At this time we want to take Your ENTIRE Business Plan, from creating the number of Visitors, through the paying of the Taxes, and identify at each point, any Tips or Techniques that will help you to MAXIMIZE THE GENERATED PROFITS.
To do this, we need to list the Major Components in Your Business, and then add to each category so you can see what you can do to effectuate a Positive Outcome in each area.
THERE ARE 10 VARIABLES:
VISITORS-Set at 100 for Cold Marketing & 300 for Affiliate Marketing
PROSPECTS -Set at 90% of Visitors
SALES – Set at 1/45 Prospects
PROFIT – Set at $98 Per Sale
ADVERTISING EXPENSE – Set at 10% of the Target Gross Profit
AFFILIATE COMMISSION – Set at 30% of the Overall Gross Profit
OVERHEAD EXPENSE-Set at 10% of the Target Gross Profit
FRONT UPSELL – Set at 10% of the Target Gross Profit
BACK-END SALES – Set at 25% of Target Gross Profit
ESTIMATED TAXES – Set at 25% of the Gross Profit
As you will recall, there are 3 major components of Your Marketing Effort:
- Referral or Affiliate
In the area of COLD Marketing, we started with 5 techniques:
- Pay-Per-Click Search Engines
- Utilize Existing Targeted Lists
- Utilize Services that Guarantee Traffic
- Free Classified Ads
- Search Engine Ranking
There are a number of Additional Marketing Techniques that are used on the Internet to drive Traffic to Your Site. Rather than being overwhelmed with a list of all of them, I chose the best 5 to start with because they are easy to understand, execute, and have Success with.
Here are some Additional Marketing Techniques for you to consider adding to your arsenal after you have established a track record and have gathered some Consistent Statistics utilizing only what is in the Marketing Plan as it now exists. If you add additional Marketing Techniques before you develop a Base Line of Statistics for Your Business, it will be more difficult to track each Technique and determine what Adjustments need to be made to Improve the results.
With this having been said, here is a list and a brief description of some Additional Marketing Techniques:
- BANNER ADVERTISING – I trust that you have seen the Banner ads at the top of the page when you are browsing the Net. This type of ad has a low rate of return, but in large quantity, it can still produce some traffic. They normally charge a nominal fee per 1000 impressions. The numbers sound better than the results, but you may want to add this down the road.
However, a word of caution. There are companies that offer “free” banners. It works like this: They will put your banner on Top of their page, and in return, you put their banner on the Top of Your Page. DO NOT DO THIS!
What you DO NOT WANT TO HAPPEN is to work to get Traffic to Your Site, and have some of those Prospects immediately click on the Banner, and just like that, you lost your Potential Prospect to Another Site!
If you ever participate is a Reciprocal Link or Banner program, place the banner AFTER YOUR OFFER on Your Site, NOT BEFORE IT! The template that was proposed has a Shopping Cart and Affiliate Link Site as the SECOND PART, or Back-end of the Site. This is an EXCELLENT LOCATION to advertise Reciprocal Links. Whether you utilize the Template or not, make sure that you have a way to promote other Sites WITHOUT HURTING YOUR OWN SITE!
- AD OR ARTICLE SWAPPING – Another Ezine Editor will most probably be glad to swap an Article or an Ad with you so long as you both have approximately the same number of Subscribers. Once you have developed Your Opt-In list to a significant number, say 5000, then you can look to swap with others.
REMEMBER, THE OPT-IN LIST IS ULTIMATELY YOUR NUMBER ONE ASSET, BECAUSE YOU CAN CONTINUE TO SELL THESE SAME FOLKS AGAIN AND AGAIN AND AGAIN!
- DISCUSSION GROUPS – There are a ton of Discussion Groups these days, on virtually every topic you can think of. You can always join one of these groups and offer your Expert Opinion and a suggestion of where to go to find out more information, which of course would be Your Business. This is a time-consuming but Free method of developing traffic.
One other thing that you can do is to create Your OWN Discussion Group on a particular evening for an hour, and invite Your Opt-In list to participate. This gives you more contact with your group. There are companies on the Net that set up and monitor discussion groups. As always, whenever you are searching for something of this nature on the Net, go to Google and enter the keyword of choice: In this case, “discussion groups.”
