Tip #5. - Websites - I Built it, but will they come?

The true purpose of a web site is not, for a professional firm which provides a service, to make sales.

The actual purpose is to provide information to assist in the sale or hire by a prospective client.

What do we mean? It may help to start with the history of the web site, as such history applies to PI and Process firms. Remember your first time on the web? Was it before 1997? Or was it after 2000?

We need to start in 1995 to understand why we think of web sites the way we do.

Remember hearing about the guy who made a "web site", and became a millionaire overnight? Like all good urban legends, it has some footing in reality. The truth is, early web sites got most of the traffic, because there were simply few destinations for web surfers. Of course there was far less traffic, but it was enough, such that the first Process Server to make a web site, was successful in generating sales because he was the only one. Same for the first movers amongst PIs, Experts & Lawyers.

So the first web sites, which were for the most part, glorified brochures, worked to generate leads and sales, simply because they existed. The early years were truly a, "build it, and they will come" era. But like the bronze age, while certainly an improvement on the stone age, it has passed, and expecting a web site to work, in and of itself, is a thought process that best indicates a fossilized brain.

Fast forward, to 2006.

Why has this changed? Well, first there are now thousands of web sites for every profession, covering every region, and blanketing all corners of the web. Imagine your firm is a zebra. And that the zebra is standing on the plain all by itself. The lions are going to have to fight over you. That was a web site in 1996. Now imagine you are standing in a heard of 1,000,000 zebra. Even if 10,000 lions descend upon you, and each gets a zebra, your odds of being eaten is only 1 in 100!

There are now billions of web pages, on tens of millions of sites, and growing. It is now the era of "build it, and some might trickle in". You need to position your web site to be found. (Useful is good too, but not at issue in this post.)

Ever hear of Las Vegas? Big destination, lots of people like it, yet they advertise like crazy. Hmmm, what can we infer? If they stop competing to "get the word out", you'll soon fall in love with Miami, New York, or Milan. Why? Because somebody is going to fill the vacuum, because they know that advertising brings visitors, and visitors have dollars.

So, you need to "get the word out". What does this really mean? It means you must learn to compete in the market of information. Ideally, we all want to find the cheapest product, from the closest source, that perfectly fits our needs. And sometimes we do, but usually we need lots of information to do that. Thus the more accurate, or "perfect" your information, the more likely you are to find the product or service that most fits those criteria.

The same works for your customers. Have you ever subcontracted work to someone in another area, and later learned that there was someone who could have done it both better and cheaper? Why didn't you use them the first time? Your information wasn't perfect. You still got the job done, because you had information, but you could have profited more had your information been better.

So in order to make others use your business, you need people to have information about you. And they need to find that information. Better, even if you're not the cheapest (or the best), if you're the only one anyone knows about, or finds, you'll get the work. So you need to be found.

And this is what a web site is, your chance to present your "information" for other's consideration. Of course they need to find it. And, that is the point. Unless you promote your web site, it will just be a trickle. Business don't grow on trickles.

So, building a web site is a great idea. And, it is pretty much expected of most businesses. But making it into a sales tool, requires that you help visitors find it. The more targeted and interested those visitors the better. (We'll talk about that in our next post).

You should seek out sources of traffic for your web site, and capture them. You need people who need your services to have information about you, and so you need to help them find you, and not your competitor. If you can do that, sales will follow.

So a web site was once a means to an end, that rested close to the beginning of the means. It was like the first neon sign in Vegas. It is now more in the middle of the process, because now that everyone has neon, you need to educate people to look for and read your neon. A web site needs visitors, and by itself, most small business web sites don't attract visitors on their own.

So if you built it, they will come, but only if you actively promote it. (Remember Vegas?)

Tip #4 - What's a Customer Worth? - Hint: Forget the sale!

Forget the sale. Don't obsess about the sale, obsess about the customer instead.

Easily said, we know. And we realize that each sale is important. But when you are trying to evaluate your marketing budget, knowing the value of a sale is only one aspect of measuring the true value of that marketing budget.

Let us say that you have noticed, that on average, that most attorneys use you only once, and that some, after sending you the first piece of work, are good for ten more a year on average, year after year. What is the lifetime value of that customer?

