Testing For Success
Posted on April 2, 2003
Testing For Success
By Bob McElwain
The simplest path to a successful web business is to identify a great product that lots of people want. People you can convince to buy from you, rather than from others. Then discover where they hang out on the Web. And figure how to reach them.
Those new to the Web often overlook the above. For one thing, it takes more time and effort to define a product and target than most realize. Often more than beginners are willing to commit.
Having done the research, don't mortgage the farm and go hog wild. Quite the contrary. Follow the lead of major marketers. Build a simple, inexpensive test site and see if you can sell anything.
One Test Model
Think simple. A very plain no-graphics site. Only a few pages. Or maybe only one. Put your time into creating great copy tightly focused on your target.
The key is in the sales copy. If you're not good at this kind of writing, you may have to hire someone to create it for you. But not for a test site; costs are high. Shoot your own best shot and call it good. (For an excellent tutorial on this topic, visit http://www.adcopywriting.com. Joe Robson is tops in my book.)
Here's a very simple page I built for another purpose, then modified for this article. Use the ideas. Or copy the page and add your content.
You don't need the expense of a merchant account. PayPal or ClickBank will do fine for testing. While free hosting won't do, hold costs down. If your host doesn't offer good stats, visit a script site and pick up a free counter. (Never use one on a site that's for real, but for testing, this is a simple solution.)
Now scour the Web. Find sites drawing traffic that includes a pretty good percentage of the traffic you need. Arrange an advertising deal on the site or in the site newsletter.
This will cost. But trying to test with search engines is
tough these days. It takes months to get listed, and with the
popularity factors in use today, you are unlikely to get enough
hits within a reasonable time.
How Many Hits Do You Need?
100 won't do. You may make no sales at all. Or you may make 2 or 3. Three would be nice, for 3 in 100 is often considered excellent.
The catch is 100 hits is not a sufficient sample. Those hits that converted to buyers may be the sort of people your test uncovered almost by accident, people you are unlikely to ever reach again.
With anything less than a thousand, the likelihood of accurately evaluating your test site is low. 10,000 is considered minimum by many. But for a reasonably good indication, 1000 works pretty well. Of course, 2000 is better.
Suppose you paid $500 for your advertising and generated only $300 to $500 in sales. You have likely demonstrated it's time to find another product. Certainly you would not proceed without further information and major changes. On the other hand, if you generated $1000, cheer. You likely have a winner.
Tough decisions are needed when you make a profit, but not much. Suppose you grossed $700. $200 in profit is great, provided you are confident volume will remain high. And this is a serious consideration. Big timers know what to expect from such results. Without experience, you'll be doing a lot of guessing. Likely this is a bit low for most.
The CR (Conversion Ratio) Matters
If you generated 10 sales on 1000 hits, your CR is 1 in 100 or 1%. The thinking is tricky here.
Since you generated these sales from an ultra-simple site, you may feel confident a full blown site will increase the CR to 2%. On an advertising cost of $500, this means the cost per sale drops from $50 to $25.
There are lots of variables here, but common sense shows you the way in most cases. An ad cost of $25/sale won't do when selling a $20 product, but it will work fine for one at $100, provided your wholesale cost for the product is reasonable.
While advertising will likely remain the mainstay of your business, it is reasonable to factor in free traffic from search engines and directories, from link exchanges, and other ways in which you can interact with other sites.
So You Lose; Is This bad?
If you spent the time doing the research, then forked over $500 for advertising, and clearly demonstrated you have a loser, it's sure not good news. But do take heart. This beats the heck out of working and growing a site for two years only to find in the end that not enough people want what you offer.
How To Handle A Win
If you're satisfied with your results, still hasten slowly. Don't rush out and spend major bucks. Hit the search engines and directories. Find an artist to brighten up your site template without busting your budget. Maybe add a few pages to your site.
For example, Feedback and Tell A Friend pages continue to work effectively. And also consider adding some great content pages; both search engines and visitors like them.
Be sure your business plan is solid. Then continue step by step, building an ever more profitable site.
So What If You're Not Sure?
This is the common dilemma. Quite often results do not clearly show you have a loser or a winner. If you can afford to risk the cash, it may be wise to brighten up the site a bit and try once more, seeking to reach a greater number of prospects. Fundamental to such an effort is to improve the sales copy. While a few can make this work, most will find once again, results are inconclusive.
For most, the better path is to find a new domain name appropriate to another product, and repeat the above. In doing so, you can lean heavily on those elements of the first site that seemed most effective. And you'll find much of the necessary research has already been done.
This may sound harsh to some. But again, it beats busting to grow a site for three years, only to be forced to abandon it. $20/month in hosting alone will have cost $720. And your lost time will far exceed what it takes to build another test site.
An Option To Consider
As you think about shifting your focus to a new site and another set of products, look closely at your target. It may be that your failed site is drawing people who would be interested in your new products. Check costs with care, but you may be able to put your previous site on auto-pilot and attract some traffic to your new site.
Some argue that drawing such traffic matters so, that it's unwise to close any site. Certainly if it is close to covering costs, this can be a very smart move.
Testing Is The Answer
Whatever the outcome of your testing, be guided by the
results. This works for the pros. Let it work for you. You'll
save a ton of time and bucks on ideas that don't prove out. And
you'll have a solid foundation upon which to build successfully,
given a winner.
About the Author
Bob McElwain, author of "Your Path To Success" and "Secrets To A Really Successful Website." For info, see http://sitetipsandtricks.com/webways/
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