Websites are Referral Generators

Okay kids: let me ask you a question.

You're a small business owner.

Why do you have a website?

Show of hands? Anyone?

If you answered:

  • "Well, duh, you're supposed to have one," that was a good try but not exactly what we're looking for.

  • "Visibility!", you might shout, and I'd say that's close but not really the right answer.

  • "Because everyone else has one," and I'd have to wrinkle up my face a bit and choose somebody else.

  • "Customer expectation," I'd have to nod my head in agreement but politely suggest that's not really a part of today's lesson.

So let me restate the question. The question is: why, do you, as a business owner, have a website? You have one because it's a referral / lead generator. And it is the only reason why you have one.

A website is an always-on machine whose sole purpose in life is to connect you to existing and potential customers. That's it. That's the whole enchilada. That's all a website is supposed to do. Everything you do with a website is all about generating more leads.

Okay, now answer honestly: 

  1. Do you know what percentage of your sales leads comes from your website?

  2. Are you familiar with the frequency of those leads?

  3. Do you know your Average Customer Lifetime Value (ACLV)?

Let's review your answers.

If you don't know how your website contributes to your overall leads channel, why do you even own one? How can you measure its success or impact on your business? How do you justify the expense, the time (for things like blogging and social networking engagements), the benefit to your existing client relationships, what's it doing for you? 

If you don't know if lead frequency is increasing or decreasing, then you don't know how your website content is interacting with search engines or with social media. If it's not improving, or, you're not even aware of it, why don't you just go save yourself some money and throw the website away? Oh, right, going back to your earlier response, sure, everyone's got one, but here's the truth: nobody even knows your website exists because those competitors who do understand these numbers are ranked higher than you in the search engines.

If you don't know how much a lead earns you (your ACLV, the average gross revenue one customer will earn your company), then you have no understanding of the value of that lead. Thus you have no understanding of how to compare the cost of your website hosting and SEO expenses to your actual revenue plan.

Dude, you're being out-positioned, nobody sees you, and that emptiness you feel right now is that cold hard truth rotting in your bones. You have no idea how your website contributes to your company's success. Why even have one?

Want to change? Here's a couple of very simple ideas that you could do, right now, to take control of this situation and manage your website:

  • Start tracking the number and frequency of your sales leads from your website.

  • Develop an ACLV.

  • At the end of your company's fiscal year, multiply the number of sales leads you landed by the ACLV value. Compare that benefit to the expenses you're paying for the website.

Then respond! Take action! Make incremental improvements to the website, re-design it, talk to someone (like, you know, a technology consultant) about how it could better serve you, or heck, just take it down. Nobody cares anyway (you certainly don't) and it's not earning you any money, so why have one?