Predicting your website sales - four key questions

We set up a lot of websites for new businesses and a very common question is “What sales volumes should I expect from my new site?” This article helps to answer that question.

Sales projections for a new business are always subjective.  But they should not be a matter of pure guesswork.  The knack, really, is to use the hard facts you know as a basis on which to build your best estimate of future volumes. 

But before you even do that, it is vital to give yourself a fighting chance of success by doing the right things to generate business volumes that are as high as they can be:

1.Has my website been constructed properly?.  So many people try to build a website themselves with a little (or no) knowledge - or use the lowest cost website available - and end up with something that does not work for human visitors, cannot be understood by search engines and, frankly, looks a mess.  If you were opening a high street shop, you would not build it youself.  So why take the risk with your online store? 

You need to make sure your website is designed to make it easy to find and buy the desired product.  This includes (a)  the number of clicks needed to buy (which should be small), (b) the complexity of the purchase process (which should be low), and (c) the tone of the process, which should encourage purchase and completion of the payment process.

2.Has my Website been professionally optimised?. Get this done professionally so that search engines can find your pages and send the most appropriate, targeted visitors to them.  But remember, you should not expect the visitors to come straight away.  It often takes many months to get a good flow of visitors referred from the search engines. Technical guidance is available on optimisation.

3.Have I organised some early visitors to my site to get the business off the ground?.  Suitable paid advertising is important to supplement the early volumes of visitors to the site and to help get the new business underway.  Google AdWords pay per click advertising is often the chosen medium, but Facebook also offer paid advertising that is worth considering.  Getting this done professionally can save you a lot of money as it is very easy to pay twice as much as you need to for each visitor to your site. 

So, once you have given yourself a fighting chance by doing these things, how do you go about estimating your business volumes?

(i) How do I estimate visitor volumes and sales from my pay per click campaign? - by doing pay per click advertising in the early days of a new venture, you can estimate visitor volumes accurately, as they can be fully controlled from within the campaign.  As soon as you have as many visitors as you can handle, turn off the tap!

How many sales these visitors will generate can be calculated accurately if you have some idea of the likely conversion rate of your site.  i.e. if you can estimate how many visitors you need to make a single sale, ie number of visitors x conversion rate of website = number of sales.

If you know your average ticket value (average income per sale) then you can predict turnover, and if you know your average profit per sale, then you can project your profits from this.

(ii) How do I estimate visitor volumes from natural optimisation to grow?  - turning to the “natural” visitors you get from website optimisation, we can predict very low volumes from day one (if you are launching a new domain and business from scratch).  These volumes can be expected to remain low for the first 6 months, then rise at a steady rate thereafter as the search engines grow in confidence at sending visitors to your site.  2-3 years in, you can expect your site to be fully competing with its peers. 

So have a look at your competitors and see what sales they are achieving.  Can you do what they do?  Or can you improve on it?  This is where you have to do a bit of crystal ball gazing to estimate the likely number of visitors.  But once you have done this, you can turn the visitors into projected turnover and profits in just the same way as you did for visitors from your pay per click campaign.

(iii) Am I selling a desirable product compared with my competitors?  - ask if your product is attractively presented and if the selling proposition is attractive.
Compare your pricing with competitors, including your delivery charges and arrangements, and your refund policy. Finally, do you offer any other benefits which your competitors do not, and does your website compare favourably with your competitors.

(iv) Does the website present a company people want to do business with? - there are certain “hygiene factors” which – if not properly addressed - can lower your expected business volumes. For example, (1) are you presenting an established, trusted (UK based) company with a real phone number and and people to talk to in case of problems? (2) do you have a brand that is known and trusted? and (3) do your terms and conditions look attractive from the buyer’s perspective?

The more the answers to the above are positive, the more you can expect people to buy.  The less positive they are, the more reasons visitors will have not to buy.

From the answers to these questions, you can start to build a chart of growing visitor volumes and sales and this can be used as part of your full business case, projecting business income, and profits.

Malcolm Tebbutt

Director, Net Commerce Solutions.

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