Before you can make money online, you must know the answer to these 3 questions:
1. What products and services sell for a profit on the internet.
2. Where to advertise your product or service to attract buying customers.
3. How to sell your product or service to convert website visitors to buying customers.
The amount of money which can be made from your internet site depends on:
- The strength of your value proposition. (Benefits must exceed the price paid, educate your customers on the value of your offer in relation to the price paid.)
- The strength of your unique selling proposition. (The reason why people should buy from you rather than a competitor.)
- How many people visit your website and hear,see and understand your marketing message.
- How many people buy your product or service. (Your sales conversion rate)
- The profit made per sale after taking into account all costs.
- The lifetime value of a customer. (How much profit can be made by making future sales, cross-selling and up-selling. All internet marketers who make big money have their own marketing list and make new sales offers on a regular basis.)
- The strength of incentives and rewards to get existing customers to refer new customers to your business to increase sales. (The viral markeing aspect of internet marketing has become very important as competition amongst sellers has driven up paid advertising costs significantly. In fact, the best internet marketers do not use paid advertising, they use viral marketing strategies to grow the customer list.)
- The effectiveness of your marketing message. Your marketing message should convey to your target audience (a) The obvious easy to understand benefits of using your product or service, (b) an important point of difference from your competition, and (c) a reason to believe or proof that your product or service will deliver the benefits as promised.
Most websites never make a profit. Most websites never attract enough targeted visitors to make a profit. This is because most webmasters focus on the technical aspects of website design and do not put enough thought and effort into promoting their websites. Here are a few strategies used to turn unprofitable websites into financially viable websites.
Provide high quality timely content.
On the internet ideas which spread win. Make sure that the content on your website is interesting to the websites target audience. Make the content compelling enough that people pass it on to their friends and associates. Timely interesting content gives people a reason to return to your website. In the long run it is the quality of your content that determines the popularity of your site. Website rankings in search engines are primarily determined by how many other sites provide links back to your content and the page rank of the sites linking to your website. The better quality your content is, the more sites will link to your website increasing your search engine page rank.
Optimize your website for the search engines.
A search engine optimization specialist can optimize your website code, content and link structure to get the maximum number of targeted visitors for important search keywords and phrases. A well researched search engine optimisation strategy brings organic search traffic month after month. A good SEO consultant is able to provide a positive return on your investment in their services. Submit your website to the major search engines and directories. The most important search engines are Google, MSN, Yahoo, and the Open Directory Project (DMOZ).
Opt-in email marketing
An opt-in email list is a list of people who have given permission to you to send marketing emails to them. You can build your own list or buy/rent a list. You can joint venture with another business that has a list of customers interested in your products and services in return for a share of the profits from sales. Get your joint venture partner to endorse you and your products/services to their customers. Joint ventures can be the fastest way to grow your business when done properly All internet marketers should be building their own email list to grow their income.
Pay per click campaigns
You can bid on search keywords and phrases on a pay per click basis to bring targeted traffic to your website. Ad words is Google’s pay per click advertising system. The advantage of this strategy is that you can buy traffic to get immediate results. Successful professional internet marketers use this technique to make a lot of money, however most novices do not make money. The key to being successful with this strategy is to know your numbers and statistics.
Sending targeted advertising messages directly to mobile phones is a good way to promote your business. Admob is a company through which you can send targeted messages to mobile phones based location and mobile phone user demographics. When received the mobile phone user can be prompted to return your call, play a video or mp3 file with your marketing message on their phone, or click a link to take them to your website. The advatages of this method is that the messages are targeted, stored on the mobile phone for future reference, and a low cost but effective advertising strategy.
Example: Calculating Profit and Maximum Cost Per Click for a paid advertising campaign.
Profit = Profit Per Sale x Number of Visitors x Sales Conversion Rate (The % of people who buy)
N = Number of Visitors
P = Profit Per Sale
CPC = Cost per Visitor
C = Sales Conversion Rate as a percentage of total visitors
Profit from Campaign = N((P X C) – CPC)
N = 1000
P = $100
CPC = .10
C = 5%
Profit from Paid Campaign = 1000(($100X.05)-.1)=$4,900
Expected Profit Per Click = P X C
Maximum Cost Per Click = (PXC)
BreakEven Cost Per Visitor = $5 = $100X.05
The maximum cost per visitor that can be paid wiothout making a loss is determied by profit per sale and the sales conversion rate. In this example if we paid less than $5 per visitor theoretically we would make a profit.