- CHAT ROOMS – Like Discussion Groups, this is also a time consuming but Free method to develop Traffic. You are once again not allowed to advertise in Chat Rooms, but you can always give your opinion.
- MESSAGE BOARDS – This is another way to develop conversation about Your Business. Like Discussion Groups and Chat Rooms, Your Market is limited to a small but Targeted group. The one advantage is that all three of these methods are free, so if you have the time in the evening to “talk up” Your Site, it certainly can’t hurt.
These 5 additional Marketing Methods can be effective, but I suggest that you start with the 5 that are detailed in Your Marketing Plan, develop a base set of Statistics for Your Business, and then add One Additional Technique at a time, if you choose to do so.
PREPARE FOR HIGH RANKING WITH SEARCH ENGINES:
Without getting Overly technical, You can HELP your ranking with the Search Engines by following some suggestions. Here are some of the things that you can do:
TITLE PAGE: Each Page should have its own Descriptive Title. Once you are aware of the best Keywords for you to use to promote Your Site, by using SITE PROMOTER or WORDTRACKER, make sure you use the Keywords generously in Your Description of the Title of the Page.
META TAGS: The Meta Tag is the Description of the Page. These Keywords help the Search Engine to determine how to catalogue Your Web Site. Once again, as in the TITLE Description, your use of Keywords is CRITICAL to the Ranking in that Engine in the Category that you want to be found in.
PICTURE DESCRIPTION: Some Visitors to Your Site will have their “images” turned off so they don’t see a picture. Describe the Picture including as many Keywords as is feasible, while maintaining sentence structure, since the Visitor will see the description.
REDIRECT PAGE: This is a technique where you submit a Keyword-Rich Domain Name to the Search Engine to get a High Ranking, and then you redirect that page to Your Site. The Visitor will be unaware of the redirect, but this method can help with Your Ranking.
KEYWORD RICHNESS: This is a CRITICAL ISSUE with regard to Top Ranking. SITE PROMOTER, which is one of the 10 required TOOLS from the TOOLS Section, chooses Your Keywords taking the logic of the Search Engines into Account. This helps you to achieve a Higher Ranking. Then WEB-POSITION GOLD, another of the 10 TOOLS, monitors the position of the ranking based on the Keywords.
For more assistance with Keywords, there is a program called WORDTRACKER. This program will read Your Site and print a list of Keywords including Capitalized Keywords, incorrectly spelled Keywords, and combinations that you may not have thought of. There is a downloadable version of WORDTRACKER that is free, though the paid version is a LOT more powerful.
You don’t want to be Penny wise and Dollar foolish. The difference between Top Ranking and Mediocre Ranking is literally the same as the difference between night and day. If you aren’t in the Top 20, nobody will see you and you will wind up with little or no Search Engine Traffic. Search Engine Traffic from the FREE Engines is FREE to you.
So you want to do EVERYTHING YOU CAN DO to get yourself the BEST POSSIBLE RANKING!
REFERRAL OR AFFILIATE MARKETING:
In the area of REFERRAL or AFFILIATE Marketing, as you can see now that we have finalized the Business Plan, you should expect More Traffic and Sales from Your Affiliates than from Your Cold Marketing campaign. This makes sense, since you are ONE PERSON promoting Your Offer, whereas you may have 100, or 1,000, or 10,000 Affiliates promoting Your Offer as well.
This is why I suggest that you keep your COLD Marketing Campaign to the 5 main types to start with, and spend the rest of your time FINDING AFFILIATES.
Axiom Number Seventy-Five – The BIGGER YOU BUILD YOUR AFFILIATE BASE, THE MORE SALES YOU WILL HAVE.
Rather than spending time in a Chat Room, I’d MUCH RATHER you spend your time utilizing LINK POPULARITY, SUPERSONIC or SPYDER to build a list of Potential Affiliates to contact through the use of MAILLOOP.
Can you see the potential difference to Your Bottom Line by expanding Your Affiliate Base?
