One of the most pressing concerns which online marketers and website owners have about promoting their site is which traffic generation strategies they should be using. This is especially important to people who are just starting out in internet marketing and who want to make sure that they are making the wisest use of their resources as they are promoting their website. As a result, many Internet marketers have a difficult time getting focused on their marketing and end up wasting a lot of time and energy jumping from one strategy to the next. Thankfully, this is something that can be avoided through proper knowledge and analysis of traffic generation strategies.

 This article will help you to analyze your traffic generation strategies and to make a well-calculated decision as to which ones are going to be most appropriate for promoting your website. Let’s begin with clearing up a popular misunderstanding about traffic generation…

Paid Traffic vs. Free Traffic: Which is Best?

A common dilemma that website owners face is whether they are better off with free traffic strategies such as article writing, forum posting, or free classified ads, as opposed to paying for traffic through pay-per-click advertising, paid classified ads, Facebook advertising, or other paid traffic strategies. The best way to solve this dilemma is to realize there is no such thing as a free traffic strategy. Even article writing and forum posting cost time which could be spent earning money and therefore has a price tag just like pay-per-click advertising or classified ad placement does.

This “cost” may not represent actual dollars spent the same way that the cost for pay per click or classified advertising does. However, it represents potential money earned and gives a tangible way to measure the “cost” and therefore the effectiveness of free traffic generation methods.  

Determining the Best Traffic Strategy

Determining the best traffic strategy for your site begins with calculating the bottom-line value of each strategy in regard to money earned. This can be done using the following analysis:

Step One: Determine Your Customer Value

Your customer value is the total amount of money your business earns by gaining a new customer as a result of your traffic generation strategy. For example, if you are selling a $97 digital product that nets you $75 in profit, then your value per Customer is a total of $75.

Step Two: Determine Your “Cost Per Customer”

Your total cost per customer is the amount of money that must be spent in order to generate one sale for your website. For example, if you are using pay per click and paying .25 cents for each click to your site and if it takes 100 of those clicks to make one sale, your cost per customer is $25 dollars.

On the other hand, if you’re placing a “free” article in an Ezine to generate traffic, you’ll need to calculate the cost of the time spent writing the article based on what you believe that your time is worth. For example, if you spend one-hour writing and you normally make $20 doing freelance work, your cost for that Ezine article is $20. If this article brings you 100 visits and 1 of them becomes a customer, your cost per customer is $20.

A third example is to use of a classified ad for bringing traffic to your site. If your classified ad costs $30 and it brings you a total of three sales, then your cost per customer is $10.

Step Three Determine Your Net Profit Per Customer

Once you’ve successfully completed steps one and two, it’s time to determine your total profit per customer. Simply subtract your cost per customer from your customer value in order to determine the profit of each customer. This will tell you how effective your traffic generation strategy is and will give you a concrete way to determine which to invest the most money in. For example, using the above examples of traffic generation strategies,  you would apply the analysis as

PPC Campaign

Value per customer: $75

Cost per customer: $25

Profit per customer: $50

Ezine Article Marketing

Value per customer: $75

Cost per customer: $20

Profit per customer: $55

Classified Ad Campaign

Value per customer: $75

Cost per customer: $10

Profit per customer: $65

Looking at the results of this analysis, it’s easy to see how some traffic generation strategies which might be considered “free” can end up being more “costly” than those which require money to be invested upfront. While these “free” strategies do have value, they may not be the most important place to focus your energy and resources.

Other Considerations for Determining the Best Traffic Strategies

This analysis represents one of the simplest ways to determine which traffic generation strategies to invest the most time and money into. Once you are comfortable with this, you can get into more advanced strategies which require analysis of things like money spent hiring copywriters or web programmers (or the cost of time spent doing these things yourself), money earned on upsells or cross-sells, and also the lifetime value of a customer based on potential repeat business.  The continued analysis will help you to control costs and measure profits so that you can get the most out of your traffic generation strategies and build a successful online business.

Additional Recommended Reading

How to Increase Your Site’s Conversion Rate

How to Test and Improve Your Marketing  

How to Build a Good Marketing Plan for Your Site