Should you write new content to attract more traffic? Or maybe you could finally run that A/B test to improve your sales page? Or… would it be best just to raise the product price?
Sometimes it is hard to decide which aspect of a web business you should concentrate on. You want to improve all of them, but you don’t have resources for everything.
What if you could visualize your options like this?
Now it’s pretty easy to see that concentrating on improving the conversion rate would bring home the most money.
You can make a similar visualisation of your business targets today. It’s free and it takes just a couple of minutes.
Download Info-Product Revenue Projections for Numbers
Download Info-Product Revenue Projections for Excel (butt-ugly)
How To Use Revenue Projections
- Input your last month’s traffic, purchases and product price
- Set your targets
- Evaluate probabilities
- Evaluate costs
- Spring to action!
Set your targets
Set a reasonable target for traffic, conversion rate and product price. You’ll want targets you can actually imagine reaching in a meaningful timeframe.
It doesn’t matter what the averages in your industry are. You use information that applies to your business, today. It doesn’t matter what your final target would be. You don’t want to go too far forward in time.
What’s the “Change in Customer Count”?
Almost always, change in pricing affects the amount of customers you’ll have. In this example I’m raising the price by $10 (old price was $19) and assuming that people will get somewhat pissed off. As a result, I’ll lose 25% of my customers.
How did I came up with 25%? It’s just a guess. The more you know about your audience, the easier it is to guess how they might behave.
“Projections are bullshit.They’re just guesses.” - Jason Fried
Yes, projections are guesses. However, that does not make them worthless, just a bit tricky to use. Customer Life-Time Value (CLTV, CLV or LTV), one of the most valuable SaaS metrics, is a projection of total customer profits. Yet, no-one thinks that it’s bullshit!
When you are using projections, you’ll always have to remember that the real world behaves unexpectedly. The projections are only accurate if nothing else than the projected factor changes. That is often not the case. You’ll want to spend a little time to evaluate how probable it is that the projection is right.
E.g. You end up reaching your traffic target by buying ads. But… this new traffic converts at 1%, whereas your old traffic converted at 2%. Suddenly, you are not reaping the benefits you wanted.
This probability of the outcome is something that you’ll have to evaluate yourself.
How are you going to achieve your targets? While you’ll spend time improving conversion rate, who will be writing the content that keeps the traffic up?
This spreadsheet does not include costs. I wanted to keep it simple – but that does not mean that costs wouldn’t matter. Costs always matter.
While judging the results, always judge them against what each change costs.
Will taking up the A/B testing service eat up the revenue you’ll get from increasing your conversions?
Spring to action
It will be easier to focus after seeing the results and you’ll be ready to rock and roll!
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The small print: I’m just offering tools, not carrying any risks of the decisions made using these tools. Use your own discretion.