Case study part III

This is the third installment of a case study about 5 money-making websites. This post focuses on metrics to measure success.

I’m an old-school direct marketer. The principles of direct marketing haven’t changed for 100 years, even with the Internet. The bottom line is direct marketing is to have your cost per order be less than your cost to fulfill the order.

Many Internet marketers forgot this principle in the dot com era and many still seem to be forgetting it today. That makes some sense, since sometimes companies pay big dollars just to acquire your “eyeballs.”

But why not have the best of both worlds?

Here is a methodology to use to use this timeless principle of direct marketing:

1. Put up a product that doesn’t cost much to test. In my old direct marketing days, we never ordered any product until we had tested it. We used a mock up for advertising and then ordered product based on orders we received (following laws about collecting cash and keeping customers informed about any delays in shipments). Now you can put up a website for under $500, even if you (like me) don’t know how to code.

2. Run some tests and see what kind of response you get.

3. Assess. For instance, on Boxing Fitness the price of the program is $237 or so, and the gross profit is around $190. It didn’t take long to see that on Google Adwords we got plenty of orders at a cost of less than $190. So we had a good product.

4. Tweak. Had it cost more than $190 to get a customer, I would have had to tweak my approach: adjust the website copy, increase benefits, try a different ad source. Ultimately I might have had to stop investing in the site.

5. Expand what works. Since Google worked for me, I expanded to other venues. Some have worked and some have not. I continue to expand what works.

6. Use print advertising. Many of your comments focus on building communities, links, SEO, etc. Again, I’m old-school. Lots of people still read, especially in niche markets. So I use print ads. Have you ever looked in the back of a National Enquirer to see how many Astrology ads reach 2.5 million readers every week?

7. Test new categories. If one certification program can succeed, why not others?

8. Get customer feedback. For instance, in boxing fitness, a customer asked for a trainer locator. So we put that in. Now people look for trainers in a specific area and, if we don’t have one, they often get certified. Also, this benefit caused other people to see that we can help them get more business.

Now, in terms of the free networking site, I still intend to use the CPO or Cost Per Order metric. How much do I have to spend on marketing to get a dollar of revenue? Since I don’t know (the site hasn’t launched) and have no idea if this will work, I’ll be using free marketing avenues: press releases, direct emails inviting thought leaders to join, etc. Then maybe I’ll test some classified ads and Google.

Many of you ask why I don’t readily share websites (although I caved in in the previous post). The reason is that Sitepoint readers tend to focus too much on design and not enough on the metrics and numbers. Every time someone on Sitepoint gives a URL, some of you have positive things to say and some of you don’t (and some of you are just plain rude and personal). It doesn’t matter whether you care for a design or not. What matters is whether the metrics work in the site’s favor.

So make this your mantra: Cost per order.

Free book: Jump Start HTML5 Basics

Grab a free copy of one our latest ebooks! Packed with hints and tips on HTML5's most powerful new features.

  • Tony

    Firstly, thanks for sharing this with us – it’s all very interesting to me in particular as i’m planning a site similar in brief to your number 5. I don’t want to give too much away but it is for a very niche market, will be advertised as much (if not more) offline, and will firstly be geographically based, then expanded to envelop the rest of the north of england, and then the whole of the country.

    Secondly, a possible avenue for you: One of the UK champions of Muay Thai kickboxing is also a very good businessman. His name is Sandy Holt and he has academies, etc. His site is http://www.thaiboxing.co.uk and I think you should contact him.

    Eagerly looking forward to your next posting. All the best, Tony Smith.

  • http://boyohazard.net Octal

    Thanks for persisting in the light of so many negative comments Andrew. I have found this case study informative as well as a refreshing wake up call. I hadn’t realised how stagnant my thinking had become.

  • aneitlich

    Octal,

    Thanks for the kind words. It makes a difference.

    At the same time, I welcome the negative comments that are thoughtful and logical (and that don’t get personal, as unfortunately some Sitepoint readers have a tendency to do). I like when people tell me that sites won’t work when I know they will (or at least know how to keep my risk to under $600 per site). See, if everyone thought a site was a great idea, everyone would be doing it and it would be too late.

    The best ideas are the ones that draw skepticism, especially when the metrics prove that they are legitimate!

    So I’m trying to share some old-school knowledge, knowledge whose time has come again.

  • Sally

    Thanks again for sharing this inside info, very helpful information. I can’t help but mention that your sites are not built using Web Standards, this is important becuase in my opinion it holds back our entire profession and the Web itself. Also your natural search would benefit greatly from losing all those tables and using CSS for the presentation. Sorry to be Oscar the Grouch, I do appreciate your write-up. I just wanted to share something that would help all of us, including you and your clients.