There are two elements that will add to Your Repeat Marketing that we need to discuss here.
- VIRAL MARKETING – In Your Newsletter or Ezine, a FREE E-Book or Report, or anything that you send out to either Customers or Prospects, always include at least one link back to Your Site. As the recipient of Your item forwards it to a friend for example, now that person can sign up for Your Newsletter or click on the link to check out Your Site or Promotion.
- SPECIAL PROMOTIONS, DISCOUNTS, AND OFFERS – The program CONTRIBUTE allows you to create “SPECIAL SUB-PAGES.” This means that instead of a Prospect going directly to the First Page of Your Site, you can give Your Subscribers a “SPECIAL OFFER” whenever you want to create Sales because of the URGENCY INVOLVED. This is a GREAT WAY to Make SPECIAL OFFERS to Your OPT-IN LIST!
“John, since you are one of my Special Customers, I’d like to make you aware of a PRIVATE, SPECIAL PROMOTION. This offer is only good for 72 hours. Right now, you can purchase the WIDGET X-200, which is sold on my Site WIDGETS-ARE-US.com for $99, FOR ONLY $49 as my way of saying “Thank you” for being a Loyal Customer. However, you CANNOT GO directly to My Site because there, its FULL PRICE.
“Click Here Now” to go to “SPECIAL PAGE” for this SPECIAL OFFER, just for you. Enjoy Your Widget 200!” Click Here Now!
The page that they will link to will look something like this:
This is a sub-page of Your Site, only accessible by those who have been informed that it is there. In 3 days, you would just go in and remove the link, until the next time that you want to run that promotion.
The Prospect-To-Visitor Ratio is dependent on two factors: the Targeting of Your Market, and the Impression of Your Site.
The Statistics that you will receive from Your Host will speak VOLUMES about Your Traffic. If a LARGE PERCENTAGE, say over 10% of the Visitors, spends LESS than 1 minute on Your Site, you can interpret this group as being a VISITORS, but not PROSPECTS.
With regard to properly Targeting Your Market, if you send out blind or misleading ads, or you advertise in places where the folks that see your ad are not interested in Your Offer, you will get curiosity seekers. These folks are NOT Interested or Qualified Visitors, so Your Prospect-To-Visitor Ratio will be low. At the beginning of Your Marketing Campaign, you will want to concentrate on Targeting Your Best Markets in terms of Interest.
Over time, however, once you have established your Baseline Statistics, you may then want to slowly broaden the Market to which you Advertise, then watch the results Closely.
If the percentage of Prospect-To-Visitors goes DOWN, but the overall number of Visitors goes UP by enough to have a POSITIVE IMPACT, then this is a Positive Adjustment.
For example, let’s say that when you Target Your Best Markets, you have a Prospect-To-Visitor Ratio of 95%. This tells you that you are in the Right Market, and Your Site is working well.
Now, let’s say as you broaden the Market, Your Prospect-To-Visitor Ratio goes down from 95% to 80%, but the number of Visitors DOUBLES, from 100 to 200!
In the Best Market ONLY, you had 95 Prospects out of 100 Visitors. When you broaden the Market, you had 160 Prospects out of 200 Visitors. You would take 160 Prospects OVER 95 Prospects ANY DAY IN THE WEEK, wouldn’t you??!!
By carefully tracking Your Initial Results, you will be able to gauge the effectiveness of any changes that you make. By tracking BOTH Your Sale-To-VISITOR Ratio AND Your Sale-To-PROSPECT Ratio, you will be able to see the spread more clearly as you broaden your Marketing base.
In so far as Your Site is concerned, you will want Your Site to turn EVERY Visitor into a Prospect. If the Visitor is unimpressed with Your Site, and exits, not only will you have a low Prospect-To-Visitor Ratio, but you will also have a low Sale-To-Prospect Ratio.
Once you have established a Base Line for Your Prospect-To-Visitor Ratio, and Your Sale-To-Prospect Ratio, Then you have a foundation upon which to make and test your adjustments.
