Why “Free” Traffic Is Never Really Free

So Start Calculating Your Return On Time (Investment)

Before starting on a new project or marketing activity, you should follow the 3 easy steps below to calculate your Return On Time.

After all, wouldn’t it be nice to know if you’d make a better hourly rate working at your local vegan burger chain?

This also means calculating the leverage you’ll get out of the activity.

Is your latest great idea going to be a one hit wonder, or something you can leverage for years to come?

Step 1 - How Much Traffic Will It Generate?

If you invest 4 hours writing an amazing article for your website that has no SEO rankings, then you might only get 100 people to read that article over its lifetime.

But if you use Content Syndication to put that same article on a popular vegan website that normally gets 1,000 article views per month because of its SEO ranking, we’re making progress.

However, if only 10 people (1%) click from the article to your website each month, then you’re basically in the same situation (with the addition of some increased brand awareness).

So you first have to objectively look at how much traffic you’re likely to get from this activity.

Step 2 - What Is That Traffic Worth To You?

If your Shopify store conversion rate is 2.5%, then you’re getting 3 sales from your 120 visitors per year.

If the first sale is worth $39.99, then you made $119.97 in revenue.

If the average Customer Lifetime Value is $1,119.72 (one purchase of $39.99 every month over 28 months), then 3 new customers brings us $3,359.16 in future revenue..

This helps us put a value to the traffic because there is always the opportunity cost of other activities we could be doing.

Step 3 - Calculate Your Hourly Rate

The 4 hours we took to write the article made us $3,359.16 over the next 28 months (ignoring revenue from year 2 to keep it simple and allow for the risk of it losing its top SEO ranking).

So our hourly rate is $839.79, which doesn’t sound too bad.

If we could invest 4 hours per week for the entire year and the math stays the same, then that time investment could bring us $174,676.32 over the next 28 months.

At the end of the day, business is about investing your most precious resource (your time), to create the biggest leverage.

Evaluate Your Alternatives And Choose Wisely

Alternatively, what if I invested 4 hours to create an ad that I placed on that popular vegan website and it was shown to people reading all the articles instead?

Then I rolled that profitable ad out to many different vegan websites with a minimum of time invested once they were set up and launched.

These are the important decisions we’re faced with every day as business owners.

So just make sure you’re using your time in the most effective way possible…

Because “free” is very rarely free.