  • erzatz

    Kudos!
    You should be congratulated on the excellent articles that proved very thought provoking. Though the flip side to that is, this site looks to be coder focused and your article is more marketing/business focused (I think that later is great). In your original topic you correctly titled it a Case Study… it would have helped immensely to restate this in the post. This could have helped the casual passer-by not to focus to closely.

    I think all of your sites are good and had one critique… of your marketing site. It’s not personal… I even had three others I work with confer… two headshots on one page is too much. Use any picture or clip art of a professional nature even group shot from the professionals and viola.

    My last suggestion… do what Mark Cuban does. http://www.blogmaverick.com/

  • http://01wholesale.com marcel

    I like the Cost per order concept, makes me want to learn more about direct marketing.

  • Ravedesigns

    Well…time to put my head on the chopping block here I guess. ;-)

    Personally, I think what matters most in business is RESULTS, and if Andrew’s seeing potitive results and is making money with some of his websites, does it really matter if the code used in a site doesn’t vaildate 100%?

    Sure, I think standards are important when it comes to assessibility and seeing to it that your site looks the same on different browsers – but I really don’t think any of Andrew’s sites are giving web developers a bad name.

    Maybe it’s just me, but I’d take a profitable non-compliant site over a unprofitable compliant one any day, and I’d bet that most business owners would too.

    P.S. Thank you Andrew for sharing these good case studies with us!

  • basia

    For me the most surpising is fact, the astrology CERTIFICATE site is profitable and people pay for it. Certificate ruuuleeezzzz :-)
    In fact in old times astronomy was the same as astrology…
    Thanks for sharing idea, that not that works, what I think would work.
    Greetings

  • http://www.terra2imports.ca alkatraz

    Thanks for sharing!

    You’re so right, I used to be all about the design and my mind convinced myself that good design and free was the best way to make money on line. After studying old school direct sales marketing techniques and some of the internet marketing companies who were transitioning these techniques online I began to “see the light”. =)

    Looking forward to your next article!

  • eveenend

    Great comment Ravedesigns. I fully agree! Too often we tech-folk think that our software runs the world. Truth is, most of the time we play a supporting role.

  • JMorrow

    Nice copy on the site. On the order page, I noticed you request several monthly payments instead of one big payment. In your experience, is this more successful in getting visitors to convert?

    I’m tinkering with a campaign for a $700 course right now for a friend of mine that’s a national celebrity in his field. The copy and course are top-notch, but apparently, people don’t want to buy something for $700 after seeing an ad once. Do you think multiple payments would work similarly well for such a high ticket item? Any other suggestions?

  • mjc

    I’m very much with Ravedesigns & eveenend in that it’s utterly pointless to whine on about an existing money making site not being standards compliant. HOWEVER, I would strongly advocate pragmatic standards compliance for future sites (i.e. don’t spend a big premium) because properly implemented it should save money in time with cheaper updates/refurbs. It’s easy to check for compliance & professional tools do facilitate writing standards compliant pages. I recently checked a site that I had written a while back – Using Dreamweaver MX (original version) – with absolutely NO conscious reference to standards (I was young & foolish :) and it came back with only one compliance failure on the w3c checker which was a one minute fix to be 100% compliant.

    I can’t be bothered to check all of the sites but “www.healthcaremarketinginstitute.com” has 31 errors when judged as 4.01 transitional html and 181 errors as xhtml transitional which should give you an idea that the page is not particularly well written technically. It may not make the difference but some browsers may have a tough time rendering non-compliant pages in a predictable way in the future so it might be better to bite the bullet & specify standards compliant pages in the future.

    From a design perspective it looks like a pretty decent businesslike webpage except for the semi-random yellow highlighting which, quite frankly, turns me off of the message and remember, this site has your most upmarket target market so our opinions here do count more than for the other sites. I’d be interested in getting a follow-up article in 6 months or so telling us the result of this site but I feel it’s possible that a slightly more expensive (to produce – hire a top drawer graphic designer) website offset by a higher priced product could quite well be even more successful when selling to professionals – but bear in mind that’s a feel not a quantifiable assertion.

  • http://www.revmedia.com dhecker

    This will probably get me flamed but the reality is that only techy-types care about standards. Marketing people, ordinary users, and most everyone in every industry could care less about standards as long as the page loads quickly and looks right. I like standards, but I don’t expect anyone but the web community to care about them. After all, the webmasters are the only one’s that really benefit from it (accessibility aside).

