Talk to people about Internet Marketing and most people will think that you're talking about websites. That's because the website is the most visible, tangible part of a company's Internet presence.

But the website's only part of the overall mix, and the principle mistake that most website owners make is that they think it ends there. They get a site built and publish it on the Internet and wait for the business to come rolling in.

But developing a website and doing nothing else is like printing a brochure and leaving the only copy in your desk drawer. If you did that, it wouldn't suprise you if you didn't get any business from it, and yet many people publish a website and then wonder why they didn't get anything out of it.

In the worst cases, they then blame the Internet. Do you know, even this day and age I still meet people who think that the Internet doesn't work?! Or that you can't do business on it?!

Some people think that it won't work for their particular business. Well, that's baloney, frankly, you can market anything over the Internet, any business, any product, any service, any idea. And you don't even need a website to do it.

Internet Marketing is the process of promoting a business, product, service or idea using the Internet as a tool. A website is one way to achieve this, but the best website in the world is useless if nobody visits it.  So there's also the important question of how to bring your lovely website to the attention of your customers.

Internet terminology has a lovely word for people who visit your site - "traffic". That's you and me, as we browse around the web, that's what we are, "traffic". Triffic innit?

Internet marketers, web designers and SEO consultants will tell you that you must increase traffic to your site, and companies spend thousands of pounds, sometimes millions of pounds, driving "traffic" to their site. This is only part of the truth.

Actually, there are two very effective ways of wasting money driving traffic to your site, and to illustrate these techniques for squandering your hard-earned I find that it often helps to visualise something physical.

So imagine that your website is a shop. You've spent an awful lot of money getting the inside of the shop exactly how you want it to look, but you haven't got any customers. Why? Well, your shop is up a side alley, off the main road, and nobody can see it as they walk along the pavement.

So you need to "drive traffic" into your shop. How do you do that? Many techniques that are used on the Internet to "drive traffic" are a bit like standing on the main road and diverting every person who is passing by down the side street and through your shop.

Of course, that would be crazy - thousands and thousands of disinterested people traipsing through your premises, irritated that they have been sent there and hardly anyone buying anything. And if I asked you to pay me money to bring vast volumes of disinterested people into your shop, you would think I was mad.

Same goes for your website. It's crazy to spend money sending untargetted traffic to your site. Amazingly, though, people do it.

OK, so what's the second great way to waste your marketing money? Let's go back to the shop, you've now got a steady stream of interested people coming into the shop, and the things that they want are there.

It's just that they can't find them. Some of them are on shelves that are out of reach and not labelled. Some of them are behind row upon row of fancy displays that look great, but just get in the way. Some of them are in the store room out the back.

Soon, half your interested customers have left the shop. Those who persevere, and finally manage to pick up what they want, then can't find a till, can't find a shop assistant, or have questions that nobody can answer. Only the most determined customer will remain.

Worst of all, the shop keeper doesn't even know how many people came into the shop, how many people stayed and how many people left. He only knows how many people bought something. He has no idea who walked out, and not only that, he has no idea why they left.

Many website owners today are beginning to realise the importance of driving traffic to the site, and are starting to invest in SEO, pay-per-click campaigns, email marketing, banner advertising, forums and blogs.

What is far less common is taking the time to understand how people behave on your site, and investing time and/or money in improving the conversion rate.

(The conversion rate is the percentage of visitors to the site who take the desired action, whether that's buying something, filling in a contact form, using an online tool or picking up the phone).

Why is this important? Well, the profitability of a website is the product of a simple formula.

Profit = Traffic X Conversion Rate X Lifetime Value of the Customer

So there are three ways to improve the profitability of your website; increase traffic, improve conversion rates and increase the lifetime value of each customer.

Returning to the shop example, if you could stand out in the traffic and identify who out of the people passing by might be interested to visit your shop, they would be pleased to come. Your shop would then be filled with interested customers, glad that they had found you.

When they arrived in your shop, if it was easy to find what they were looking for, service was quick and efficient, their questions were answered and the till was where they expected, fully manned and easy to go through, sales would go through the roof.

And if the shopkeeper carefully observed how people behaved, and gathered feedback about what people liked and didn't like, he would have some really useful information. If he knew why people bought what they did, and why people left without buying anything, he could use that information to improve the shop.

So one of the big mistakes that internet marketers make is thinking that more traffic is better by definition. The truth is that it's targetted traffic that makes the difference. Another big mistake is thinking that it's all about traffic, and not paying enough attention to conversion rates.

Typically internet marketers will talk a lot about SEO, and encourage customers to spend a lot of money on that, but not give a moment's thought to conversion rates. Many don't even know how to monitor your visitor activity, beyond Google Analytics, which although useful can only tell you part of the story.

And as for web designers .... well, a lot of them will design your website to look nice, when actually what you need is not just an attractive site, but a functional site that achieves your objectives.

So if you're marketing your business on the Internet, remember the magic formula:-

Profit = Traffic X Conversion Rate X Lifetime Value of the Customer

If you're engaging an Internet Marketing company to do the work for you, ask them how they intend to monitor and improve your conversion rates. If they can't answer or they waffle, politely bring the conversation to a close and move on to the next marketer on your list.

And if your web designer doesn't start off by getting a thorough understanding of your business objectives, and then ask you what specific action you expect from each and every page on your site, then the person you're talking to is really a graphic designer with a few HTML skills.

(They may still be useful, because this kind of web designer will often produce great looking sites - just be sure to involve an internet marketer before you finalise the design, to make sure that the site will work and not just look pretty.)

In a future blog, I'll write about how to increase the lifetime value of each customer. Meanwhile I hope you have found this post useful, and please feel free to comment and come back again sometime.

Cheers!

Murray

PS - If you want to study the REAL experts in improving conversion rates, visit www.conversion-rate-experts.com. Make sure that you read their world famous report about website optimisation, and sign up for their newsletter.