You've probably heard the story of the tourist who stopped the old timer to ask the way and the old timer replied, “If I were you, I wouldn't start from here!".
That's actually wise advice, if you're planning for on-line success, and here's why.
It's far easier to figure out how to get somewhere, if you start from where you want end to up, and work backwards. So, if you want to make the usual internet target of $1,000,000, the way to work towards this is to reverse engineer your steps back from this target.
First you need to know the profit you make on your products. Let's say, you make a net profit of $17 on your entry level product, $85 on your next most expensive, $237 on the next and $1,478 on your top of the range item.
So, for every 10,000 visitors to your web site, you can expect to eventually sell 150 items at $17 (150 X$17)= $2,550 - depending how good your sales page is. Once these 150 customers find out how good your basic product is, they will be far more responsive to buying a second, related product, despite it being a higher price. So, you could expect perhaps 25% to buy your next product, which gives you (37 X $85)= $3,145 Because that product is also great value, you might convince as many as 60% of these to buy your third product, which gives you a profit of $237 a time (22 X $237)= $5,214. And of those as many as 85% of them might be so delighted with your products by now, they will buy everything you produce and so they will be happy to come along to your seminar at $1478 a pop, making (18X $1,478)= $26,604.
You can now see the real secret of marketing in any business: your real profits come from doing repeat business with the same people. This is because as their confidence in your products grows, they move up the purchase staircase, making larger and larger purchases with growing confidence. So always strive to keep the most important person in your business happy: your customer. Because it is not your detractors, the government, the IRS or anyone but your customers who will buy you that house at Huntingdon Beach, pay for these holidays in Bali and pay for the contents of your wife's very large walk in closet.
More than that, you now have a handle to see how much traffic you need to generate to make the link between where you are now and where you want to be. To do this you need to calculate how much each tranche of 10,000 visitors is worth to you. And that's now just a simple matter of adding up all the profit you made by selling your range of four items. That totals $37,513. Divide that total by 10,000 ($37,513 divided by 10,000) = $3.75. That means that every visitor to your site is worth - on average - nearly four bucks, even if they never buy a thing. You can now also see the validity of Vilfredo Paretto's 80/20 rule, because the bulk of your profits has come from the vital 20% of your original 10,000.
So, if you have a target of a million dollars, all you need do, to find out how many total visitors you need to visit your site, is divide $1,000,000 by $37,513 and multiply by 10,000. This comes to a target of 266,574 visitors to aim for. Break that down over a couple of years and it comes to just over 11,000 a month, which is not an unreasonable amount of visitors, to build up to, provided you are smart and lay proper foundations that are free and will continue to attract quality visitors for months - even years - to come.
These are, of course, hypothetical figures and theories are all very well, up to a point. But let's suppose, despite your best efforts, you can only get 5,000 visitors a month. Does that mean you will only be a half-millionaire? Not at all. Because there are many things you can do to increase your visitor value from $3.75 each and get it up towards eight bucks. That will make up the shortfall of visitors by squeezing double the value out of your existing visitors. You can do this in several ways. You can survey your satisfied customers and ask them what other products they need and provide them. You can offer affiliate products you have tried and tested (but don't risk your customer base by offering any old stuff). You can create a member's area for a monthly fee.
Believe me, when you get to that stage the level of success you have already achieved will impact on your confidence and you'll have more ideas than you have time to action.
Copyright 2006 Paul Hooper-Kelly and www.InternetMarketingMagician.com
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