Working out how much to spend

[JJWinst]

Hi everyone,

New on this side of the forum! I'll give you a quick brief as to where I am up to and then add my question.

My site has been live 12 months, picking up a small amount of sales through no marketing at all (most traffic are coming from previous sales on other platforms) and the odd conversion from flyers and the small bit of email marketing that I do myself.

I have never invested heavily into any kind of marketing but am now looking at a new web build coupled with ongoing marketing.

How would you work out how much to initially spend compared to how much money can be made? a lot of agencies are quoting me £400-£1000 a month - The company I'm looking at having a website build with have options that are the same. Both require more money to be spent on PPC/Adwords etc..

I'm hesitant to spend so much money on a site that only currently picks up around 3/4 sales a month. I have no idea what projections I should/could be looking at so how can I warrant spend?

Thanks in advance.

 

[12ish]

If I was making three or four sales a month from a site I wanted to promote I would be prepared to spend at least all of the margin from those sales to try new stuff. Looking at your site it looks like your margins on that are not going to be large enough for that to work as a strategy.
Obviously your PPC costs divided by your conversion rate needs to be less than your margin, then you still have the £400 plus monthly retainer to cover from that so you need to be selling maybe 70-100 items a month, depending on your margins there. I'm just guessing based on the cost of the products and assuming you make a tenner on a sale.
In terms of your expectations, the only thing I can tell you is that if you do not spend the money, then you are unlikely to see growth on the website.
Good luck.

 

[Nochexman]

Do you have an expectation about how much money you expect to make from your business or how much you might expect to invest in it over say 12-months?

If yours is a one-person business, I would want to DIY all my own marketing so I could understand how it worked and also what doesn't work.

 

[david64]

12ish provides some good advice. I would add, on top of his estimations, that this means you will need to sell 3-4 items / day to cover your "SEO." at £10 profit (guessed). Also estimating a 0.3-1% conversion rate, that would mean you need 350-1,000 visitors / day, which is not a huge amount.

With the data you have on your site/business, fill in the above information to work out what number you are looking at.

If you target traffic to cover your promotion costs is 1,000, then £400-1,000 / month is reasonable.

However, from the outline of your post I gather you have very little knowledge of SEO. You need to be very careful when going into this, as the majority of SEO people/providers will just tell you what you want to hear to get your money; and to some extent, the information you should know before going into SEO is not really their responsibility to give you.

Further, you need to know that the majority of SEO undertaken is pretty "slash n' burn." You will probably want to pay for quick results and if you are lucky enough to find a company that can provide them, the work they are likely doing would probably be considered spammy and the sort of thing that Google are not keen on.

I was involved in SEO several years ago; and all or most of my clients have lost a large portion of their rankings, in the order of probably 50-95% and quite a lot of them have gone out of business - in some cases because they relied on traffic from Google. This may sound like I was terrible, but I can guarantee you that the above is the norm. I would guess that only about 5% of the sites that were on page one when I were active were still there; and for the most part that is because they were using junk SEO. Most small business sites that ranked 4-7 year ago are now fried or fallen far from grace; and it will take quite a while to explain why. If you are looking to SEO, you really need to do some research to find out why that happens; to see whether you want to go down that road, or choose a different route, which have their own risks and rewards.

To try and sum it up. Google wants to provide the best quality results. Other than this being good for business, its something to be proud of. You come along with a retail site that is no different from any other. There is probably no reason for it to appear high in Google. If it did, it would appear there already. So you go to an SEO company, wanting a quick return. To give you that, they put out a lot of fake signals into the internet that may confuse Google into thinking your site is important and rank it higher. But after a while (weeks,months,years) Google starts ignoring all the spammy signals your SEO company has created and/or manually kicks your site down the rankings. That is what most small businesses have been paying for, for the last decade.

There are other approaches that are likely to last longer, but take longer if ever to be worthwhile. If this is something you really want (the site as a business) take those; but if this is just something that has taken your fancy and you think you can have it chugging away on the side on auto-pilot, its probably won't be worth it. The internet, particularly retail is hyper-competitive and if you think you can treat Google as a urinal you will wake up one morning feeling very sick.

N.B. Good "SEO" is expensive. £1,000 / month is not enough IMO. A minimum of 40 hours of week is required.

 

[12ish]

What he said!
Great answer, David.

 

[whitedoorbrands]

I am a very similar boat...planning my digital marketing and everywhere I turn there is SEO.

From what is being said unless you have an in-house SEO person getting an external SEO company may leave you feeling sick in the morning?

 

[david64]

getting an external SEO company may leave you feeling sick in the morning?

I'm probably giving somewhat of a limited picture. But as mentioned, you need to do research to understand what you will be getting yourself into. Most of SEO is "spam" and if it isn't considered spam now, it probably will be in a few years. In browsing the posts here I have seen an SEO strongly recommend against a certain SEO technique, suggesting it may get you peanlised by Google. However, a few years ago they were advertising the same technique as a stand-alone service. And this is not intended as an attack on that SEO. Clients want results for the least amount of money and that is what "good SEOs" (from a short-term perspective) will get you. However, if you go down that route, you will very likely end up being penalised at some point in the future.

