Are you an internet millionaire ?
Macquaire IT specialises in conceptualising, designing, developing, launching, partnering, managing and leading internet businesses for long-term success. We have successfully developed and managed many online businesses predomintly in the ecommerce arena and from our experience, the success of an online business narrows down to 3 important factors; USER FRIENDLY WEBSITE, TRAFFIC and RETURN ON INVESTMENT on marketing campaigns.
Creating a business concept and designing and developing a world class website is the easy part. Bringing quality traffic and then converting them into a longterm client is where the challenge lies and this is where Macquaire IT has positioned itself as experts.
Even two-year-olds know how knock-knock jokes work. You start with the same line. You always get a response. You respond with a structured, predictable response. And then there’s a punch line. Creating a knock-knock joke is very straightforward. First, you announce the joke. The jokee then chooses to ignore you or to engage. The exchange that follows is simple. And sometimes the jokee gets the joke and smiles. Online Marketing is exactly the same.
Cutting through the fat !!
Lets assume you have an online business and you are ready to launch. The first thing that you will think about is buying traffic. Let’s get into a little detail about the smart way to do that. Everyone’s heard of Google, but a surprisingly small number of people understand how Google makes billions of dollars a year. They do it with those little boxes that show up next to the search results. Google calls this their AdWords program. Other sites offer similar programs, but since AdWords is the biggest, we’ll use it as an example. The deal is pretty elegant:
• Pick a word or a phrase that describes your product. (You can even select words that you don’t want used as keywords.)
• Write a short headline followed by a sentence that makes a promise.
• Figure out how much you’re willing to pay to get one person to click on that ad one time (and visit whatever page you’d like them to visit).
• Figure out how many people you want at that price.
There’s an art to writing an effective AdWords ad, but that isn’t nearly as important as the math behind it. Okay, it’s easier than math. It’s arithmetic. Let’s say you tell Google you’re willing to pay $1 per click. Of the people who get to the page you send them to, figure that 20% read what you have to say and decide to click on to the next step in the process. And 20% against $1 equals $5. (If that bit didn’t make sense, make a picture and you’ll see what I’m getting at. If one out of five people get to the second page, you had to buy five clicks to get one live one, which means that she cost you $5.) You just spent $5 to get someone to that next step.
In the next step, you ask for some information, maybe even a credit-card number. Only 5% of the people who are confronted with this step actually go ahead and do what you need them to, so now your cost is 5% against $5, which equals (gasp) $100. You ended up paying $100 for each desired outcome. $100 per sale. The good news is that some of those people will tell their friends (and you get additional customers for no additional costs, because that traffic is free).
Say that the average word-of- mouth value is 2 (each customer brings two friends, which means that when you buy a new customer, you’re really buying three). Your cost per outcome is now $33.33. (The secret to success online and offline in today’s economy is to make things worth talking about. Its when people talk the value of your business automatically increases).
So, our arithmetic makes it clear what your online marketing and Web strategy is accomplishing—new customers for about $33 each.
What if you could make that first page more efficient?(This is where Macquarie IT adds value)
What if, instead of passing through 20% of the people who saw it, that first page got 50%? And what if, instead of converting 5% of the people who saw the second step, you got 10%? And finally, what if your tell-a-friend tools got people to convert three friends instead of two?
Now the arithmetic looks like this:
50% times $1 equals $2
10% times $2 equals $20
A word-of-mouth value of 3 means you get four customers for the price of one, which means a total cost of $5 each. Wow !! You’ve just turned a project that lost money (at $33 a customer, you’re losing—I’m making this up—$3 a sale) into one that mints money (at $5 a customer, you’re making $25 in profit).
If you’re losing $3 on each new customer, then marketing is an expense and you won’t grow. If you’re making $25 on each new customer, you have an infinite amount of money to spend “buying” customers at that price—and marketing is now an investment. Congratulations, you’re a hero and you have a bring future at running an online business.
Once you’ve got the process part of the steps down, you can start sharpening your pencil when it comes to acquisition. You can buy pay-per-click ads on sites like Yahoo! You can use the various ad networks to run your ads on other sites. You can buy ads on blogs or even on the sides of buses. As long as you can measure the cost per click, and as long as the clicks cost less than they deliver in profit, you win.
All website businesses are not the same, but the fundamentals always remain the same and similar strategies can be applied to any online business. Contact Us today to discuss your winning strategy and increase your speed of implementation towards the highway to success. |