It’s the TRAFFIC….Stupid!

It's the TRAFFIC...Stupid!

View this photo It's nothing more than the famous shell game and your job is to be trained on what to look for.

There are 3 shells. Shell 'A' contains TARGETED TRAFFIC. Shell 'B' contains UNTARGETED TRAFFIC and Shell 'C' is hocus pocus NO TRAFFIC at all or the quality is so bad it has the same result.

Let's say you buy 1000 visitors and you are willing to pay 10 cents each for a $100 investment. With group 'A' you can close 10 sales and you make $100 per sale. A closing ratio of 1 in 100. You made $1000. With Group 'B' you made 1 sale. A closing ratio of 1 in 1000 so you broke even but you made a customer who hopefully return and that of course has value. Group 'C' of course produced nothing and if you buy it 10 more times you will have nothing 10 more times. Closing ratio is......

So with 'A' your $100 turned into a $1000. RIGHT DIRECTION!

With 'B' you broke even. No direction at all but there could be a CHANCE at some future business.

With 'C' you got the shaft and few even ever know it. So there is ample amounts of 'Shaft' available. Want more? If not....you MUST learn about traffic.

Now this is one side of the equation. The next step is to focus on the website and see if you can increase your closing percentages. If you could tweak it and double the revenue you would create 2 things. Demand for more traffic of equal quality and you would be willing to pay more for it which is why I as a domainer am so interested in this happening. Now be careful. If you buy the traffic under shell 'C' you will be tweaking with no possible way of ever improving it and THAT us why TRAFFIC is the name of the game. Once you truly understand traffic, you can sell virtually anything on the net. So with the widgets.com example yesterday and the traffic illustration today, you shoud be able to clearly see both sides of the equation. If you can see it you can tweak it.

So back to my example....if you double your closing rate and end up with 20 sales and make $2000 for your $100 bill you are likely willing to up that offer and you may up it to the point where you buy as much of that traffic as you can find.

While all that is going on you are still getting the benefit of the customer returning to buy more but you have increased your odds by 20 fold. You are growing your business. You are likely growing your business at the expense of the other guy. And guess what? That is okay!! The bi-product of all this is I have also just given an example of a value of a domain that varies by a HUGE amount when you can match the traffic with the right website. So that is the reason when folks sell a domain based on 'X'....my big question is WHY?
Have a GREAT day!
Rick Schwartz



7 thoughts on “It’s the TRAFFIC….Stupid!

  1. kamal

    Rick,
    Good points. Some smart people have also taught me the value of creating multiple versions of the website and tracking to see which version converts better, what the user does on the site, then using the data to refine the site, then repeat, do the same, then repeat.
    Until, in the end, you have a site that is finely tuned and optimized.

    Reply
  2. owen frager

    That’s quite a picture. First in the future (actually now that Apple TV box is here), the web is a TV medium.
    1) That feed could be coming from a domain as all TV shows will via IPTV.
    How does that change the equation? It means there will be variable formats, not just 30-minute and hour-long shows. Basically you’ll have a channel that’s programmed just for you. If consumers are consuming TV that way, advertisers will follow.”
    According to researchers and Richard Rosenblatt, everyone will have their own stations but they will feed content in licensed from broadcasters who may license the domains to track success.
    So it’s possible that could be bob.tv but featurng your”daddy” feed and those picture in picture feeds all tuned for Bob’s audience. So….
    2)Your name looks great in a TV world, says what it is and is memorable. Does everyone own names that will fit these new needs to the letter like that?
    Maybe this will be the True Hollywood story (Biography channel) domain of the future for Danni Lynn and Pak Joli-Pitt and all the others like them that will grow up and look back. What kind of traffic would be drawn to the domain then?
    So many examples of what a domain can do when start with smart choices.
    Then use the inititial traffic to add value with demonstrated success/

    Reply
  3. Derek Prueitt

    Great points Rick. It’s all about getting to know your traffic, what they want, and providing it better than anyone else does.
    To modify one of your own quotes, if I get $2.00 a click on a private jet related link, and that click generates a 10m sale at a modest 5% GP for the seller, somebody didn’t get the better side of the deal, me! Of course, being realistic, it may take 20,000 clicks at $2 a piece before that merchant makes a sale, so the cost per click is divided into that. Fair enough so far, but what if someone else’s private jet site is dumped on Sedo and my private jet site has valuable information about pilot licenses, the pros and cons of owning vs going fractional, an active forum of private jet owners sharing tips and active development? Their page dumped on Sedo is diluting my CPC.
    Bring on quality algorithms. Bring on ‘google slaps’. Bring on CPA. Time to develop.

    Reply
  4. Craig C

    Thank you for making your blog a little more readable by using a smaller font size. It would be even better if you eliminated either the left or right column to increase the width of text area. Thanks.

    Reply
  5. MG

    Rick,
    I choose shell”C”
    It is the cheapest.
    Just figure out why they came, and sell them that.

    Reply
  6. Kay Bowe

    Rick,
    I am happy to see PSA on CNN. Specifically,”Teens texting and driving segment. I think this will increase awareness of the need to focus on driving and not multi tasking.
    Suggestion: Would you consider another PSA regarding road rage?

    Reply

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