Wednesday, February 25, 2009

Bangers 'n Mash and the Internet

Pay Per Click advertising, through Internet search engines, still remains a bit of a mystery to many business owners. Not just the mechanics of making them work, but the core of why they can be so cost effective.

I always try to make things simple with real world analogies. So here goes.

Imagine you are a butcher specialising in rather exclusive sausages.

I'm delving into a personal fantasy here. My favorite meal, you may be horrified to know, is bangers and mash and my favorite 'restaurant' is a cafe tucked under the M40 flyover on Portobello Road in West London. They always have a choice of 6 or 7 unusual and delicious sausages, several mash combinations and few different varieties of gravy to finish it off. Absolutely superb!

So, back to the story, you're a butcher specialising in unusual sausages and you want to open a shop. But rather than opening your shop in the general high street you choose an unusual cul-de-sac. Here EVERY shop is a Butcher specialising in sausages.

Is that commercial suicide? Not necessarily.

The good news is that every person who wanders into that street is a potential customer, they just wouldn't be there otherwise. The bad news is that they may only buy from one shop.

But there's further good news. You will only pay your costs of being there on footfall through your door. In other words you will only pay when you actually attract someone into your shop and potentially sell some sausages.

So your job as a butcher is to make your shop window the most appealling and attractive in the street.

You can count the number of people who walk past your window and those who walk through the door. You can also measure the number that actually buy and how much they spend against that charge you pay for everyone that walks in.

Armed with those ratios and cost per sale, you can change your shop window as many times as you like to test the effect on your ratios and ultimately your profit.

But you're not restricted to how many times you change the window, so you can refine it constantly to maximise the results. Unlike many other forms of advertising, you are only paying for a defined result - someone walking through your door.

There's one more important aspect too. There will undoubtedly be some spots on the street that 'perform' better than others. If your shop window is effective in getting larger percentages of passers by into the shop, you'll be promoted to a better spot.

But you can short cut that promotion too by changing the amount you are prepared to pay each time someone walks in your door to try and secure the shop position you want. The more you are prepared to pay the better your position.

If you're still with me, I'll relate that to Pay Per Click advertising and make our butcher an internet business.

Your cul-de-sac is the phrase that potential sausage buyers might type into a search engine such as Google. They might type 'Wild Boar Sausages'. Your shop can sit in any number cul-de-sacs of key phrases that may be typed in by sausage buyers.

Your shop window is the 4 line advert that appears on the right hand side of the search results page. How good your ad' is determines the number of people who walk through your door into your website - the point at which you pay.

The final part, the one that decides if the project is worth while, is how effective the inside of the shop is in getting customers to buy. Are your potential customers seeing what they expected after being attracted in by your window display, or do they see Beef and Lamb joints with the sausages tucked right at the back of the shop out of site? That's the landing page on your website that you send visitors to.

Pay Per Click (PPC) can, if managed correctly, be a very effective and productive way to increase sales and profits. It should be considered alongside more traditional forms of advertising. Once you've tasted it's success you may find that your advertising spend will be reviewed in the light of it's results.

If you need help to make your website produce profit through Pay Per Click (PPC) advertising contact me at Alloy CRM.

No comments: