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Sunday 2 February 2014

How 6th Grade Maths = Predictable Profit Online

How 6th Grade Maths = Predictable Profit Online


There is a generally accepted rule of thumb in the internet marketing game.


You can generally make around $1 - Per subscriber on your list - Per month…


So around $12 per year per person.


This in itself should inform most people of the importance growing your list.


But what else can we get from this?


Firstly, assuming that you are creating good, interesting & engaging content…
that you could probably afford to spend at least a few dollars getting each subscriber.


If it costs you $4 to land a subscriber - you know you are still ahead.
If it costs you $8 to get each subscriber - you are not making as much in the first year but… still ahead!


Even at $12 - at least you know that in your second year you are going to be in profit.


Now that might seem like a long time to wait to make money but think about this:
Most high st businesses take at least 3 years before they make any profit at all.


Ok… Ok, I know I’m not painting the most glamorous picture here.
This is not the “start your online business and be making a fortune by the end of the week” hype that you normally hear, but I’m telling you this for a reason.


When you hear all that hype - when they paint a picture of there being some “secret” which if you could only discover would allow you to ...blah blah blah…


The problem with that is that it doesn’t provide you with a plan you can use. If it all comes down to one “secret” then you either have it or you don’t…


And in most cases even if you have it - it’s only part of the picture.


The great thing about understanding the average customer value is that, with some simple maths you can work out what you can afford to pay for a customer.


You can, in a way, buy customers…


It’s a simple measurable way to see how you can grow your business.


It’s a plan you can implement, count on and grow a business with…


and look… no secrets!


The question is this.


If you know you can make $12 per subscriber…
and let’s say you could “buy” customers for say $5…
Q: How many do you want?


A: As many as you can afford, right?


In fact at that price wouldn’t you be throwing every spare cent you have at getting subscribers?


Now here’s the great thing about this whole plan…


You can generally get subscribers for way less than $5 each (depending on where you look)
and, if you write good content, make good offers and build a good relationship with your subscribers you can often make much more than $1 per person, per month.


Let me give you a good example…


We recently created a landing page (a lead capture page) that converted around 30% - That’s 30 subscribers for every 100 odd people that went there…


and we used a major ezine directory to find people who would send out a “solo ad” to their list.
A solo ad is a single email that goes on to a persons list advertising or telling them about your special (often free) offer.


They charged us $0.30 a click…
That’s $30 for 100 clicks to our page…
That’s 30 new subscribers @ $1 each…


Simple maths right?


All other things being equal, you can then calculate that $30 = 30 subscribers
and 30 subscribers = $360 a year


Now subtract your costs ($30) and you are $330 in profit for the year…
That’s an ROI of 9X


Show me a business, any business that can produce a 9x ROI in the first year


When you know your “figures” you can build your business predictably.


Imaging what you would be doing if you ran an ad like that every single day…


Adding 30 people a day to your list…
What about 100 people?


You see where I’m going with this?...


Using the ezine directory is just one source of traffic and there are many more things that you can do to get people to your page...but it’s a great place to start because you can order targeted buyers who you know are interested in what you are offering.


Finally 6th grade maths is paying off (*Grin*)



Mike G

http://InternetPhenomenon.com

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