We are starting out with the premise that Your Sale-To-Prospect Ratio is 1/45. In fact, the Ratio that you start out with will depend on many factors as we discussed earlier: Your Headline, Your Sub-Headline, Your Information line, the Presentation of Your Site, Your First Paragraph, etc.
Whatever Ratio you start out at, you should Definitely Improve it over time. Sometimes just the changing of any one of the 10 Variables mentioned above can have a DRAMATIC effect on your Sales Ratio.
It doesn’t matter HOW MANY Visitors you drive to Your Site if Your Site doesn’t ever CLOSE THE SALE.!! If you are having trouble with the performance of Your Site, you might want to consider having someone such as me review Your Copy for you. For the money that you will spend to have a Professional Write or Critique Your Sales Copy, Review Your Ads and Autoresponders, and Adjust the Mechanics of the Sales process, you may end up with a SUBSTANTIAL INCREASE in the Sale-To-Prospect Ratio.
Often, this is not only the difference between generating Your Desired Profit as opposed to a WEAK Profit, but a STRONG SALES SITE will develop Affiliates, and a Weak Sales Site will LOSE Affiliates.
The Sales-To-Prospect Ratio is a CRITICAL ELEMENT for BOTH YOUR PROFIT and THE FUTURE OF YOUR BUSINESS as well.
In our Business Plan, we have an anticipated Profit Margin of $98 per Sale. If you DOUBLE this amount, you only have to make HALF as many Sales to generate the same amount of Profit.
Conversely, if you HALF this amount, you have to DOUBLE your Sales in order to generate the same amount of Profit.
A CRITICAL ELEMENT that we touched on before is MERCHANDISING. Here’s an example of how Merchandising can be the difference between Success and Failure in Business.
There was a Business that sold Toupees. No matter how they Advertised, the Cost Per Sale for the Advertisement was Too High to make a Net Profit after All Expenses. Because of Competition, there was a limit as to how much the Business could charge.
One day the owner came up with a brainstorm. “From today forward,” he said, “Nobody can buy a toupee from us any more. They have to buy a set of two.”
He then launched a campaign Selling the Benefits of having 2 Toupees: How if one is damaged, needs to be cleaned, for that special occasion, etc. etc. you’ll always look and feel your best.
The result? The Advertising Cost, known as the Lead Cost, per Sale was cut in half, Business actually picked up because the “Set of 2” really caught on, and the Business went on to be Very Successful.
So, when you are determining what to Sell, keep in mind that if it is an Item with a $98 or more Profit per Sale, you have to hit the numbers as outlined in the Business Plan. But if you are considering selling an item that is less than $98 in Profit, consider using some MERCHANDISING TECHNIQUES to create a SET, A GROUPING, A COMBINATION, etc. that will give you a $98 or greater Profit per Sale.
On the other hand, depending on the item and the competition, perhaps it is an Offer that with a Lower Price will sell Sizably More Units. This involves knowledge of Your Business and Testing. But you should at least understand how the Concept of MERCHANDISING could be helpful to you.
As we discussed, there are MANY, Pay-Per-Click engines, MANY Lists available for purchase, and MANY services that guarantee to bring Traffic to Your Site.
When you develop your Advertising Budget, as we did in the Business Plan, make SURE to ALWAYS spend the money on Advertising. Remember, as the saying goes: “Running a Business without Advertising is like winking at a girl in the dark – YOU know what you’re doing, but NOBODY ELSE DOES.” As long as the Advertising is bringing you Sales and Building Your Opt-In list, and costing you 10%-20% of the Gross Profit, don’t stop Advertising because Business seems to be good. It is MUCH EASIER to MAINTAIN BUSINESS than it is to restart it if the fire goes out.
While on the subject of Advertising expense, I should add that we have 5 Cold Marketing Methods in the Marketing Plan, and 5 secondary Methods in this Chapter.
However, some of Your Market may not be on-line at ALL! There are numerous ways of Targeting Markets that are NOT on the Internet. Methods include:
- FAX ADVERTISING
- POST CARD ADVERTISING
- MAILER PIECES
If you go once again to Google and enter any of the above phrases as keywords, you will get a list of companies that Market off-line as well as on-line.