  • http://www.developedsitesales.com Cutter

    Heheh, I find it amusing that you mentioned why you don’t like to share you website, and people still had to post here about things like why not to use tables!

    What I am curious about is how many people are working on/with you for these projects? Based on past blog posts I know you’ve got quite a few sites. I’m running quite a few myself, and its virtually impossible for me to give my “A game” to anymore than one at a time.

  • http://boyohazard.net Octal

    A discussion of standards doesn’t really belong here but I’d just like to point out that people will care about standards if you explain it in a language they understand

  • http://www.blogsatwork.com bohuslav

    Andrew,

    Can you go into some more details of your intitial testing methodologies of whether or not you think a concept will work (eg. how much time you give a site to test, setting goals for the site to know whether or not it “passed” the test, etc.)

    Thanks in advance,

    Ted

  • Sally

    @Ravedesigns

    Maybe it’s just me, but I’d take a profitable non-compliant site over a unprofitable compliant one any day, and I’d bet that most business owners would too.

    I don’t think these are the only two choices. I think it’s best (and completely possible) to have a profitable standards compliant site. I know this is off topic, but anyone creating web sites should care about it. Like I said, it’s good for SEO, in fact, I think it’s the most beneficial, cheap, and easy thing you can do for SEO. There’s your business (non-technical) argument. Also, can you easily port this table-based site to PDAs and cell phones? No. Is it future compatible? No. You’ll have to rewrite all this code in the next few years anyhow.

    I guess it’s just frustrating that our industry tends to be so divisive with these things. Why can’t we have business-savvy professionals that understand marketing as well as how to properly code a site. Folks seem to specialize in one or the other, then trash the other side. In my opinion, to be most successful, you should be well-rounded on both sides, or hire someone that complements your skillset to help you.

    Stupid analogy, but I don’t want to hire a car mechanic that doesn’t know how to fix my actual engine, but he washes and polishes the outside, then does a little tap dance and hands me a lollipop as I shyly giggle and say “aw shucks”. Yeah, that was dumb, but kind of funny.

  • aneitlich

    Hi Sally,

    Thanks for the comments. Honestly I’m not so web savvy and have to confess this is the first I’ve heard about standards. I also appreciate the post that checked out how many errors there are with the coding. I’m bringing up both issues with my developer to see what his problem is.

    I’ll be sure to ask for standards-based pages in future.

    At the same time, my goal right now is to learn as much as I can about the viability of these sites at the lowest cost. If they can be profitable with “spaghetti code” then I imagine they can be even more profitable with great code.

    But anyway, I sure appreciate your advice.

    Andrew

  • aneitlich

    erzatz,

    Thanks for your impressions about the two photos. I have asked my web designer to remove the double photos where they appear.

    Good advice!

    Now let’s see if this move sells more books or gets more calls to come my way.

    Andrew

  • Sally

    Thanks Andrew, I really appreciate your openness. I really wasn’t trying to be a jerk. You seem to be someone that is interested in the business case for doing things, so I really think you’ll see a huge SEO benefit by moving to web standards and CSS-based design in the future. There are tons of other benefits, but SEO is a important one for the business-minded. And if you have a savvy web developer that already knows standards, the cost and time involved shouldn’t be any more than the table-based development style. Thanks again for being so responsive.

  • MatthewHSE

    I’m bringing up both issues with my developer to see what his problem is.

    Don’t be too hard on the guy. (And maybe apologize if you’ve already raked him over the coals! ;) ) I’m for valid code myself, but there ARE valid reasons to use tables and some other types of code that are normally frowned upon by the web standards crowd (I include myself in that group). One excellent reason for using tables, for instance, is that they’re the only way to get a site to look the same for older browsers as it does for modern browsers.

    A standards-compliant, CSS layout normally means your visitors on Version 4 browsers and lower will get an unstyled page that looks like an internal page from useit.com. Readable, sure, but definitely not attractive.

  • jomoweb

    I like the idea of these case studies, but most of them are the same business plan: A marketing site selling information to professionals.

    What if Sitepoint hosted an apprentice-type competition where Sitepoint users could create a business plan and develop it over 1 year?

    We could see a culmination of business plans and assess which ones really went well at the end of the year. It could also serve as motivation for those of us who are trying to “work hard in 2006″ to work even harder. The competitive spirit usually brings that out in people.

    Would anybody be up for this? Perhaps Sitepoint might be willing to donate a prize package of books for the grand prize.