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How do you balance optimizing a traffic source vs. diversifying with a new one?

by stanigator
2 replies
I know...this is a pretty big question.

I've heard a lot of advice when one asks about traffic source diversification...you likely haven't optimized your most profitable one enough.

That said, I believe there's a point where spending your own attention to optimize the traffic source yields diminishing returns compared to working on a new source.

So here comes my questions:

1. How do you evaluating whether you are getting diminishing returns compared to teaching the process to a virtual assistant so that you can work on a new traffic source? Evaluating whether you have significant tests remaining?

2. Do you focus on optimizing one source at a time, and then move on to another traffic source once continual optimization leads to diminishing returns?

3. How many sources in the long term do you usually end up with? 3, or as many as your team can handle concurrently?

Hope these questions don't sound too hypothetical.
#balance #diversifying #optimizing #source #traffic
  • Profile picture of the author Sid Hale
    Hi stanigator,

    You're right. It is a big question, so I'll give my take on this in a pretty broad brush manner and we'll see what other, more specific questions come out.

    Originally Posted by stanigator View Post

    I've heard a lot of advice when one asks about traffic source diversification...you likely haven't optimized your most profitable one enough.

    That said, I believe there's a point where spending your own attention to optimize the traffic source yields diminishing returns compared to working on a new source.
    I think this is true with any strategy you develop for your business, and the most helpful metric to use when deciding about modifying a strategy is risk vs. reward.

    As you said, there comes a point of diminishing returns (either in the form of less traffic, or lower conversions). The same incremental increase in effort/cost no longer produces the same increase in ROI.

    That means that to evaluate the true worth of further optimizing a traffic source requires that you know all of your incremental costs related to using a given strategy, as well as the income that results from that increased traffic.

    So here comes my questions:

    1. How do you evaluating whether you are getting diminishing returns compared to teaching the process to a virtual assistant so that you can work on a new traffic source? Evaluating whether you have significant tests remaining?
    As I said earlier, returns should be measured in dollars - not visitors. Depending on the cost of your traffic source (including the time/effort to manage that source), you may be able to justify working more/longer with that source IF you can reduce the cost associated with that source (i.e. by transferring the labor component to use a less expensive resource - i.e. a VA)

    2. Do you focus on optimizing one source at a time, and then move on to another traffic source once continual optimization leads to diminishing returns?
    Initially, maybe (esp. if you're doing it all yourself). But I think that you should begin developing new sources as soon as possible. Diversified traffic means you have less exposure (risk) to your success with any given source of traffic.

    If you spend 60 days optimizing your first traffic source, you don't want to have all your eggs in one basket for that first 60 days.

    3. How many sources in the long term do you usually end up with? 3, or as many as your team can handle concurrently?
    Everyone should make their own decision here, but understand that the fewer traffic sources you have... the more dependent you are on each one of them. If you have 10 traffic sources, each delivering you approximately the same level of traffic, each one is responsible for 10% of your total traffic.

    If for whatever reason, one of them disappeared tomorrow - how long could you live with the 10% decrease in revenue?
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    • Profile picture of the author stanigator
      As I said earlier, returns should be measured in dollars - not visitors. Depending on the cost of your traffic source (including the time/effort to manage that source), you may be able to justify working more/longer with that source IF you can reduce the cost associated with that source (i.e. by transferring the labor component to use a less expensive resource - i.e. a VA)
      You're referring to cost per click, cost per customer acquired, cost per webinar attendee, profit per customer/click/webinar attendee, right?

      Initially, maybe (esp. if you're doing it all yourself). But I think that you should begin developing new sources as soon as possible. Diversified traffic means you have less exposure (risk) to your success with any given source of traffic.

      If you spend 60 days optimizing your first traffic source, you don't want to have all your eggs in one basket for that first 60 days.
      Define "as soon as possible." I'm always afraid of the risk of putting too many eggs in one basket. I am rotating between 2 different ways at the same time. One's downtime is time to work on another.

      Everyone should make their own decision here, but understand that the fewer traffic sources you have... the more dependent you are on each one of them. If you have 10 traffic sources, each delivering you approximately the same level of traffic, each one is responsible for 10% of your total traffic.

      If for whatever reason, one of them disappeared tomorrow - how long could you live with the 10% decrease in revenue?
      I like your counter-question. Thank you for your insights!
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