Remember, just because you are now in the World of the Internet doesn’t mean that there isn’t a HUGE WORLD around you that is NOT yet on the Internet. And just as there are folks ON the Internet that can use Your Offer, there are also folks that are NOT on the Internet that can also use Your Offer.
AFFILIATE COMMISSION EXPENSE:
Once more, let’s go over the Two-Tier concept and the Commission Structure.
A Two-Tier program means that you pay 30% to Your Affiliate, who is on the FIRST Tier, and Then Your Affiliate gets to promote Your Affiliate Opportunity to Another Affiliate, who is the SECOND Tier.
The First-Tier Affiliate gets 30% on Sales that they generate. They also get 10% on All Sales generated by the Affiliate that they brought in on the Second Tier. The Second Tier Affiliate gets 30% for bringing Traffic to you that resulted in a Sale. The addition of the 30% Plus the 10% when the two Tiers are involved, equals a 40% Total Commission.
Since Affiliate Commission is only paid on AFFILIATE GENERATED SALES, the 40% Commission is only paid on a PORTION of overall Sales.
If the mixture is 3 Affiliate Sales for every 1 Cold Sale, and the Commission is 40% on those 3 Affiliate Sales, then the Commission is 30% overall, including the Cold Sale for which there is NO Commission.
In the event there isn’t a Second-Tier involved in these Sales, then Your Affiliate Commission is only 30% on the 3 Affiliate Sales, which works out to 22% when you add a Sale on which there is No Affiliate Commission paid.
OVERHEAD AND OPERATING EXPENSES:
There are certain expenses, such as Bank Charges, Hosting Fees, Affiliate Program Fees, and the Corporate Share of the payroll taxes, etc. that are carved in Stone. You can’t operate the Business without these. However, there are other expenses that you may be entitled to write off as a Company Expense, that may save you money on your taxes at the end of the Year.
While you need to hold Your Total Expenses to 50% of the Generated Profit, with instruction from your Accountant, you may be entitled to certain “additional” expenses such as Company Health Insurance for example.
Always keep the Advertising Expense, Affiliate Commissions, and Overhead Expenses to 50% or less of the Gross Profit. THEN if you are advised to charge some expenses to the Business that are NOT essential to the Operation of the Business, but advantageous from a tax perspective, keep track of these Expenses SEPARATELY in QUICKBOOKS. This will insure that you can track your ESSENTIAL EXPENSES to keep them UNDER 50% of the generated GROSS PROFIT.
Let’s have a word about Total Expenses. There is an old saying in Business:
Axiom Seventy-Six – BUSINESSES NEVER GO OUT OF BUSINESS ON WHAT COMES IN, BUT RATHER, ON WHAT GOES OUT.
Remember, you are indeed only as strong as Your Weakest Link. If you are Strong in Marketing, Sales, Controlling Your Expenses, Testing, and Operating Your Business Plan SOUNDLY, THEN YOU WILL SEE THE SUCCESS AND GENERATE THE PROFITS THAT YOU DESIRE!
But if you are concentrating on Marketing and Sales, and you are NOT WATCHING your Expenses, OR, if you are watching your Expenses and NOT WATCHING Marketing and Sales, whatever it is that you are NOT WATCHING will be what ends up fouling up Your Business Plan.
If you are Selling a Unique Product, and you can offer a Complimentary Unique Product of your own as the Front-End Upsell, that is ABSOLUTELY THE BEST CHOICE.
If you are Selling a Product that is part of a Product Line and you offer a Complimentary Product in that Line as the Upsell, that is ALSO an Excellent Choice.
But there are TWO things that you do NOT want to do: Do not offer a Product that is unrelated to Your Offer, and do not offer a Product that is very cheap or very expensive in comparison with Your Offer. In general, try to find an offer that costs about 25% of your Initial Offer, and definitely do not go over 50% of the cost of Your Initial Order.
By offering Affiliate Products and Services on the Back-End, you can dramatically Increase Your Site’s Profitability. However, beware of the following:
When you offer an Affiliate Link, you are sending the Prospect or Customer AWAY from Your Site. If the offer you are sending them to is in DIRECT COMPETITION with Your Offer, that’s NOT a good Affiliate Link for you!