That is very important to understand. But you need to understand what spam SEO is specifically to distinguish between it and better "SEO". You may make a net-profit from spam SEO over a given period, but you also risk Google deciding they dislike your domain.

Most people will opt for short-term gratification, over working hard for potentially better rewards in the future. If you want the possibility of those greater rewards, the necessary actions will probably take more resources than most people can/will dispose of; and with no guarantees - as with spam SEO.

If I was a small business, I would probably be looking at ongoing, long-term and realistic goals; focusing on achieving rankings for broad terms, which convert better and results that last. As mentioned, what people end up going for, whether they know it or not is a sharp, short injection of head terms (e.g. gifts, not cool blue widgets.)

I'd imagine that there are SEO people/companies who can provide this, but they are a minority; and remember that you are guaranteed nothing. It is your responsibility to educate yourself, weigh the pros and cons then make your decision.

As for feeling sick in the morning, just imagine earning £50,000 / year for shipping out a few baubles; and then waking up one morning and finding that its looking more like £5,000. Something like that has happened to 10,000s of people in the UK; and the vast majority of them deserved what they got.

 

[12ish]

Yeah, having been doing this since 2002 I say SEO when I mean everything. I like to use the term business internet optimisation, optimising your business so the internet pays you money, but it has not caught on. Long term is the only way, unless you are walter white.

 

[david64]

unless you are walter white.

I'd add to that, IMO: that retail is something that is worth avoiding for most people. Back in the 19th century, I think something like 50% of the population was involved in agriculture. Now it is about one or two percent. It wasn't very nice for the people who were being cast out of their jobs for machines and imports, but the end result was worth it. People adapted and joined or created new professions. Adversity breeds diversity. If you can always do what you've always done, you are unlikely to change.

The same thing is happening now in retail. Small shops are going under because people would rather buy the same product much cheaper and with better customer service from Amazon and eBay. I used to avoid eBay as I thought what is happening is unfair, but upon realising what is going on and how much better their service has become, now like the company. I heard a lot of complaints from small businesses, but they are unable to make a better offer, or change. They are not owed a living for standing on a strip of lino all day, racking the register for bags of toffees; or sending out parcels. It may not be nice for those people, but I think as long as society done't collapse (which I think is more likely,) the end result of the cull of the retail sector will be positive. There will be fewer people involved in dispatching more products for lower prices and less environmental overhead. The excess will find more worthwhile things to do; it won't happen straight away, but you don't get everything you want served up on a plate without having to do anything. This isn't communist China.

 

[Alan]

Really you have to decide if you are running a business or a hobby.

If its a hobby, do everything yourself, learn and have fun.

If its a business learn how to use experts and select suppliers, set a strategy and invest in that strategy until it succeeds or it fails.

Apart from 'hobbyist' marketers, you will have to pay market rates to get results and at £400-£1,000 a month you are really at the base entry point. Sure there will be people that offer services at £99/month but you do get what you pay for generally.

 

[whitedoorbrands]

Very good point, I guess its about empowering the right people and having the right Team

 

[JJWinst]

If I was making three or four sales a month from a site I wanted to promote I would be prepared to spend at least all of the margin from those sales to try new stuff. Looking at your site it looks like your margins on that are not going to be large enough for that to work as a strategy.
Obviously your PPC costs divided by your conversion rate needs to be less than your margin, then you still have the £400 plus monthly retainer to cover from that so you need to be selling maybe 70-100 items a month, depending on your margins there. I'm just guessing based on the cost of the products and assuming you make a tenner on a sale.
In terms of your expectations, the only thing I can tell you is that if you do not spend the money, then you are unlikely to see growth on the website.
Good luck.

Exactly..The site currently doesn't make enough profit to re-invest so I need to start somewhere to try and drag traffic in to the site.

As you guessed, the industry I am in doesn't provide huge margins and the average order value is around £40.00 - We make around 200 sales a week currently (through the popular platforms) and I'd like my site to perform as well as if not better than this.

 

[12ish]

Personally I would work on your social media assets before redoing the website, then once you have achieved a large enough following use that to really drive traffic to the new site.
Ultimately you know your product better than any SEO dude, and you need to harness that knowledge to leverage more traffic/sales
I am not saying it can't be done, just that on an agency budget (of £400) I'd be surprised if you get near 200 sales a week.
Where do the people I want to connect with go to talk about their sporting hobbies?
fitness forums - magazines -
what are the questions that they ask that you can answer?

One thing that can work really well is youtube reviews of the products from real people. "Sponsor" some amateur athletes with free gaff in return for reviews.

I've seen that work really well if you get the right connected people to do it.

You can target people who are fitness freaks and highly social (number of tweet/followers)

 

[Wowfish Design]

For a business it isn't just SEO that is important, it is the view of the media, that is done today through social media marketing and any good company should be able to give you a complete overview of their intentions to help you, not just create links and get you to page 1 on Google. That isn't enough.