By: John Elder
Market-Tek Enterprises, Inc.
Welcome to part 5 of the step by step business creation guide. Part 1-4 can be found in our archives.
I have a confession to make. I’d hoped to be able to tell you that I had started promoting the site and sales were pouring in…but the fact of the matter is I didn’t have time to do a single thing with the project this last week.
I didn’t even get a chance to finish writing the backend follow-up letters or open our overture.com or google adwords accounts.
I do apologize for the lapse, I just had too much other work to take care of. It was a busy week.
I did decide to re-write the copy of the web page yet again (I still just don’t quite like the copy that I’ve already written). And I’ve already pounded most of it out in my head, I just need to put it to paper and then upload it to the site.
I think it will be pretty good.
So this week I would like to talk about setting up the overture.com account. As you probably know, Overture.com is the worlds leading pay per click search engine.
That means you can buy targeted “clicks” or visitors to your site. You bid against other people for any specific keyword or phrase that you think best targets your web site.
Overture can be tricky. You don’t want to bid too much for a keyword. You need to really calculate how much each visitor to your site is worth.
To do that you have to calculate your visitor to sales ratio.
This is basically a number that says “For every X number of people that visit my site, 1 person buys my product”.
So if 1 person out of 100 site visitors buys your product, your visitor to sales ration is 100 to 1 (100:1).
Next we would calculate how much those 100 visitors are worth.
Let’s say you sell a $20 product. If 1 out of every 100 people that visits your site buys your $20 product, then each visitor is worth about .20 cents.
Or to put it another way, you should be willing to pay up to .20 cents per visitor. Why? Because if you pay .20 cents per visitor for 100 visitors that equals $20 (.20 times 100).
You pay $20 for the visitors, 1 out of 100 of them buys your product for $20, you have just broke even.
The trick then, is simply to find a way to pay less than .20 cents per visitors. If you can do this, you make a profit (not even taking into consideration back-end sales of course!).
For our project, we don’t know what each visitor is worth yet because we have no site traffic yet, and no sales. So it’s going to be a little tricky at first determining how much to spend at overture.com
I’ll try to spend as little as possible at first until we get a steady stream of site visitors and sales so that I can determine our visitor to sales ratio.
Determining your visitor to sales ratio is not only useful for using overture.com, but for any advertising you
If you don’t know your own ratio, I highly urge you to calculate it. You’ll need to watch your server logs to analyze your site traffic (or use some type of counter to count the number of visitors that come to your site).
Spend a few weeks watching your site traffic and corresponding orders to get as accurate a visitor to sales ratio as possible.
Your ratio will always fluctuate. It won’t always stay exactly the same. If your rate is 250:1 there’s no absolute guarantee that for EVERY SINGLE 250 people that come to your site, one will buy. Sometimes it might be 300:1 sometimes 205:1 sometimes 244:1 but you’ll get a good idea of what the number is generally.
Knowing this ratio number is not just useful for buying advertising. It’s always essential for testing the site itself.
You should always test your site to see if you can tweak it to pull more sales. You might change the headline of your site. Did the change result in more sales? How would you know that if you didn’t know your visitor to sales ratio?
A good business person always tests everything. So knowing this number is one of the most necessary steps of running an online business of any sort.
On another note… I’ve decided to go ahead with selling distributor licenses based on the response I received when I mentioned it last week. There are still 2 licenses left and they’re selling for $1,000 if you’re interested email me at (email removed) before they get snapped up.
That’s all for this week. See you next Monday!