Confessions of a PPC Addict
I admit it. I became addicted to the easy traffic. Spend a few bucks, get more website visitors.
As I increased my PPC spending visitors increased, sales increased, but the ugly fact was that my profits were decreasing. In the back of my mind I knew the thousands I’d spent on PPC was spent, not invested. I knew it was not healthy long term for my business and repeatedly told myself I could stop whenever I wanted.
Here is how I kicked my unhealthy PPC Addiction:
- Determine COCA: Cost of Customer Acquisition or Cost per Conversion in Adwords is easy to set up and shows how much you actually spent per customer. If your paying $1 per click and it takes 25 clicks to get a customer, then your COCA is $25
- Determine Contribution Margin: How much profit will the next item sold bring: Marginal Profit per unit. Our accounting isn’t that advanced so I estimated it as the Profit Margin time the average sales price (ASP). If you run at a 20% profit margin and your ASP is $100 then your contribution margin is $20.
- Determine gain or loss: If your COCA is less than you Contribution Margin congratulations, PPC is making you money. If you find the opposite, you’re like me: PPC is costing you money.
- Identify most profitable customer: Up to now we have been looking at generalities. There are some customers that are more profitable than others. Since we offer free shipping, the closer you are to us, the more profitable.
- Set a budget: The budget may be zero, but we warned: Going cold turkey can be psychologically tough as well as disruptive to the business. Set a reasonable goal to ramp down spending on PPC while increasing investments in building long term traffic sources. Make sure the money spent on PPC is targeted at your most profitable customers.
- Blog, Blog, and Blog some more. Blogs continue to drive visitors while PPC is once and done. One is an annuity, one is a quick fix. Write on the keywords you have been paying for with PPC. Take the money saved on clicks and invest it in hiring freelancers to blog from places like Zerys. The faster the content draws visitors, the less dependent you will be on PPC.
- Build Referral Sources: I’ve yet to see a business that is 100% B2C. There are businesses that can send you good traffic and leads. In our case while we rent and sell things like knee walkers to people who can’t bear weight and can’t bear crutches, it’s the PPC Addiction doctors that often refer them.
- Build Links to Your Site: The first place we went was to our vendors. We gave them a testimonial for their site and we got a back link. Another great way to build links is to offer to guest blog.
- Fix Your Site: The PPC addiction helped buy traffic even in spite of the site being difficult to find. Start correcting the errors you already know about and those identified with free tools like Marketing Grader.
- Have an intervention: It was painful to admit to my staff that we were changing our approach. I had been wrong and wasting resources. We will be more profitable immediately and better in the long term.
- Find a sponsor: You will want to go back. Especially if you are the decision maker, owner, or the only one who sees the data. Find an accountability partner.
- Look forward: Money already spent is gone. Chalk up your spending as an investment in your learning and look forward.
PPC click traffic can be a cheap fix that is easy to get, but alone it will not build the long term traffic sources a business needs. Good luck in kicking the habit. To all the PPC addicts, thanks for funding all the great free Google tools.
Tom Schwab is founder and owner of Goodbye Crutches, the largest online distributor of direct to patient Durable Medical Equipment (DME) focused on serving those who can’t bear weight and can’t bear crutches.
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