How Much Traffic Do You Need to be Profitable?

“A small targeted number of loyal fans are better than thousands of uninterested followers.”

You’ve probably read a similar line a million times before. Articles on growing your business or social media accounts are full of these helpful reminders to keep us business owners from getting too numbers crazy. And we all know numbers never really tell the full story…

Yet, they pull us in every.single.time.

Even though we hear it again and again, we never really embrace it. The allure of having a large Instagram following or being able to say “10,000 people visit my site!” often seems to outweigh any profit driving activities. Not only that, but we set goals that are literally plucked out of thin air – we’re basically the business equivalent of Regina George.

“I really wanna lose 3 pounds.”

“I really want 10,000 Instagram followers.”

Except guess what?

Regina George probably set a better goal than you.

Because technically, she set a SMART goal:

  • Specific: Very. Three is an oddly specific amount.
  • Measurable: She can weigh herself or have her cool mom help.
  • Attainable: She really gave it her all with those Kälteen bars.
  • Realistic: Yes, before she had to shop at Sears she fit into one of these sizes: 1-3-5
  • Time-Bound: By the Spring Fling, duh.

So today, I thought I’d shed a little light on traffic and what it actually means to your business. And more importantly, your sales + profit. So you can set a Regina George worthy traffic goal, no more random “if only I had 10,000 pageviews”.

How Much Traffic Do You Need to be Profitable - Increase Your Traffic the Right Way

Why Targeting Matters:

Quality traffic is like the difference between an honest steady boyfriend and a flashy smooth talker.

THE STEADY BOYFRIEND:

He makes you feel good always: he’s genuinely nice and shows up when promised, maybe even with wine (or a big bag of tacos, whatevs).

These are your interested followers that consistently like your photos, leave comments, and actually engage in what you write in your captions or blog.

THE FLASHY SMOOTH TALKER:

He gets you all excited and you’re proud to show him off, only for him to completely let you down in the end: he forgets to include you in plans and sends shitty texts like “hey babe *eggplant emoji*”, before ghosting you for days. Dayyyys ladies.
(sidenote: if this is happening to you, you deserve better!!!)

These are the random followers that follow a ton of accounts or that you gained during an unfocused giveaway where everyone and their mom joined to win a free iPad. Sure, it feels good to say, yeahh that’s my account, but when you’re getting just a handful of likes and no comments, you’re surprised by how empty you feel.

Which scenario would you prefer?

Sure, it’s fun to have the hot bad boy that makes your head spin (ie. my equivalent for a big flashy Instagram following or thousands of website visitors). But at the end of the day if you can’t hold a genuine conversation or count on him to show up for you – what’s it all for?

Meanwhile the nice guy is sitting there, actually answering your texts, and following up on date night, excited to see you.

(uhhh is she still talking about business here?)

Yes, yes I am… hold on. There’s so many Mean Girls references I’ve yet to make and it’s making my head spin. Something about Cady getting caught up in the cool girl club, but secretly loving being part of the Mathletes…

 

 

Ok. I’m back.

Targeting matters because math matters. Math is your steady boyfriend, get used to it in retail.

1,000 loyal followers that convert at 10% = 100 sales

10,000 flaky followers that convert at 1% = 100 sales

Math. MIC DROP. Crazy to see, right? If you attract a good, loyal, dedicated following that actually cares about what you create and wants to be a part of it, your business could be equal to that of someone with a “big following” of 10,000 so-so followers.

So, back to the original question – how much website traffic do you need to be profitable?

Let’s find out >>>

Don’t run yet… I promise I won’t drag you through this math without a super easy worksheet. Grab yours below!

HOW MUCH TRAFFIC DO YOU NEED?

Grab your free worksheet and let's figure out how much traffic you *really* need to be profitable.

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(Concerned about the retail math? Check out this Retail Math 101 article first!)

Step 1. Find your current conversion rate. 

Pick a time period and determine your number of orders placed (not the sales dollars or units) and number of website visitors.

(number of orders) ÷ (number of visitors) = conversion rate

For this example, let’s say your number comes out to 1%.

Step 2. Determine your target monthly sales.

This is your revenue, or the actual dollars you want to bring in each month.
But since we don’t care about sales, we care about money money in da bank; we’ll get to this number by determining how much profit you want to make and work backwards to find your sales goal.

For example, you want to make $1,000 in profit each month and your average gross margin is 45%.

Take profit goal ($1,000) divided by margin rate (0.45) = target sales ($2,222.22).

Step 3. Determine your target monthly orders.

Next we need to take our sales goal and convert it into number of orders. Take a look at your past stats and calculate your AOV (average order value).

Using the same time period as your above conversion rate, calculate the below:

Total Revenue (sales $$) divided by number of orders = Average Order Value

For example, if your total revenue was $3,500 and you had 70 orders = $50 AOV

Now we can find your target monthly order number: Target sales ($2,222) divided by AOV ($50) = you need 44.4 orders per month.

Step 4.  Find your monthly target visitor number.

Take your target monthly order number and divide by your current conversion rate.

Monthly Orders (44,4) divided by conversion rate (0.01) = you need 4,440 visitors per month


Now let’s look at a few scenarios of what would happen if your conversion rate improved… you worked really hard to attract the right people. No crappy follow/unfollow tactics and no chasing numbers just for the sake of feelin’ fancy on Instagram.

1. If your conversion rate improved to 2 percent (which is often considered the industry standard)

44.4 / 0.02 = 2,220 visitors per month

With that seemingly small change, the number of potential customers you need to visit your site drops in half. 2,220 is super achievable!

2. Now what if your conversion rate went to 3%, which is totally doable

44.4 / 0.03 = 1,480 visitors per month

3. Or what if you have really engaged customers converting at 10%

44.4 / 0.1 = 444 visitors per month

That’s just 15 highly engaged people visiting your site a day.


I hope this helps you see how powerful a super engaged, but small audience can be for your business.

If your head is completely spinning and you can’t decide if you hate me or math more… come on now, I got you.

Did you grab your free worksheet? You only need to find 5 numbers! Input them into the yellow cells and boom. bam. the form will calculate the rest.

So grab your worksheet. Set aside 5-10 minutes to gather your numbers. And let’s do this Regina!

HOW MUCH TRAFFIC DO YOU NEED?

Grab your free worksheet and let's figure out how much traffic you *really* need to be profitable.

Powered by ConvertKit

And always remember….

Be the Regina George of Goal Setting - The Shop Files

 

Do you really need a huge Instagram following to be profitable? Heck no!

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