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03.10 20120

The Importance Of Testing And Tracking: Know Your Numbers

Most Internet marketers choose the online medium for its cheapness and effectiveness. You buy a domain name for $10 a year. You buy hosting for $5-10 a month. Push a button in your Cpanel, set up a WordPress blog and presto! You’re online. You are potentially in front of millions or even billions of people. Costs of one more visitor, one more email address added to your list, is so cheap it is negligible.

This makes some Internet marketers forget that Internet is still a medium for direct response marketing. Direct response marketing has evolved mostly by direct mail marketing. Because in direct mail, you pay money for every piece of mail sent, you have to have good copy, good marketing, good conversions. You have to track everything. Otherwise you will go bankrupt soon. On the Internet, costs are so low, some marketers lost the vision for good direct response marketing. Just put something, anything online, that has order or subscribe button online, and hope for the best, see what sticks and go from there.

Well, it worked for a while. But not anymore. With Internet came lots of competition, different new types of scams (from phishing to Princes from Nairobi), and lots of junk sites and junk content that offer no value to the visitors. But visitors are becoming more savvy, as are search engines, email providers, even social media sites fighting with these bad marketing sites.

That is why you need to have a good basic understanding of direct response marketing, first. In direct response marketing, every marketing action you take, is geared towards generating a specific response from a prospective customer. That response may be purchasing a product, opting in to a list, or now with social media, like or join on Facebook, retweet on twitter, pin on pinterest or anything like that. I’ll call this action “the offer”. Do this for me, I’ll give you that in return.

In every direct marketing campaign, there are at least 3 critical elements: The list, the offer, and the sales copy. Now, the list is the people who see your message. The offer is, the action you want them to take. The sales copy is the message presenting them what’s in it for them, and why they should act now.

Now, not everyone that sees your message will act. Not everyone who read your sales letter will buy your product. Not everyone who sees your squeeze page will opt-in. Some will, some won’t. The number of people who do take the desired action divided by the number of people who saw your message gives you the conversion rate. Sometimes, %1 conversion rate on a sales page is good, and profitable. Other times, %20 conversion rates on your squeeze page is bad, and unprofitable. It all depends on your campaign, and how you monetize them, and how much you earn per client.

This is why you need to set up a full sales funnel, and track everything. Let’s say you have a simple sales funnel of 3 products: A short report as given as a free gift to all subscribers, a $27 ebook, and then a $97 upsell product, let’s say, a video course.

Lets say your opt-in page converts %25 of visitors to subscribers. %5 of them buy your ebook. And %25 of ebook buyers upgrade. And lets say, you can bring 10,000 visitors to your site by using paid traffic at $0.50 per click, so you pay $5,000 for those 10,000 visitors. 2500 opt-in to your list. This makes your cost per lead $2. Then 125 of them buy $27 ebook, and you earn 3375$. On the front-end, you lost money, but you gained 2500 subscribers, and 125 buyers. And then 31 of them upgraded to $97 package, and you earned another 3007$. Now you are $1382 in profit. You made your $5000 back and then some more.

When that is the case, you can roll out big. The thing is, you do not achieve these kind of results from day one. First you have an opt-in page and a free report that you give away. You test different opt-in pages and find which one converts best, and gives you subscribers at the lowest cost. Then you test front-end products, and sales copy for them. If you break-even or get close to break even with front-end product, that is great. Then you work on your back-end. Once you have your initial test results, it becomes your “control”. Then you work hard to beat your own control, create better results than your previous best. You do a-b spit tests and choose the one that works best. And once you have a winning sales system in place, you roll out big.

If you always know your numbers, and watch them closely, and always work on improving them, sooner or later you will come up with a winning funnel. This is the real “secret” to riches, that not one in a hundred marketer does correctly these days. Test, track, improve. When proven profitable, roll out big.

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