Do you know your conversion rate? What about your cost per
visitor? All the terms basically deal with the same question:
Do you know how much a visitor is worth to you? So that, when
you purchase advertising, you won't end up overpaying?
Internet marketing, it's been said, is a numbers game. This
becomes critically evident after you've finalized your web site
and offers, gotten a few sales under your belt, and are ready to
go wide with your advertising effort.
So ready to get out there and make some real money? But
wait...do you know how much advertising to buy, what you can
afford?
Follow the steps below, to determine your numbers, before you
spend so much as a penny!
1. Determine How Strongly Your Web Site Is Pulling
First, get a handle on your traffic. These numbers can be
retrieved from your hosting service's server logs. Many, if not
most, web hosts provide a traffic log feature as part of their
standard package.
If you aren't sure whether your host offers this, ask!
Choose a time period to analyze - either a week (if you have
high traffic) or a month.
Examine the logs - during your chosen time period how many
visitors came to your site? How many sales resulted from this
traffic? This is your visitor to sales ratio.
To make it easy, say that you receive 1,000 visitors a month,
and ten of them buy something from you. Your visitor to sales
ratio is 100 to 1 (1,000 divided by 10).
If you receive a higher level of sales, say 20 for the same
1,000 visitors, your ratio would be 50 to 1 (1,000 divided by
20).
Then, you take this ratio and apply the profit per sale. So,
using the 50 to 1 ratio from above, if you closed one sale for
every 50 visitors, and your product costs (and yields a profit
of) $50, you can pay up to a dollar for that visitor, and break
even.
The numbers:
1 sale, multiplied by $50 per sale, divided by 50 visitors,
equals $1.
Now, your goal is to pay LESS than the $1 cost per visitor -
this difference is your profit.
You have to have a firm sense of your cost per visitor before
moving forward with an expensive advertising campaign! Or you
may soon find yourself overextended, and operating in the red.
2. Capture Those Non-Customer Email Addresses!
Now, before you run out and start to place ads, there will be an
increased level flowing through your site very soon. Remember
our 50 visitor to one sale ratio from earlier? One will
buy...but 49 won't. You have to have a way to capture the
non-purchasing visitor emails for future marketing efforts.
How to entice them to give up their addresses? Have sign up
fields to your ezine on each and every page of your web site.
Offer free information, in return for their email addresses (a
free report, a multi-part mini course, a free ebook, etc.)
3. Track Your Way To Success
Finally, before you start advertising, you must have a way to
track your results. Otherwise, you'll have no way of knowing
which advertising vehicles are performing for you...which to
keep, which to discard.
Sam Robbins' Adminder is one piece of software that is highly
rated, and heavily used: http://www.adminder.com
If you successfully do all three of the above, you'll be able to
proceed with placing your ads with confidence, firm in the
knowledge that you're operating your business at a profit (and
not running in the red).
