Your business needs to be on Facebook! What's your mobile strategy?? Do you have a podcast? Are you doing online video – it's the next big thing… You are missing out on a HUGE opportunity!!!
Well, that's great, but as a business owner, maybe you don't have unlimited hours to build websites and hang out on Facebook and make YouTube videos. How do you know how much time and money you should invest in your online efforts?
This is a great question, and the answer depends on the type of business you have. Here are three questions you can ask to get a better handle on how to approach your level of online investment.
1. What is your average customer value?
I like to start by helping a business define their average customer value. When you get a new customer, some of them visit only once or a few times, and others come back again and again. (Note: it's 5x more expensive to get a new customer than to keep an existing one, so if you aren't treating your customers like Kings and Queens then you should be!)
If you take an average, how often does a customer visit in a year and what do they typically spend at each visit? Here's an example: according to Chiropractic Economics, the average chiropractic patient visits 30 times per year @ $65/visit. That's $1,950. Many people will argue this number is too high because of insurance and a variety of other reasons. So let's say conservatively that a new patient is worth $1,000 per year in new revenue.
For most businesses you can come up with a reasonable idea of customer value. The important thing is that it needs to be something the business owner agrees with.
2. What's your ideal outcome?
Another great question to ask yourself is – what am I after? While a new patient might be the goal for a chiropractor or dentist, a hair stylist might have her schedule completely booked from word of mouth referrals. And I've spoken to interior designers who aren't looking for leads from Google. They want their high end clients to refer them to other clients with lots of money.
So online leads may not even be the goal for some businesses.
3. Where are your customers hanging out?
Where are your customers? Are they actually doing searches on Google? Maybe they read trade magazines, or hang out in online forums. Maybe they spend a lot of time on Facebook. This can be tricky to hone in on.
For example, Foursquare is quickly gaining critical mass. Most business owners don't really know what Foursquare is. But if you search for your business on the Foursquare website, many times you'll see that people are already "checking in" to your business from their iPhones and Androids, and your already have a "Mayor"! Maybe you don't like checking in to get badges, but your customers do. So you need to be there by claiming your venue page, creating specials and leaving tips for your customers.
(Side note: take a look at this excellent presentation on Foursquare by Carmine Gallo – The Power of Foursquare.)
Putting together your plan
Once you have an idea of your customer value, your ideal outcome, and where your customers are then you can make some decisions about how much to time and money invest and where to invest it.
For the interior designer we talked about earlier, she will want to spend the money to have an impressive portfolio on her website. Spending thousands of dollars for a nicely designed site that shows off her portfolio may be worth the investment since even one new client could pay for it. But she probably won't be spending a lot of money on Local SEO or Google AdWords.
The hair-stylist might want a very basic website but limit the amount of money she spends online.
Realtors in some areas, however, spend thousands of dollars per month online because they know one new customer could lead to a commission worth tens of thousands of dollars.
What do you think? Do you know your average customer value? How are you determining the time and money that you invest in your online business?