There are many products that you can purchase the Resell Rights to. The reason why these products are available is because of all the links in them to offers that make the Author money. Make sure you look CLOSELY at the Products that you carry.
Sometimes, MASTER RIGHTS are available. This gives YOU the right to change the links to Your Link. This is a much safer avenue than having Resell Rights, but the Master Rights are sometimes fairly expensive.
Interestingly, the same applies with Copy for Your Ezine. There are Sites on the Net that are there for the swapping of articles between Ezine Editors. Be careful when doing this because just as Your Link will appear at the bottom of Your Article, the other Ezine Editor’s Link will appear at the bottom of HIS Article. You may not want to promote his Link if he is in Direct Competition with you, because you do not want to direct Traffic AWAY from Your Site.
Last but certainly not least are the Taxes that you will owe on the Profit that you have generated.
In the U.S.A., there’s Social Security Tax, Unemployment Tax, and Income Tax on a Federal Level, and then there are almost always some kind of State and Local Taxes.
Make sure you check with your local authorities so you are aware of all of the Expenses BEFORE you go into Business, so you don’t Overspend, and find yourself playing catch-up. The whole idea of going into Business for Yourself is to be:
- In charge of Your Own Schedule,
- To Operate Your Business with a laptop and an Internet Connection from ANY location, and
- To be able to make MORE MONEY than you can make in a job where you are building someone else’s dream.
Don’t let Your Dream turn into a Nightmare because you aren’t prepared to pay your Taxes when they come due.
As a part of Your Retirement Plan, you may choose to Sell Your Business at some point. For Business Evaluation, or to Sell Your Business, there are many, many choices. When you are ready, just go to Google and enter the Keyword phrase “Web-Based Business Evaluation” or “Sell my Web-Based Business.”
Whether you are planning on Selling Your Business or not, it is wise to keep track of its worth on an Annual Basis. What if you didn’t know until you were 60 years old that you could have Sold it when you were 50 for $5,000,000?
Successful Businesses often Sell for more than you’d think One Business that I owned generated approximately a $1,000,000 Gross Annual Income. I had an Offer of $7,500,000 for that One Business from a larger company because in that particular field, the multiple to determine the Sales Price was 7.5 times earnings.
Some Businesses are 2 times earnings, while others are 20 times earnings. WELL IN ADVANCE OF SALE, you should be aware of the Valuation of Your Business so you KNOW what it’s worth and you can make decisions as to what to do with Your Business based on FACT!
HOWEVER, NEVER FORGET THIS ONE FACT:
Axiom Number Seventy-Seven: ONCE YOU KNOW HOW TO BE SUCCESSFUL IN BUSINESS, THERE IS NO LIMIT TO YOUR ABILITIES OR TO YOUR INCOME!
Once you have ONE Web Based Business up and running, you now KNOW EXACTLY HOW TO DO IT! This means that you can start another Web-Based Business at ANY TIME, following the formula that made you Successful.
Let’s say you have 3 Web-Based Businesses, and two are each generating a $100,000 ANNUAL NET PROFIT, while the STRONGEST of the Three is Generating a $250,000 Profit. And let’s say you KNOW that you can get a multiple of 6 for the Business that is generating the $250,000 Profit.
Your choice is to continue to run that Business, Collect Your $250,000 per Year, build it up, and try to Sell it for more down the road. Or, you can take 6 times $250,000 = $1,500,000 for it NOW. Depending on Tax planning and other issues, you may not want to Sell it, but at least you have the option!
Selling the $250,0000 Business would leave you with 2 Businesses generating $100,000 each, and $1,000,000 CASH IN YOUR BANK assuming an All-Cash deal with $500,000 for Taxes. You’d also now have the Money and the Knowledge to start up however many more Web-Based Businesses that you want, to replace the $250,000 Income if that’s your plan.
The POINT of this exercise is to KNOW how much Your Business is Worth, and to proceed with the CONFIDENCE that you now have the KNOWLEDGE to DUPLICATE Your Success over, and over, and over again!