Pay for action campaigns
There are a number of marketing companies that will charge you a fee based achieving a given result rather than paying per click. Your bid would only become payable if a visitor completes a task such as submittig their email address, filling out an application or order form, or makes a trial or full purchase.
Affiliate marketing campaigns
This strategy involves getting people to sell your product/services in return for a commission. Each time a sale is made from an affiliate’s website a tracking system records the transaction and credits the commission earned to their account.
Viral marketing campaigns
A viral marketing strategy involves getting people to pass on your marketing message to others in return for a reward. This strategy requires:
– A high quality product or service
– A simple marketing message that can be passed on without distortion (i.e. via email, online video, web page)
– A strong incentive for people to refer others.
– A simple easy process by which people can refer others
– An irresistible offer that compels people to buy.
A free application which encourages visitors to refer your website to friends and associates is Social Twist. Social Twist taps into your visitors existing email, face book, twitter and many other social networking contacts making it easy to refer others to your website.
Viral Marketing Example:
We find 5 people who each refer another 5 people to our website per month. Every person only refers 5 people. How many people would have been referred to our website at the end of 6 months.
a = Initial people referred by us = 5
r = Number of people referred per unit of time by each new person= 5
n = number of units of time = 6
a(r^n – 1) / r-1 = number of people
5(5^6 -1)/5-1 = 5(15624)/4 =19,530 referred to our website
Assuming the same conversion rate and profit per sale as in our previous example then total profit:
19530 X .05 X 100 = $97,650 in profit
Offline marketing and advertising
Buy radio, newspaper, magazine, classified ads or TV advertising. Add your website address to all your business stationery. Add your website address to all outgoing e-mails. The key to this strategy is the know your numbers and statistics. Calculate how many sales need to be made to meet your target return on investment as an indicator of risk.
Write an interesting article about your business, products or services. Make the article interesting so people will pass it on. Submit your article to popular article directories such as ArticleCity.com, ArticleDashboard.com, and EzineArtilces.com. Post a news story about your business to news feeds like Digg, Shoutwire, Plime and NewsVine.
Websites like google video, you tube, and brightcove make it easy for anyone to post video to the web. Video websites attract huge online audiences. Video’s posted to the popular video sites are indexed by all the major search engines. Make an interesting video and post it to the web. Video is fast becoming the medium of choice for marketers. A picture is worth a thousand words and there is evidence that a well thought out video presentation out sells all other marketing mediums.
Website promotion is not optional. In order to have a financially viable website, website promotion is a required investment in terms of both time and money. When done properly the returns on investment can be very high and well worth the time and effort
Consumers avoid risk and uncertainty. Consumers buy from people they trust and know. Increasing sales conversions involves increasing trust, adding value and removing risks from the customers perspective.
Strategies that are proven to increase sales include:
– Generating referrals and word of mouth advertising from existing satisfied customers.
– Genuine video or written testimonials from satisfied customers and industry experts.
– Offering a free trial period
– Offering a no risk money back guarantee
– Give people a reason to buy immediately. Make your offer available only for a specific time period, give people a bonus or discount if they buy immediately or within a specific time period. Make a special offer available to a limited number of customers to encourage quick sales.
– Making a compelling offer that is better in some way than your competitors offer eg. lower price, better quality, longer warranty, unique bonus, money back guarnatee, trial period etc..
– Providing more value to customers that your competition. eg. Provide a free bonus that adds value from the customers perspective when they buy your product.
– Getting your website certified as a safe place to shop online by a recognised website certification authority or your industry association.
– Video demonstration of the product being sold showing overt benefits, dramatic points of difference from your competitors product and reasons why customers should buy from your business.
– Providing up-sell and cross-sell opportunities to customers.
– Growing your own customer database/lists and making compelling sales offers and providing opportunities to refer their friends in return for a worthwhile reward.
– Offer valuable new products and services to targeted customers in your customer database on a regular basis.