When you determine the true cost of marketing, you need to know your average customer's lifetime value. You could calculate it like this.

Let's say you have 10 new customers a month. And, that 7 of them will only use you once, 2 of them will use you 3 more times, and 1, on average will use you 20 more times.

Now let's assume the average profit on a sale is $35.00. So you profit $350.00 a month on new customers. You've also discovered that your spending $400.00 a month on marketing costs. Time to cut back!

WRONG.

You have to look at the average lifetime values. Let the letter y represent average number of times a new customer uses you. Thus y will equal either = 1, 3, 20 in this example.

The 7 new customers that use you once are worth 7 x 35 x y (1) for a total of $245.00
The 2 new customers that use you three times are worth 2 x 35 x y (3) for a total of $210.00
The 1 new customer that uses you twenty times are worth 1 x 35 x y (20) for a total of $700.00

So once you know the lifetime values of your average customer's profit over time, you will know that your $400.00 in marketing is actually generating $1155.00 in profit.

You're still ahead, even without the prized customer that will use you 20 more times! (but only $55.00)

So in summary, it's not how many sales you make, but also how many times a customer makes repeat purchases that must be factored in. Also, what percentage of your new customers make a word of mouth referral? What's the value? The equation can get bigger, but this is not an algebra blog.

So remember, you can't go by your "gut". Figure out those lifetime averages. You might actually discover you want to increase your marketing budget, even if you sell less (the first time) to new customers than you spend to acquire them.

Tip # 3.1 How do I know if my website advertising works?

In our previous post, Tip #3 How do I know if my advertising works? we explored some models for tracking results. We also identified that a big problem with the tracking is actually figuring out how people found you. Remember, they often don't know either. (If you didn't read Tip #3, you might want to review it before going forward here.)

If you have a web site, do you know if it works? If so, how well? Do you know how many actual people visit it each day? Do you know how they found your web site? Do you know how they move around on your site? Do you know what percentage of people hit the back button without going anywhere on your site? Should we keep asking rhetorical questions? No. Could we? Yes.

If you're not tracking these statistics, you simply might as well not have a web site. There are dozens of programs that will do this for you. You can use Webtrends, Google Analytics (formerly Urchin), Analog, or a dozen other tools. We personally recommend Analytics.

Let me give you an example. I can pull a report for any page on the Rominger Legal web site. I can see where people came from, what keywords they typed into the search engines, how long they stayed, and where they went on the site. So by way of example, from April 2 to 9, 2006, the front page alone, of the Rominger Legal Private Investigator Directory, was viewed 2,634 times.

Those 2,634 views were the result of 2,109 distinct visitors over those 7 days. (Some folks viewed the page more than once.) 66% of those visitors came from Google, the top 2 reported keyword phrases were (not surprisingly), "private investigator" and "private investigators". The number one domestic city of origin was Los Angeles, and the top foreign city was Lima. Over 1,400 visitors had DSL or Cable Modems, and over 300 were still on dial-up services. Almost all of the visitors had FLASH 7.0 or better installed.

I think you get the point. We can do this for each of over 70,000 pages. We know how people find our web site.

We also do the same for one of the sites we track, www.pennsylvaniaprocess.com. We know that more than 50% of that site's traffic comes from it's link in the Rominger Process Server Directory. What that means is that we can assume that about 50% of the new customers who tell Pennsylvania Professional Process Service (PPPS) that they found their web site, came as a result of their Rominger Ad. The remainder of the traffic for PPPS comes from the Google and Yahoo search engines. So we know that they are sending PPPS business too, from nonpayed, organic search results.

You can also take it a step further. Not only can we see where someone found one of our sites, we can also track what percentage sign our web forms. So we might for example know that 11% of the people sent to us from ask.com for the keyword, "advertise process server" sign up and ask how to advertise with us, but that only 3% sign up with the key phrase "advertise process serving". Where would you invest your future efforts?

So remember, if you advertise your business or web site on-line, and you don't track it with a good tool, you're not in a position to say whether your pay per click adverting, or your directory advertising is benefiting you. So, get a good program in place, like Analytics, and get to tracking. You won't be sorry.

Tip #3 How do I know if my advertising works?

