of traffic. If it's not increasing your profit it's a waste of time and money.

J D Moore - Marketing Comet

Comments

[Orikinla Osinachi]

I gained a lot from your advice.

Merci!