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My Version Of … “The REAL Story About How To Make Money Online”
April 21, 2013
What is a product funnel
April 23, 2013

Traffic, Products & CONVERSIONS …

Yep that’s right, conversions are super important!  You’ve probably heard the saying “you can’t improve what you don’t measure” … well in the world of Internet Marketing, it is very true and very important!

So what does “conversions” mean?

The simplistic definition is this … conversion is the percentage of people moving from one stage to the next stage, see examples below:

  • phone caller to appointment
  • appointment to sale
  • ad view to ad click
  • website visitor to lead/prospect/contact opt-in
  • email send to email open
  • email open to email click
  • email click to email sale

Those are a few basic metrics you will want to study conversions on.  What I can tell you from experience is this, if you aren’t already someone who loves to look at numbers, and obsess over understanding what they mean and how you can improve these then you are in for a very long road ahead.

Let me paint a very real and typical picture for you.  You find a great product to market and hopefully sell (it can be an affiliate product or your very own product -it does not matter), you setup a nice landing page to collect the emails before sending them to a sales page …*more on why you want to do this vs’ sending them directly to the product sales page later) and start sending traffic to the page ( for the purpose of this example let’s assume you are using Paid Traffic).

You spend X dollars to generate 100 unique visitors to your product landing page, 20 of the 100 visitors opt-in to your website and pass onto the product sales page and you make ZERO sales.  Unfortunately this happens 🙁

Most of us think … no problem I need more traffic!  Well this is true, BUT it is not what you need right now in this scenario!!!!

I want you to pay attention here because nobody told me this and to be honest I wasn’t smart enough to know it starting out and furthermore it isn’t a natural strong suit for me so I didn’t measure my conversions for a very long time (stupid).

Measuring your conversions is CRITICAL!

Here’s why.

Let’s assume you were measuring the different elements in our example, you would know the following:

  • you spend X dollars to get 100 people to your website “landing page”
  • you got 20 people to give you their email on the landing page opt-in  (**knowing this number gives you the first bit of intelligent data, for example you now know that X dollars will get you an estimated 20% opt-in, plus it gives you your lead acquisition costs. So if you had spent (for easy math) $100 to get the 100 people to your site, you would have spent $1 per email lead
  • In the above scenario I assumed ZERO sales to make a point, but to completely illustrate this example let’s assume you made 2 sales (you would then know that your product sales page converted at 10% (ie. 20 opt-ins / 2 sales = 10%) and you customer acquisition cost would be $50 ($100 total spend to get 2 sales ($100/2 = $50))

So the takeaways here should be …

  1. ALWAYS measure the conversions at every single step in your sales & marketing processes
  2. You MUST be prepared to spend money on paid ads in order to get the traffic you need to undersand the many different conversions (again this is a HUGE and VERY COSTLY mistake I made starting out -nobody told me this!)  *this in itself is enough reason to borrow money or bring on an investor if you need to, because once you have these conversions dialed in you will be making money.
  3. You MUST know your customer acquisition costs, because only after you know it can you truly determine your Profits Per Customer and/or the Lifetime Value of your Customer

I hope this post has given you some valuable insight to the real world of making money online.  In my next post I am going to outline the specific steps of what is commonly referred to as “the funnel” –> a good funnel will make  you a ton of money, a bad funnel will cost you a ton of money.

Leave a comment below and let me know if these 2 posts have been valuable to you, let me know where you are at with making money online from your God given talents, ideas and passions …

Read the previous post here:  The “Real” Story To Making Money Online

You can continue reading the next post in the blog series here: What is a Product Funnel