The Importance of Financial Analysis

The purpose of your website is to generate profit for your business. Therefore, you must apply financial analysis in order to determine how your site is performing but also (and more importantly) how it can be improved.

Remember, the language of business is finance.

Internet marketing is all about testing, measuring and analysing. The most important element of this, is using profitability as a key criteria for Internet marketing decisions.

When a business implements financial analysis on their Internet marketing (including website) they have a massive jump on their competition. In Ireland, a vast majority of businesses do not apply proper analysis to their online marketing. Therefore, a window exists to get more new customers by applying structured financial analysis to your online marketing decision making process.

For instance, one technique that should be applied is the Net Present Value (NPV) of future client value. This helps you determine how much is a profitable customer acquisition cost. As a result, it helps you make decisions on ad bids and on profitable conversion rates.

It also should be built into your price setting process.

In essence, financial analysis should be the cornerstone of your Internet marketing and web design.

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Feargal holds an M.B.S. in Entrepreneurship and Marketing and B. A. in Accounting and Finance. He is a member of the Marketing Institute of Ireland. He is an entrepreneur who has been involved in the area of Internet marketing since 2004. He is passionate about helping small businesses make sales.
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