Here’s a secret about traffic.
You don’t need a lot to be successful. (Although the more successful you become, the more traffic will come to you…)
You only need to be effective at 9converting that traffic into money.
The more effective you are, the more successful you’ll be. And the reverse is true too. Bringing in more traffic without being able to effectively monetize it will eventually put you out of business.
So how much money is enough to be “effective”?
In my Founders Club report Beyond Traffic I told the story of Pets.com…
They were paying roughly $270 per customer to get traffic, but only monetizing that traffic to the tune of about $75.
Would more traffic have helped Pets.com? Not at a cost of $270 per customer.
What you need to succeed is to be effective – to generate more money than the cost of the traffic you get.
And metrics are all about how figuring out effective you’re being.
Metrics and More Metrics
There are a lot of measure these days. There’s the traditional alphabet soup of metrics you’ve probably heard of… CPA (Cost Per Action), CPC (Cost Per Click), CPL (Cost Per Lead), CR (Conversion Rate), CTR (Click Through Rate), EPC (Earnings Per Click), AOV (Average Order Value), PV (Page Views), Unique Visitor, CPM (Cost Per Thousand), ECPM (Effective Cost Per Thousand) and on and on…
And more recently there are newer ones to help measure the effectiveness of your social efforts. Metrics like… Search Volume, Share of Voice (SOV), Page Rank, Page Likes, Reach, Engagement, Tweet Impressions, Mentions, Followers, Likes, Retweets, Influence, etc…
The most important metrics, however, are the ones that show how effectively you’re converting the traffic you get into money. (Like the two we talked about in my last post.) But before you can figure out how much money you’re making, you have to understand how much making that money is costing you.
The Truth About “Free” Traffic
Yes there is a cost. And if you don’t think about the “spend” half of the equation, you’re literally shooting yourself in the foot.
Especially if you’re trying to use content marketing to generate “free” traffic.
Now I’m a big fan of blogs and other content marketing. (I try to give you as much value as I can every time you stop by here!) Just NOT for getting traffic. There are three main reasons why trying to generate free traffic with content doesn’t work.
First, there’s a huge hidden cost… Namely your time. The more time you spend trying to create killer content that delivers value, the less time you have to do other important things you should be doing. And believe me, your content needs to be great because…
Second, competition is fierce… Today getting your content noticed on the web is much easier said than done. You have to deal with Google who protects its traffic like a mama bear protects her cubs. If your content has even a whiff of being garbage, you’ll be banned. And even if you can jump through all these hoops, there’s still the…
Third, and the most important factor of all… Traffic has to be scalable. You have to be able to ramp it up at will. And you simply can’t do that when you’re playing for “free” traffic.
Sure, there are exceptions to these rules, but they are few and far between. For the most part, spinning your wheels trying to save a few bucks will cost you a LOT more in the long run.
The $64,000 Question
The truth is you have to spend money to make money. And these days that doesn’t have to be a huge amount. Even a hundred dollars a week can show you how effective your conversion machine is.
So here’s the key question… how much? How much could you spend on a “click” to get a customer?
Below is a little worksheet that will lay out the basic math that will tell you…
Let’s say you sell a product for $29.
When you get a buyer, like a good strategic entrepreneur, you offer them an upsell. And you price the upsell at $97.
You run a campaign and get 200 clicks to your site.
Out of that campaign, you get 5 sales and 2 upsells. (That’s actually a huge conversion rate for cold traffic. But we’ll use those numbers for the sake of simplicity.)
Here’s what you do.
|Take your number of sales||→||5|
|Multiply by the initial sale value||→||$29|
|This is your “initial revenue”||→||$145|
|Take the number of upsells||→||2|
|Multiply by the upsell value||→||$97|
|This is your “upsell revenue”||→||$194|
|Take your initial revenue||→||$145|
|Add it to your upsell revenue||→||$194|
|You get your total revenue||→||$339|
|Take your total revenue||→||$339|
|Divide it by your total clicks||→||200|
|And you get your average visitor (click) value||→||$1.69 cents|
This is the most you can pay for a click and still break even.
What Happens Next?
Once you have this data in hand, you’ll know the bottom line of what you can spend for media on Google Adwords or Facebook or YouTube or whatever channel you’re considering.
Then the name of the game becomes optimizing your campaign.
And that means starting to focus on how every segment of your marketing funnel is performing at any given time. Including every channel of traffic, every ad as well as each page and step in your funnel.
When you do this, you transform your marketing into an objective, scientific game with clear answers, directions and steps to take.
Now to cover all that, would require a good deal more here.
But I’ve got a special free gift for you that will shine a floodlight on all those details.
My good friend Todd Brown – founder of MarketingFunnelAutomation.com – has just published a brand new report on key funnel metrics.
And ultimately that makes your sales scalable – which is the name of the game.
If you don’t know Todd, I consider him one of the top authorities on creating insanely profitable marketing funnels. He’s responsible for creating funnels for some of the biggest, most successful direct response marketers online today. His clients fly in to pay him $10,000 for a single day of consultation. That’s because he routinely delivers results that double, triple and even quadruple their ROI.
In this report he boils down that sea of metric confusion to the few key numbers you need to focus on to quickly create a viable, profitable and scalable funnel!
And right now, he’s giving it away. You don’t even need to opt in.
So if you struggle with any confusion in the world of metrics (and pretty much everyone does) just head to this page and download his free report.