Hmmm, we've never heard that question before. Humor aside, it probably is the number one question any business owner asks (aside from how can I reduce payroll costs). So here's the answer.

Well, actually, if we could answer that question with certainty, we wouldn't be writing this blog, but rather collecting royalties from our absolute corner on every market everywhere. See, nobody can predict with certainty how well any particular advertisement will work. There are just too many variables, and each of them is constantly changing.

Of course, you may respond, "Well even if you can't predict what will work, once I bought an ad, it should be easy to track". And if you said that, you are either a true marketing expert (like Don Smith) , or you haven't bought too many ads.

See, the problem is to fold. First you have to track. Second you have to get accurate results from your tracking. If you can do both you'll start to be able to evaluate your advertising. We paid a consultant to talk with our advertisers, and you know what she found out? The more carefully our customer tracked all their advertising, the more likely they were to renew, and be happy with our PI and Process Directories!

Let's try tracking ad responses first. First, you need to track your raw responses. You need to ask every caller where they found you. Say you put an ad in the NAPPS docket sheet magazine, how may people contacted you as a result? Let's say you carefully ask each phone caller for the next month, and 11 of them say "the Docket Sheet", now you know for X dollars, you got 11 calls in the first month.

So it's X divided by 11! Well, no. What about the 32 web site visitors you had in that month. Did any of them get your web address out of the Docket Sheet? And the 5 e-mails, were they from the web site, or from your e-mail address in your ad, or worse did someone go to your web site, because of the ad, and then e-mail you from there, or call you from the number on the web site, rather than copying it from the ad? And, how many people lost your ad, but remembered to type Pennsylvania Professional Process Service into a Google search?

How many leads did you get from that Docket Sheet ad? Actually you don't know for sure, so it too is a variable (let us call it Y). So your cost per contact (lead) is X divided by Y! Wow... that helps. "Hey Bob, we only spent X/Y dollars for this call"!

And, even if you ask everyone in the world where they found you, they won't report it accurately. They lie. Many people who find your web site, by any means, will say they found you in Yahoo or Google, even if they made seven or eight clicks between the search results and your web site.

By way of example, we have a Court Reporter who advertises with Rominger Legal, and has no web site. She said if she did, she wouldn't know what to think about where her business came from, because most people say they found her in Google. But we are her only online presence!

Most large advertisers expect more than 20% of all consumers using traditional medias to report incorrect data about where they found out about a product or business. The ease of movement on the web complicates the matter even more. The fact that many people blur their web experience, often not realizing when they have changed sites (or more importantly, not caring), means that most people usually identify their portal of entry as opposed to the actual page or site where they found a business.

So what do you do? Well you keep tracking, and calculating. Don't be daunted, but do be persistent.

See, if X is your ad cost, you'll always have that. Just look at what you pay. And Y, as a function of contacts isn't impossible either. First, it cannot be more than the actual number of contacts you get. So if you have 32 contacts in a month, from all sources, Y is less than or equal to that 32. Tracking hard will increase your certainty of Y's various sources.

If we advertise on Google, Rominger Legal and the Yellow pages, we might be able to sort out which works best, or, more typically, we might know that about 65% of new contacts are from all the advertisements, and 35% are client referrals. So X = the cost of all three, and Y equals 65% of our new contacts.

If X= $200.00 per month and Y = 20 contacts per month, we have 200 / 20 * 65%
or $200 / 13. That's about $15.00 per lead.

Wow, now were done. - No? hmmm? Remember, you just figured out what a lead or call costs.

But what does a sale cost? If we're hired by 1 out of every 4 leads, our cost per sale is $60.00. If you're a process server, unless its Hague work, you'ld better retool. If your a $55.00 dollar an hour gumshoe, and your average ticket is $1365.00, you might want to spend more!

Of course, why are you only converting one out of every four? Is it that the leads are soft? Or, are you overworked, understaffed and voice mail dependent, and usually don't call people back in less than twenty minutes, let alone three hours? (maybe that should be addressed in Tip #4)

So, to summarize. Ask, ask, ask. Track, track, track. If you want to know what works you and your staff must ask everyone where they found you. We call people all the time, and amazingly, very few ask where we found them! What a lost opportunity.