|pros • per • ly|

If this was your first holiday season as an internet business owner you might have been surprised at what you saw. For some industries traffic and sales always spikes during the holiday season. For other industries you can see a big drop off in traffic and sales.

So if my traffic dropped, should I worry?

I wouldn’t worry at all if that is normal for your industry. If you don’t know what is normal for your industry then you should assume that a drop is normal. It is definitely not a time to panic. Just roll with the punches.

That is why we preach that you should focus on revenue per visitor because that is the thing that you can control. So in times of natural traffic fluctuation you just need to watch that number and you will be able to tell if you should worry.

For example, let’s say that I run a website that normally gets 30,000 visitors a month and the revenue per visitor is $0.50. Then I notice that during the holidays my traffic dropped to 15,000 visitors but my revenue per visitor is still $0.50. Yes I made less money because I had less traffic but losing holiday traffic was out of my control. I still converted the visitors I had at the same level.

So again the key number to focus on is not traffic but revenue per visitor. If you don’t see your traffic start to come back in January then you may want to make sure your search engine rankings are where they were before and compare other traffic sources as well to make sure you aren’t missing something.

As you begin to buy more websites your portfolio will obviously grow. If you’re careful, your total time invested will remain about the same (there is ALWAYS an incremental time cost when adding to your portfolio unless you just let a site grow moribund and die).

If you really want to run a successful online business you need to make sure you’re focused on the things that matter most. At Prosperly we have a laser-like focus on one metric only:

Revenue per Visitor

One of our employee’s job every morning is to run the previous days stats, calculate the total income derived from all sources for each business and then divide that by the unique visitors.

Each industry is different. Some have a naturally high revenue per visitor, others aren’t so high (though still highly profitable because traffic acquisition is easier — obviously).

One thing this has done for us at Prosperly is really help us recognize what is in our control. We can control revenue per visitor much more readily than we can our rankings in the search engines. We control revenue per visitor more than any other aspect of our sites because we have complete control over the site.

There have been times where we’ve made changes to a site and then watched our income fluctuate (up or down) — growing antsy with the change. Was it right? Will this be more profitable? We didn’t always focus on traffic AND revenue (which revenue per visitor is). So we’d see a dip in profits and be worried that a site change was unsuccessful. In reality, visitors had fluxed.

Now, realize that when you’re simply looking at one site day in and day out, it’s easy to monitor several metrics separately (conversion rate, revenue, traffic, search engine rankings for key phrases, etc.). However, as I mentioned above, your portfolio growth will necessitate that you dial those metrics down to one (maximum two) that truly matter. As you become dialed in on the metric that determines your online business success, you’ll see decisions are made more quickly, with better outcomes.

On one of my sites I decided to add some inline video (hosted via YouTube) to demonstrate some important aspects of the product.  I made four videos in about 20 minutes and was all set.  These are not professionally done at all — simple screencasts of me working through the software and talking.

At any rate, I placed the four videos in their relevant sections of the sales copy and began a splittest:

Original:  The user would click on a link, which would open a new browser window and launch a screencast I had made using Camtasia.  There was no audio, just popup bubbles explaining things.

New: The user sees the embedded videos right there inline.  The videos are about the same content-wise, but have audio of me explaining things as I go — no popup bubbles requiring reading.

The results have been phenomenal:

As you can see it’s holding very strong (98 conversions are enough for a statistically significant result…standing on its own) at 3.34% conversion.  Granted, Google’s Website Optimizer says it doesn’t have enough data to declare a high-confidence winner yet, but 97.4% was high enough to merit writing this post.

So what are some key takeaways from this?

1. It’s fairly obvious that visitors (at least in my niche) respond well to video.
2. 20 minutes of work can boost sales 33%.

I talk a lot about using tools like Google’s Website Optimizer, Google Analytics and Crazy Egg. These are all tools that can give you valuable information what your users are doing, how well your website is converting visitors and much more.

One thing I have found myself doing is getting into the habit of checking analytics or crazy egg reports everyday and just thinking about how the reports give interesting data. For example I will look at a report and think, “Oh, that is very interesting that people are clicking on the link in the footer when they should be clicking on the top order button.”

I will then move onto the next report and do the same thing. “Oh that is interesting that 18 people found my site searching for “10 day trip to hawaii”.

This is ineffective reporting. What I need to do is examine a report, take away the major points that standout and then put an action plan into place. For example, if I look at a crazy egg report and see that visitors to a particular page of a website are not clicking on links that I want them clicking on, I will make an action plan to make the links I want clicked more prominent. Maybe I will remove other links that are not important to me but are distracting visitors from the sales path.

The point is all of these awesome tools exist not just to keep me interested during the day, but to make changes to my websites that will ultimately make me more money.