Simplifying Your Internet Profits and Processes
The INPROFIT ratio is the most important ratio that you need to
know to determine the health of your entire Internet operation.
It incorporates factors related to your internet versus total
revenues, a valuation for traffic, total customer acquisition
costs, support costs, earnings per visitor (EPV) in a complex
but extremely helpful equation.
The INPROFIT ratio is being successfully used by CTO, CIO, CFO
and CEO to better manage internet profits within the
enterprise.
Since more traffic is not always better, we integrated the
EPV (earnings per
visitor) into the traffic equation. This way if a site receives
a
million visitors but only earns $0.02 for each of them then
they are
equal to a firm who makes $2.00 per visitor but yet only
receives
10,000 visitors.
Thus it links the quality of your traffic and your operating
costs. If you’re spending more in marketing, advertising, SEO,
etc. to receive that traffic then you’re actually earning in
revenues then this will reduce your revenue valuation.
similarly there are many others variables that go into a the
INPROFIT ratio, but it creates an apples to apples comparison
and a unique benchmark that can be used as a starting point for
comparative purposes, even as your business changes and
expands.
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